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EMBARGOED UNTIL MAY 9, 2013 AT 8:30AM ET

  MMA  Mobile  Marketing   Economic  Impact  Study  
       

Peter  A.  Johnson,  PhD     and   Joseph  Plummer,  PhD          
 

 

   

MMA  Mobile  Marketing     Economic  Impact  Study  
           

 
 

Peter  A.  Johnson  and  Joseph  Plummer  
With  the  assistance  of  Marina  Bregman,  Barbara  Clark  and  Douglas  Clark  
       

In  Partnership  with  IHS  /  Global  Insight    
                            This  publication  has  been  prepared  for  general  guidance  on  matters  of  interest  only  and  does  not  constitute  professional   advice.  You  should  not  act  upon  the  information  contained  in  this  publication  without  obtaining  specific  professional  advice.  No   representation  or  warranty,  whether  express  or  implied,  is  given  as  to  the  accuracy  or  completeness  of  the  information   contained  in  this  publication,  and,  to  the  extent  permitted  by  law,  the  authors  do  not  accept  or  assume  any  liability,   responsibility  or  duty  of  care  for  any  consequences  of  you  or  anyone  else  acting,  or  refraining  to  act,  in  reliance  on  the   information  contained  in  this  publication  or  for  any  decision  based  on  it.      
 

  ©  Copyright  MMA/mLightenment/IHS  Global  Insight,  2013.  All  rights  reserved.  No  part  of  this  publication  may  be  reproduced   or  transmitted  in  any  form  or  by  any  means,  electronic  or  mechanical,  including  photocopy,  recording  or  any  information   storage  and  retrieval  system,  without  prior  permission  in  writing  from  the  copyright  holders.  

 

 

About  the  Authors  
Peter  A.  Johnson,  PhD  
Principal,  mLightenment   Adjunct  Professor,  Columbia  University     Peter  A.  Johnson  founded  mLightenment  in  2012  as  a  virtual  consultancy  of  leading  academics  currently   or  formerly  affiliated  with  Columbia  University  in  New  York  City,  where  he  has  taught  full  and  part  time   since  1992.       During  his  professional  career,  Peter’s  research  on  the  impact  of  metrics  and  data  on  public  policy,   finance,  and  the  economy  has  brought  him  national  and  international  scholarly  recognition.  His  major   work,  The  Government  of  Money,  demonstrated  the  key  role  played  by  metrics  in  establishing  public   trust  in  monetary  policy’s  ability  to  secure  stable  prices,  and  found  its  way  onto  graduate  economics  and   business  school  syllabi  at  over  30  major  universities  around  the  world.       As  a  subject  matter  expert,  Peter  conducted  a  multi-­‐year  study  for  the  German  Chamber  of  Commerce   on  the  economic  redevelopment  and  investment  opportunities  in  the  former  East  German  economy.  His   work  on  the  digital  economy  led  to  invitations  to  present  his  economic  research  to  the  US  Congress,   state-­‐level  and  international  legislatures  and  regulatory  agencies,  and  to  co-­‐author  a  brief  to  the  US   Supreme  Court  on  consumer  data  issues.  His  work  has  also  been  cited  in  official  publications  of  the  US   Federal  Reserve  and  the  German  Bundesbank.  In  addition,  his  work  on  marketing  data  and  metrics  led   to  invitations  to  serve  on  the  Board  of  Directors  of  the  US  Marketing  Accountability  Standards  Board  and   later  to  join  the  Board  of  Directors  of  the  US  Media  Ratings  Council.       In  these  roles,  he  has  developed  extensive  research  into  mobile  marketing,  social,  and  other  direct  and   interactive  media  and  e-­‐commerce.  These  interests  have  led  him  to  take  private  sector  research   positions,  including  vice  President  of  market  intelligence  and  strategy  for  the  Mobile  Marketing   Association  from  2008  to  2011,  and  vice  president  of  research  and  senior  economist  at  the  Direct   Marketing  Association  from  2004  to  2008.    
   

Joseph  Plummer  
Adjunct  Professor  of  Marketing   Columbia  University  School  of  Business     Dr.  Joseph  Plummer  is  adjunct  Professor  in  the  Columbia  Business  School  and  Senior  Associate  at  Olson   Zaltman  Associates.  He  is  co-­‐author  of  The  OnLine  Advertising  Playbook,  focusing  on  the  emergence  of   the  Internet  as  a  marketing  platform.  Prior  to  teaching  at  Columbia  Business  School,  Dr.  Plummer  was   EVP  at  McCann  Worldgroup,  Vice  Chairman  at  DMB  &  B,  EVP  at  Young  &  Rubicam,  and  SVP  at  Leo   Burnett.  He  was  also  a  managing  director  at  Paine  Webber/Y&R  Ventures,  and  chief  research  officer  at   the  Advertising  Research  Foundation.       Dr.  Plummer  is  a  board  member  of  Media  Advisory  Partners  LLC,  Zogby  International,  Voxpop  Investing,   AdSafe,  Innerscope  Research,  Inc.,  and  C3  Research.  Previously  he  served  on  the  board  of  directors  at  

Sunstus,  Audits  &  Surveys,  McCann  Worldgroup,  DMB  &  B,  and  Young  &  Rubicam.  He  was  a  member  of   the  board  of  trustees  at  his  alma  mater,  Westminster  College,  where  he  earned  his  BA,  and  on  the   President’s  Council  at  the  Ohio  State  University,  where  he  received  his  master’s  and  PhD  degrees.       In  addition  to  The  OnLine  Advertising  Playbook,  Dr.  Plummer  has  published  more  than  25  articles  in   journals,  written  over  20  chapters  for  books  and  been  the  editor  of  The  Journal  of  Advertising  Research.   He  was  selected  Distinguished  Marketing  Practitioner  by  the  Association  of  Marketing  Science  in  2007.   This  year  Dr.  Plummer  received  the  distinguished  Lifetime  Achievement  Award  from  the  Advertising   Research  Foundation.    

About  mLightenment    

mLightenment  is  a  virtual  consultancy  of  leading  academic  researchers,  many  of  whom  are  currently  or   formerly  affiliated  with  Columbia  University  in  New  York  City.    They  provide  clients  with  objective   assessments  of  the  expenditure,  sales  and  public  policy  impacts  of  emerging  media  and  communications   technologies  on  their  businesses,  and  communicate  these  findings  clearly,  effectively,  and   authoritatively  to  key  client  stakeholder  groups,  including  customers,  business  partners,  press,  and   policy-­‐makers.      

  About  IHS  Global  Insight    

IHS  Global  Insight  is  one  of  the  leading  economic  analysis  and  forecasting  firms  in  the  world,  with  an   established  track  record  for  providing  rigorous,  objective  data  and  forecast  analyses  to  governments   and  businesses  around  the  world.  Among  its  areas  of  expertise  are  the  economic  impact,  tax   implications,  and  job-­‐creation  dynamics  of  multiple  sectors  core  to  national,  state  and  local   economies.  It  also  helps  companies  and  governments  at  all  levels  interpret  the  impact  of  proposed   investments,  policies,  programs,  and  projects.  

Acknowledgments    
The  authors  would  like  to  thank  the  hundreds  of  marketers,  agencies,  supplier  firms,  public  policy   experts  and  academics  in  the  mobile  marketing  ecosystem  who  generously  answered  our  detailed   survey  questionnaires,  offered  their  experiences  and  insights  during  confidential  interviews,  and  replied   to  our  email  inquiries.    We  regret  we  cannot  thank  them  individually  by  name,  we  promised  them  all   confidentiality.         Special  mention  goes  to  our  partners  in  economic  impact  research  at  IHS  Global  Insight,  particularly   Mike  Raimondi  and  Scott  Fleming  and  their  associates  in  the  economic  consulting  group.         We  also  would  like  to  thank  current  and  former  staff  of  the  Mobile  Marketing  Association  for  their  very   helpful  administrative  assistance  with  fielding  our  surveys  and  in  helping  to  arrange  some  of  our   interviews.         Finally,  the  principal  author  gratefully  acknowledges  additional  research  assistance  provided  by   Elizabeth  Margid  and  Scott  Aronin.            

 

 

 

 

Table  of  Contents  
Executive  Summary  .....................................................................................................................  1   Understanding  Mobile  Marketing  .............................................................................................  13   Expenditure  on  Mobile  Marketing  Communications  and  Related  Services  ..............................  28   Mobile  Marketing’s  Sales  Impact  on  the  US  Economy    .............................................................  49   Mobile  Marketing’s  Employment  Impact  ..................................................................................  80   Consumer  Data  Best  Practices  and  Privacy  ...............................................................................  84   Social  Benefits  from  Mobile  Marketing  .....................................................................................  95   Conclusion:  From  Mobile-­‐Enhanced  Media  to  a  Mobile-­‐Enhanced  Economy  ........................  100   Methodology:  Measuring  and  Modeling  US  Mobile  Marketing  Communications  ..................  104   Appendix  I:  Summary  Tables  for  Expenditures,  Sales  and  Employment  Impact  by  Industry  ..  112   Appendix  II:  Definitions  of  Major  Industry  Groups   ..................................................................  117  

   
 

 

Executive  Summary    
The  Economic  Impact  of  Mobile  Marketing  In  the  United  States  
  The  pages  that  follow  report  the  results  of  a  six-­‐month  investigation  by  the  principal  authors   into  the  size  and  scope  of  the  impact  of  mobile  marketing  on  the  United  States  economy,   conducted  at  the  behest  of  the  Mobile  Marketing  Association.1         We  found  that  the  mobile  marketing  ecosystem…     • …exhibits  remarkable  levels  of  investment  for  an  industry  so  young:  $6.7  billion  spent  on   it  by  client-­‐side  marketers  and  retailers  across  all  industries  in  2012,  a  figure  likely  to   reach  almost  $20  billion  by  2015;     • …contributes  even  more  impressive  levels  of  incremental  output  to  the  U.S.  economy:   $139  billion  in  2012,  and  reaching  $400  billion  by  2015,  with  at  least  85%  of  this  sales   impact  taking  place  in  “off-­‐line”,  “brick  and  mortar”  locations;     • …currently  sustains  over  a  half  million  jobs  in  2012,  and  will  likely  support  upwards  of  a   million  and  a  half  workers  by  2015,  including  both  direct  and  indirect  employees;  in  fact,   every  single  employee  in  a  direct  mobile  marketing  communications  role  will  support   over  23  workers  in  non-­‐mobile  occupations  throughout  all  50  states  and  the  District  of   Columbia  in  that  year.       In  interpreting  these  facts,  the  reader  should  bear  in  mind  that  these  figures  of  increased   economic  output  and  employment  are  entirely  comprised  of  supplemental  U.S.  income  and   jobs  that  would  not  exist  but  for  the  successful  exchange  of  marketing  communications  through   mobile  media.         We  would  be  remiss  if  this  first  recital  of  mobile  marketing’s  quantitative  achievements   somehow  failed  to  pay  tribute  to  what  we  consider  its  no  less  impressive  qualitative   accomplishments.         Every  day  that  we  worked  on  this  project,  we  could  not  help  but  notice  how  the  very  industry   we  were  studying  so  intensively  was  so  busily  transforming  our  society  extensively.    We  would   wake  in  the  morning  to  hear  one  of  its  new  gadgets  lauded  as  the  object  of  fascination  on  a   radio  broadcast;  stepping  outside  our  door,  we  saw  the  object  of  our  study  in  constant  use  by   our  fellow  pedestrians  and  commuters  (heads  down,  hands  and  device  forward,  ear  buds  in);  its                                                                                                              
1

 The  Mobile  Marketing  Association  commissioned  this  study  in  the  summer  of  2012,  but  the  research  was   conducted  entirely  under  the  independent  direction  of  the  two  principal  authors  from  that  moment  forward.     1  

productivity  tools  indispensable  to  our  own  collaboration;  its  capacity  to  reinvent  itself   seemingly  every  few  months  dizzyingly  if  intoxicatingly  relentless.       But  whether  one  uses  hard  numbers  or  soft  impressions,  the  mobile  marketing  ecosystem   presented  us  with  a  picture  of  economic  vitality  that  in  our  experience  is  almost  certainly   unequalled  anywhere  else  in  the  nation.       It  is  that  picture  we  briefly  summarize  in  the  next  few  pages,  and  fill  out  in  the  sections  that   follow.         (Note:  additional  state-­‐level  information  and  information  about  individual  industries  can  be   found  in  the  spreadsheets  that  accompany  this  report.)   Study  Objectives     Our  main  goals  in  conducting  this  research  were  to:       • Provide  the  mobile  marketing  ecosystem  with  its  first  objective  and  comprehensive  picture   of  its  own  size  and  contribution  to  US  economic  performance;   • Provide  business  decision-­‐makers  with  data  that  can  help  them  gauge  overall  trends  in   mobile  marketing  communications  investment,  sales  impacts  and  employee  resourcing  in   their  industries;   Take  a  snapshot  of  the  industry’s  current  consumer  data  collection  and  privacy  policy   landscape  so  as  facilitate  forecasting  of  economic  impacts  and  provide  policy  makers  with  a   baseline  from  which  to  gauge  the  economic  consequences  of  potential  legislative  changes.    

Research  Design:  Expenditure,  Sales,  Employment     mLightenment’s  approach  measures  mobile  marketing’s  economic  impact  consistent  with   mobile’s  core  value  proposition  as  a  marketing  medium,  namely  its  ability  to  increase  sales  (and   by  extension,  employment)  for  client-­‐side  industries  that  invest  in  its  services.    This  required  us   to  quantify  three  key  metrics:     • Expenditure  by  industry  on  Mobile  Marketing  Communications  and  related  services   • Sales  Impacts  (incremental  net  top-­‐line  revenues)  to  industry  in  any  location  resulting  from   marketing  communications  accessed  by  end-­‐customers  via  their  mobile  devices.  2  

                                                                                                           
2

 “Any  location”  means  sales  impacts  could  take  place  either  “on-­‐line”,  as  mobile-­‐enabled  digital  purchases  (ie   mCommerce  )  or  in  the  offline,  brick  and  mortar  world,  such  as  in  a  convenience  store,  doctor’s  office,  or   automobile  dealership;  all  such  real-­‐world  venues  we  group  together  under  the  umbrella  term  “mShopping.”     2  

Employment  Impacts  comprising  both  advertiser  employment  (supported  directly  by   industry  expenditure  on  mobile  marketing  communications  or  related  services);  and  seller   employment  (supported  by  the  increased  sales  revenues  resulting  from  mobile  marketing   communications.)    

In  addition,  we  calculated  mobile’s  “marketing  impact  ratio”  (MIR),  which  is  an  industry’s  total   media  sales  impact  divided  by  its  total  media  expenditure.  This  metric  allows  us  to  compare  the   efficiency  of  marketing  in  a  given  media  on  a  per-­‐dollar  of  expenditure  basis  across  industries,   regardless  of  industry  size.    (See  below,  and  methodology  section  of  the  main  report.)     Expenditure  On  Mobile  Marketing  Already  Significant  &  Will  Grow  Strongly   In  2012,  mobile  marketing  communications  expenditure  in  the  US  we  estimate  to  be   approximately  $6.7  billion.    This  includes  spending  on  three  principal  marketing   communications  categories  of  interest:  mobile  advertising,  mobile  direct  response  /  enhanced   traditional  media  and  mobile  CRM.         Within  the  overall  mix  of  mobile  marketing  communications,  Mobile  Media  Advertising  will   remain  the  largest  single  component  of  spending  over  the  forecast  period,  reaching  $9.2  billion   by  2015.      But  expenditure  on  mobile  marketing  communications  is  not  limited  merely  to   advertising  in  on-­‐device  media.    Expenditure  on  mobile  direct  response  (DR)  advertising  or   mobile  enhancements  within  non-­‐mobile  media  is  projected  to  grow  the  fastest,  growing  over   four  fold  from  2012  to  2015,  to  almost  $3  billion;  and  mobile  CRM  will  continue  to  be  the   second  largest  source  of  expenditure  -­‐-­‐  indeed,  almost  as  significant  as  mobile  advertising  -­‐-­‐   through  2015,  when  it  is  expected  to  reach  $7.6  billion.         Combined  expenditure  on  mobile  marketing  communications  is  forecast  to  grow  at  a   compound  annual  rate  of  52%,  to  reach  $19.8  billion  by  2015.         In  addition  to  the  “media  buy”  of  mobile  marketing  communications  expenditure,  we  also   measured  separate  “overhead”  expenditures  on  supplemental  marketing  services  and  internal   support  costs  that  marketers  and  retailers  incur  as  a  direct  result  of  their  mobile  marketing   activities.  (These  include  such  costs  as  agency  and  PR  fees,  media  measurement  and  metrics   services,  etc.)     This  class  of  expenditure  represented  an  additional  $3.9  billion  in  2012,  and  will  likely  rise  to   $10.5  billion  by  the  year  2015.       Thus,  when  spending  on  mobile  marketing  related  services  and  supplemental  internal  support   is  combined  with  that  on  marketing  communications  in  mobile,  total  mobile  marketing   expenditure  in  the  US  attains  $10.6  billion  for  2012,  and  will  reach  $30.4  billion  by  2015.    

 

3  

Table  1:  Mobile  Marketing  Communications  Spending  in  United  States  ($Millions)  
  Mobile  Marketing  Investment   Mobile  Media  Adv   Mobile  DR  Enhanced  Trad'l  Adv   Mobile  CRM   2010   2011   2012   2013   2014   2015   CAGR    2010-­‐ 2015   52%   56%   77%   44%  

2,405   3,957   6,693   10,456   15,162   19,806   991   1,743   3,060   166   336   669   1,248   1,878   2,964   4,871   1,312   4,273   7,078   2,174   5,910   9,207   2,912   7,686  

Source:  mLightenment  

 

  We  also  compared  mobile  marketing  spending  across  the  16  broad  industry  groups  into  which   we  classified  the  US  economy  for  the  purposes  of  this  study.    Finance,  retail  (excl.  CPG),  and   manufacturing  (excl.  CPG)  are  the  three  largest  industries  in  terms  of  spending  on  mobile   marketing.    The  three  industries  spent  over  $3  billion  in  2012  or  about  half  of  total  mobile   advertising  spending.    In  terms  of  growth,  the  resources  industry  (agriculture,  mining,  utilities,   and  construction)  is  projected  to  grow  the  fastest,  followed  by  manufacturing  (excl.  CPG),  and   educational  services.    (Summary  results  for  each  industry  can  be  found  in  the  main  body  of  this   report,  and  full  details  for  each  industry  can  be  found  in  excel  workbooks  that  accompany  this   report.)     Finally,  we  examined  mobile  marketing  spending  as  it  occurred  at  the  state  level.    This  shows   differences  across  the  states  depending  on  the  size  of  the  states  in  terms  of  the  economic  and   demographic  attributes.    The  three  largest  states  that  generated  the  highest  mobile  marketing   spending  in  2012  were  California  ($865  million),  New  York  ($587  million),  and  Texas  ($573   million).    We  expect  that  these  three  states  will  comprise  more  than  30%  of  the  total  mobile   marketing  spending  by  2015.  North  Dakota,  Washington,  and  Texas  are  the  states  with  largest   expected  rate  of  growth  in  mobile  marketing  spending,  through  2015.    (Full  details  for  each   state  and  the  District  of  Columbia  can  be  found  in  excel  workbooks  that  accompany  this  report.)   Mobile’s  Very  Substantial  Sales  Impact  On  The  U.S.  Economy     Marketing  communications  via  mobile  have  a  very  substantial  and  positive  sales  impact  on  the   output  of  the  U.S.  economy,  amounting  to  almost  $140  billion  in  additional  sales  realized  during   the  course  of  2012.  This  figure  is  forecast  to  rise  to  just  over  $400  billion  in  2015.  2015’s   amount  represents  a  vigorous  five-­‐year  compound  annual  growth  rate  of  52%,  relative  to  the   $48  billion  in  net  sales  that  mobile  added  to  the  U.S.  economy  back  in  2010.         Mobile  Media  is  the  largest  contributor  to  advertising  driven  sales  impact,  followed  by  Mobile   CRM.    The  sales  impact  and  growth  rates  are  expected  to  be  roughly  in  line  with  the  level  of   investments  in  the  respective  marketing  categories.    
Table  2  Mobile  Marketing  Sales  Impact  in  United  States  ($Millions)  
  2010   2011   2012   2013   2014   2015   CAGR    2010-­‐ 2015  

 

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Total  Sales  Impact   Mobile  Media  Adv   Mobile  DR  Enhanced  Adv   Mobile  CRM  

48,627   25,530   2,705   20,392  

85,300   46,814   5,694   32,792  

139,003   73,811   10,280   54,912  

216,931   115,010   18,866   83,056  

311,566   163,052   30,059   118,455  

400,971   204,345   36,682   159,943  

52%   52%   68%   51%  

Source:  mLightenment  

  The  sales  impact  of  mobile  marketing  varies  across  our  16  major  industries  and  the  expected   rate  of  growth  is  influenced  both  by  the  extent  of  marketing  investment  and  also  the  trend  in   mobile  device  adoption,  media  consumption  and  marketing  engagement  by  key  population   demographics,  particularly  as  these  affect  mobile  marketing’s  “share  of  mind”  and  share  of   “buying  power”  among  end-­‐customers  relative  to  other  media.         While  we  have  seen  that  the  resources,  manufacturing  (excl.  CPG),  and  the  educational  services   are  the  fastest  growing  industries  in  terms  of  marketing  investment,  retail  trade  (CPG),   manufacturing  (CPG),  and  educational  services  are  the  fastest  growing  industries  in  terms  of   mobile  marketing  driven  revenue  contributions.  
 

Marketing  Impact  Ratio  (MIR)  for  Mobile  Marketing  Communications   Marketing  Impact  Ratio  (MIR)  is  calculated  by  the  simple  formula:      $  Total  Industry  Sales   Impact  /  $  Total  Industry  Expenditure.       Our  research  indicates  that  the  marketing  impact  ratio  (MIR)  for  mobile  marketing   communications  probably  peaked  at  a  high  of  $20.77  in  2012.    It  is  now  expected  to  plateau  or   decline  very  slightly  over  the  forecast  period,  reaching  $20.25  in  2015.    Two  factors  in  particular   account  for  this  leveling  off:    first,  we  expect  increased  expenditure  on  mobile  by  marketers;   second,  we  expect  the  demographic  profile  of  the  mobile  end-­‐customer,  which  previously  was   disproportionately  comprised  of  younger,  high  income  demographics,  will  begin  to  more  closely   resemble  that  of  the  U.S.  population  as  a  whole,  especially  as  late-­‐adopter  segments  acquire   the  latest  generation  of  smart  devices.      
       

 

 

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Figure  1:    MIR  for  Mobile  Marketing  Communications  
$30   $25   $20   $15   $10   $5   $0   2010   2011   2012   2013   2014   2015  

Total  Mobile  Marketing   Mobile  Media  Adv   Mobile  DR  Enhanced  Trad'l  Adv   Mobile  CRM  

 

  However,  not  all  categories  of  mobile  marketing  will  have  falling  MIR  –  Mobile  CRM  is  projected   to  grow  at  an  annual  rate  of  4%,  growing  from  $18.53  in  2012  to  $20.81  by  2015.    This  is  due  to   the  increased  role  of  consumers  themselves  in  the  distribution  and  even  creation  of  marketing   content  via  mobile-­‐enabled  social  media  and  location-­‐based  services.     Marketing  Impact  Ratio  by  Industry:  Does  Mobile  Escape  the  “Law  of  Diminishing  Returns”?   The  MIR  and  spending  data  raise  one  unexpected  question:  is  it  possible  that  the  law  of   diminishing  returns  may  not  apply  to  mobile  marketing  spending?    We  observe  that  MIR  figures   for  the  top  and  bottom  four  mobile  marketing  spenders,  by  industry,  seem  to  show  that   spending  more  does  not  decrease  the  impact  rate  as  expected;  on  the  contrary,  the  highest   industry  expenditure  and  the  highest  industry  impact  ratios  go  together,  as  do  the  lowest   expenditures  and  the  lowest  MIR.    While  no  more  than  suggestive,  this  observation  is  intriguing   and  deserves  further  exploration.  We  give  more  discussion  and  offer  possible  explanations  for   this  at  the  end  of  the  section  “Mobile  Marketing’s  Sales  Impact  on  the  US  Economy.”   Mobile  Marketing’s  Impressive  Employment  Impacts   Our  research  reveals  that  in  2012,  spending  by  marketers  on  mobile  marketing  generated   524,000  jobs  from  the  combination  of  advertiser  employment  and  product  seller  employment.   This  is  expected  to  reach  an  impressive  1.4  million  jobs  by  2015.     Mobile  marketing  communications  advertiser  jobs  are  the  most  direct  form  of  employment   generation  employing  a  number  of  people  in  activities  such  as  ad  designing,  programming,   analytics,  marketing,  administrative  staff  etc.    In  2012,  over  21  thousand  persons  were  directly   employed  in  mobile  marketing  communications  occupations  and  the  industry  is  projected  to  
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employ  64  thousand  such  individuals  by  2015,  growing  at  an  average  rate  of  44%  per  year.    The   Mobile  DR  category  is  expected  to  grow  fastest,  employing  over  nine  thousand  people  by  2015.      
Table  3:  Advertiser  Employment  From  Mobile  Marketing  Communications  
  Total  Advertiser  Employment   Mobile  Media  Adv   Mobile  DR  Enhanced  Trad'l  Adv   Mobile  CRM   2010   7,983   3,265   549   4,169   2011   12,672   5,540   1,073   6,059   2012   21,275   9,655   2,123   9,497   2013   33,453   15,465   4,190   13,798   2014   48,744   22,568   6,978   19,197   2015   64,053   29,512   9,402   25,139   CAGR     2010-­‐2015   52%   55%   76%   43%  

Source:  mLightenment  

    The  number  of  mobile  advertiser  jobs  by  industry  is  proportional  to  the  amount  of  expenditure   in  adverting.    Thus,  finance,  retail,  and  manufacturing  industries  are  also  the  largest  markets  for   advertiser  jobs.    About  3.3  jobs  were  created  in  2010  for  every  million  dollar  spent  on  mobile   advertisement.    This  was  3.18  in  2012  and  is  projected  to  stay  close  to  3.2  during  the  forecast   years.         The  incremental  product  sales  resulting  from  successful  deployment  of  mobile  marketing  will   require  hiring  additional  workers  by  the  product  sellers,  manufacturers,  or  the  service  providers   in  order  to  scale  up  the  production.    In  2012,  the  seller  employment  attributed  to  mobile   marketing  is  502,562  persons.    This  is  projected  to  grow  at  a  rate  of  40%,  employing  about  1.38   million  persons  by  2015.    While  the  advertising  spending  is  highest  in  the  Mobile  Media   category,  the  seller  employment  impact  is  highest  in  Mobile  CRM  category.    
Table  4  Mobile  Marketing  Seller  Employment  
  2010   CAGR     2010-­‐ 2015   Mobile  Marketing  Seller  Employment   188,913   312,914   502,562   773,685   1,091,017   1,379,587   49%   Mobile  Media  Adv   Mobile  DR  Enhanced  Trad'l  Adv   Mobile  CRM   84,055   145,013   222,885   340,840   11,557   23,010   40,438   72,766   93,301   144,891   239,239   360,079   468,767   113,173   509,077   570,239   134,068   675,280   47%   63%   49%   2011   2012   2013   2014   2015  

    The  seller  employment  by  industry  is  driven  by  incremental  sales  demand  generated  in  each   industry  as  a  result  of  the  successful  distribution  of  mobile  marketing  communications.    In   2012,  75  seller  jobs  were  created  for  every  million  dollar  of  mobile  advertising  spending.     However,  this  is  projected  to  fall  by  2%  annually,  reaching  70  jobs  per  million  dollar  of   advertising  spending.    Industry-­‐specific  seller  employment  impacts  show  that  retail  (other),   finance,  and  professional  services  are  the  largest  job  creators.    Seller  employment  in  retail  trade   (CPG)  will  grow  the  fastest,  followed  by  the  professional  services  industry.    

 

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Mobile  Marketing’s  Consumer  Privacy  Landscape   All  of  the  foregoing  impacts  presuppose  that  the  mobile  marketing  ecosystem  continues  to   enjoy  its  current  baseline  levels  of  consumer  trust  and  freedom  from  technologically   inappropriate  or  economically  counter-­‐productive  privacy  legislation.       Without  consumer  trust,  no  marketing  media  can  sustain  the  high  levels  of  customer   engagement  necessary  to  deliver  scalable  sales  impacts.  The  always-­‐on,  always-­‐present   personal  character  of  the  mobile  device  introduces  new  communications  opportunities  for   mobile  marketers  while  raising  new  issues  for  the  industry  about  how  best  to  ensure   consumers  continue  to  trust  the  privacy  practices  of  a  medium  they  are  already  deeply  engaged   with.         Various  areas  —  particularly  mobile  apps’  ability  to  access  consumer  data,  such  as  current   location,  address-­‐books,  etc.—currently  represent  areas  of  mobile  technology  where  industry   best  practices  are  rapidly  developing.       On  the  self-­‐regulatory  front,  the  Digital  Advertising  Alliance  (DAA),  a  coalition  representing  all   the  major  marketing  and  advertising  trade  groups,  will  be  releasing  principles  and  guidelines  for   mobile.  This  forthcoming  guidance,  based  on  the  existing  and  widely  implemented  DAA  Self-­‐ Regulatory  Principles,  will  apply  to  the  mobile  environment  and  respond  to  the  fact  that  the   principles  may  vary  based  on  technological  demands.    The  guidance  therefore  explains  how  the   DAA  principles  of  transparency  and  consumer  control  should  be  implemented  in  a  mobile   device  setting.    Data  covered  by  the  new  guidance  will  include  precise  location  data  as  well  as   data  gathered  across  non-­‐affiliated  applications  over  time.     Finally,  and  perhaps  most  significantly,  the  controls  offered  by  platforms  continue  to  evolve,   providing  consumers  with  new  controls  over  data  collection  and  use,  as  well  as  greater   transparency,  which  should  engender  trust.     Ultimately,  our  economic  impact  assessment  for  both  sales  and  incremental  jobs  assumes  that   incremental  adjustments  at  the  regulatory  and  industry  best  practices  level  will  continue  to   communicate  trust  and  value  to  customers  in  a  manner  that  sustains  the  massive  shift   underway  to  consumer  media  consumption  and  commercial  activity  via  smartphones  and   tablets.    That  said,  our  report  cannot  exclude  the  possibility  that  a  major  economic  shock  arising   from  a  legislative  change  to  the  public  policy  framework  from  Congressional  or  state-­‐level   legislators  could  alter  the  impact  assessments  reported  here  at  some  point  during  the  forecast   period.    (For  a  more  detailed  discussion  of  privacy  issues,  see  the  section  of  this  report  on   Consumer  Data  Best  Practices  and  Privacy.)  

 

 

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Envisioning  the  Mobile-­‐Marketing  Enhanced  Society  and  Economy  of  Tomorrow   Mobile  marketing’s  impact  in  the  United  States  reaches  beyond  the  most  obvious  benefits  that   are  easily  measured  in  jobs  and  revenue.    These  include  hard,  but  not  impossible  to  quantify   benefits  to  society  at  large,  together  with  even  subtler  changes  in  marketer  and  consumer   expectations  about  what  the  products  and  services  and  even  communications  opportunities  in   the  marketplace  of  tomorrow  will  look  like.    These  developments  are  pointing  towards  a   “mobile  marketing  enhanced  economy”  just  over  the  horizon.       In  the  section  of  our  study  on  mobile  marketing’s  social  impact,  we  looked  at  several  examples   of  how  mobile  marketing  communications  and  have  begun  to  merge  with  valuable  “consumer   content  services”  that  are  already  starting  to  show  the  potential  for  enormous  benefits  on   American  society  in  areas  that  are  not  conventionally  considered  part  of  a  media’s  economic   impact.         For  example:  by  reducing  the  time  and  thus  gasoline  expended  looking  for  a  parking  spot,  a   simple  parking  app  such  as  was  introduced  two  years  ago  in  San  Francisco  could  potentially   save  $360,000  each  day  in  gasoline  and  reduce  air  pollution.  If  it  were  extended  across  all  major   cities  nationally,  a  simple  app  could  have  the  potential  to  save  hundreds  of  million  of  dollars  in   wasted  gasoline  each  year,  avoid  significant  quantities  of  air  pollution,  and  save  drivers  untold   hours  of  time.       Likewise,  currently  existing  apps  from  national  pharmacy  chains  could  easily  have  a  dramatic   effect  on  reducing  adverse  drug  events  (ADEs),  many  of  which  are  attributable  to  missed  does   of  prescription  medications.  ADEs  lead  to  700,000  avoidable  emergency  room  trips  each  year,   and  well  over  100,000  avoidable  hospitalizations.  Apps  that  remind  customers  to  refill   prescriptions  or  simply  take  medications  on  time  could  very  conservatively  save  tens  of  millions   annually  in  health  care  costs,  simply  by  supporting  U.S.  patients  suffering  from  diabetes,  high   cholesterol,  and  high  blood  pressure.       These  are  but  a  tiny  sliver  of  the  blending  of  marketing  and  social  benefit  that  is  beginning  to   take  place.      We  believe  it  heralds  a  new  mindset  in  consumers  that  marketers  themselves  need   to  pay  attention  to.    Too  much  of  the  debate  about  mobile  we  believe  has  been  about  its   importance  as  the  “third”,  “second,”  or  even  “first”  screen  for  delivering  advertising  or   marketing  communications.    We  think  the  image  of  mobile  as  [mere]  ‘screen’  needs  to  be   deleted  and  replaced  with  something  better:  mobile  as  “camera”  (or  microphone,  or  digital   crayon  box  -­‐-­‐  any  active  image  will  do.)           Why  is  it  important  for  marketers  to  replace  ‘screen’  with  ‘camera’?         Simply  this.    As  mobile  smart  consumers  go  about  their  daily  lives,  they  do  not  think  of   themselves  as  passive  inboxes  for  the  branding  ideas  of  others;  instead,  smart  mobile   consumers  (younger  ones,  especially)  think  of  themselves  as  ‘directors’  and  ‘stars’  of  their  own   lives;  armed  with  mobile  video  camera,  microphone,  and  yes,  lights,  they  are  the  creative  co-­‐
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producers  and  co-­‐distributors  of  original  marketing  communications  that  expresses  their   passionate  interest  in  products  or  services  or  experiences  they  care  about.       And  many  of  which  mobile  consumers  will  begin  to  co-­‐create.    In  the  mobile-­‐marketing   enhanced  marketplace  of  tomorrow,  the  confluence  of  marketer-­‐created  but  consumer   directed  mobile  communications  opportunities  will  open  up  more  places  for  things  to  become   far  more  than  just  products  or  services.         As  mobile-­‐enhanced  products  and  services,  consumer-­‐generated  mobile  content  will  add  value   that  greatly  exceeds  the  physical  object  to  which  it  may  be  attached,  or  through  which  it  may   be  delivered.    The  best  of  these  mobile  enhancements  to  brands  we  suspect  will  not  necessarily   come  from  brand  managers.    We  suspect  that  eventually  even  the  products  themselves  will  be   developed,  promoted  and  perhaps  even  built  by  the  smart  mobile  consumer  with  mobile  baked   in  from  the  beginning  -­‐-­‐  who  knows,  by  building  it  using  the  3-­‐D  printer  in  their  garage  -­‐-­‐  and  of   course,  another  mobile  consumer  will  take  a  picture  and  post  it,  making  the  new  mobile   enhanced  product  of  tomorrow  a  viral  sensation  before  the  paint  on  it  is  even  dry.           And  all  of  this  will  be  possible  because  the  smart,  mobile-­‐enhanced  marketers  of  tomorrow  will   find  new  ways  to  help  it  happen.   Addendum:    An  Overview  of  mLightenment’s  Methodology     This  study  quantifies  both  the  size  of  mobile  marketing  spending  in  the  US  and  also  the  sales   and  employment  impact  of  such  activities.    While  the  sales  impact  measures  the  value  of   additional  revenues  generated  as  a  result  of  mobile  marketing  communications,  the   employment  impact  measures  both  the  advertiser  employment  and  seller  employment.    The   advertiser  employment  includes  the  number  of  persons  employed  directly  in  the  mobile   marketing  businesses.    The  seller  employment  includes  the  number  of  persons  hired  by  the   product  seller  or  the  manufacturers,  in  response  to  the  incremental  product  demand  arising  out   of  mobile  marketing  communications  sales  lifts.     For  the  purposes  of  assessing  mobile  marketing’s  impact  on  the  US  economy,  we  began  with   the  Mobile  Marketing  Association’s  current  definition  of  mobile  marketing:  “A  set  of  practices   that  enables  organizations  to  communicate  and  engage  with  their  audience  in  an  interactive   and  relevant  manner  through  any  mobile  device  or  network.”3             Accordingly  we  defined  mobile  marketing  communications  expenditure  as  money  spent  by  any   industry  to  send,  receive,  or  exchange  any  form  of  marketing  communications  (bought   “advertising”,  marketer  “owned”  content,  or  so-­‐called  “earned”  social  or  word  of  mouth  media)   with  mobile  consumers  via  consumers’  qualifying  mobile  devices;  and  we  defined  mobile   marketing’s  sales  impact  as  purchases  of  any  industry’s  goods  or  services  in  any  location  by                                                                                                              
3

“MMA  Updates  Definition  of  Mobile  Marketing,”  MMA,  November  17,  2009,   http://www.mmaglobal.com/news/mma-­‐updates-­‐definition-­‐mobile-­‐marketing     10  

end-­‐customers  as  a  result  of  marketing  communications  accessed  via  their  qualifying  mobile   device.4     To  ensure  our  economic  metrics  included  the  full  scope  of  today’s  mobile  marketing,  we   researched  mobile  marketing  communications  in  each  of  three  different  categories  of   marketing  activity:       (1)  Mobile  Media  Advertising  (“bought”  media)     (2)  Mobile  Direct  Response  (DR)  Enhanced  Non-­‐Mobile  Media,  (also  “bought”  media)   (3)  Mobile  Content  and  Relationship  Marketing  (mCRM)  (“owned”  and  “earned”  media).     To  ensure  that  expenditure  and  sales  impacts  within  each  type  of  marketing  communications   were  non-­‐overlapping  and  genuinely  “mobile,”  these  marketing  communications  were  analyzed   into  seven  specific  mobile  media  or  connective  technologies:       (1)  Mobile  Voice,     (2)  SMS/MMS,     (3)  Mobile  Email,   (4)  Mobile  Web,   (5)  Mobile  Apps,     (6)  Proximity  (Bluetooth,  NFC,  RFID),   (7)  Recognition  (primarily  QR  codes,  audio  &  image  scanning,  etc.).     Mobile  marketing’s  expenditure  and  economic  impacts  were  measured  by  classifying  the  US   economy  into  16  major  industry  groups  and  applying  an  econometric  modeling  process  that   correlates  categories  of  productive  investment  across  all  industries  with  sales  accruing  to  those   industries.  These  broad  industry  groups  are  based  on  the  North  American  Industry  Classification   System  (NAICS)  and  are  described  in  the  Appendices  to  this  report.  (For  a  more  thorough   discussion  of  what  our  taxonomy  includes,  and  why,  please  see  the  section  titled  Understanding   Mobile  Marketing.)     The  underlying  calculations  used  to  determine  the  sales  and  employment  impact  were  done  at   the  direction  of  mLightenment  by  its  economic  partners  at  IHS  Global  Insight,  the  world’s   foremost  industry  research  and  econometric  forecasting  firm.  Global  Insight  used  its  large   macro-­‐economic  input-­‐output  model  of  the  US  economy,  in  which  statistical  methods   compared  industry  expenditure  on  media  and  marketing  with  expenditures  on  other  media  and   other  factors  inputs  (e.g.,  IT,  raw  materials)  for  major  industries.    These  were  then  correlated   statistically  with  variations  in  intermediate  and  final  demand  for  industry  output  across  end-­‐ customer  segments  (both  mobile  and  non-­‐mobile)  over  time.    The  model’s  resulting  input-­‐                                                                                                            
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 Qualifying  devices  primarily  means  feature  phones,  smartphones,  tablets  and  eReaders;  and  “mobile  consumers”   always  includes  business  users,  unless  otherwise  indicated.)  In  addition  to  expenditure  on  the  variable  costs  of  the   “media  buy”,  we  separately  calculated  the  more  “fixed”,  or  “overhead”  costs  incurred  with  related  mobile   marketing  services  providers,  such  as  agencies,  research  providers,  etc.     11  

output  coefficients  identify  that  portion  of  any  industry’s  revenue  that  is  uniquely  attributable   to  mobile  marketing  communications.        

 

 

 

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Understanding  Mobile  Marketing  
The  objective  of  our  research  was  to  measure  the  size  and  impact  of  mobile  marketing  on  the   US  economy.  More  than  we  realized  when  we  first  embarked  on  this  work,  the  necessary  first   step  of  defining  what  mobile  marketing  is—deciding  what  “counts”  as  mobile  marketing  and   what  does  not—would  prove  to  be  a  research  undertaking  unto  itself.  What  we  found  was  a   device  whose  power,  ubiquity  and  versatility  was  already  beginning  to  sweep  away  a  century’s   worth  of  deeply  held  assumptions  and  categories.       A  decade  ago  researchers  could  have  counted  on  knowing  automatically  what  the  various   marketing  media  were,  what  their  boundaries  were  that  separated  them,  what  were  the   specific,  separate  and  distinct  roles  of  players  in  the  industry:  retailers  sold  things,  publishers   distributed  news  and  entertainment,  marketers  bought  advertising  or  distributed  coupons  and   anonymous,  ordinary  people  leaned  back  to  consume  media  at  home  and  buy  products  in   stores,  while  researchers  tried  to  connect  the  former  to  the  latter.       Today,  in  a  marketing  world  more  and  more  conquered  by  smart  consumers  armed  with   smartphones  and  smart  tablets,  this  clarity  is  no  longer  the  case.    

What  Is  Mobile  Marketing?  
According  to  the  Mobile  Marketing  Association  (MMA),  “Mobile  marketing  is  a  set  of  practices   that  enables  organizations  to  communicate  and  engage  with  their  audience  in  an  interactive   and  relevant  manner  through  any  mobile  device  or  network.”5  Our  study  takes  this  definition  as   our  point  of  departure,  but  makes  a  slight  adjustment  to  make  it  more  immediately  applicable   to  an  economic  impact  study.  For  us,  therefore,  mobile  marketing  comprises  any  exchange  of  or   engagement  with  marketing  communications  that  occur  between  or  among  marketers  and  end   customers  via  customers’  wirelessly  connected  mobile  devices.     By  the  term  “wirelessly  connected,”  we  mean  all  the  various  means  of  transmitting  voice,  text   messages,  Internet  traffic  (data)  and  GPS  over  a  wide  area  and  also  the  proximate  ways  that   mobile  devices  can  exchange  information  within  and  with  their  immediate  environments—e.g.,   scanning,  swiping,  tapping,  bumping,  etc.     By  the  word  “exchange,”  we  mean  not  merely  the  one-­‐way  broadcasting  of  messages  from   marketers  to  end  users  or  customers,  but  also  end-­‐user  communications  to  marketers,  whether   they  are  responses  to  such  messages  or  messages  sent  on  a  consumer’s  own  initiative;  we  also   include  “word  of  mouth”  marketing  communications6  that  may  be  created  by  mobile                                                                                                              
5 6

 www.mmaglobal.com      According  to  the  Word  of  Mouth  Marketing  Association,  WOM  is  “the  sharing  of  marketing-­‐relevant  information   among  consumers”  and  WOM  marketing  is  “efforts  by  an  organization  to  encourage,  facilitate  and  amplify   marketing-­‐relevant  communication  among  consumers.”  We  follow  WOMMA  in  regarding  Social  Media  marketing   and  WOM  marketing  as  closely  related  but  not  synonymous.    For  definitions  and  discussion  of  WOM  and  Social     13  

consumers  about  a  third-­‐party  product,  service  or  company  or  mobile-­‐shared  with  peers,  such   as  when  a  consumer  snaps  a  picture  of  a  product  in  a  store  with  their  smartphone  and  forwards   it  to  a  friend  or  family  member  with  a  recommendation  that  they  buy  it.  This  may  seem  like  a   fairly  sweeping  definition,  and  it  is.  As  we  will  see  below,  we  believe  it  fits  the  facts  of  today’s   mobile  marketing.  Anything  more  restrictive  would  mislead  the  reader  about  how  much  mobile   marketing  is  poised  to  explode  the  meaning  of  marketing  well  beyond  traditional  advertising   pushed  to  a  screen.       Who  are  the  players  in  mobile  marketing?       For  measuring  expenditure  on  mobile  marketing,  the  key  players  are,  first  of  all,  marketers  in   any  industry  that  spend  money  to  create,  send,  or  receive  mobile  marketing  communications.   Marketers,  for  us,  include  retailers.       Industry’s  marketing  communications  dollars  are  spent  with  business  services  providers  of  two   kinds:  a)  providers  of  mobile  advertising  inventory  (publishers  and  networks,  including  non-­‐ digital  -­‐  about  this,  see  more  below)  and  mobile  content  platform  providers  and  developers   (such  as  those  providing  access  to  the  SMS  network  for  marketers,  or  who  develop  proprietary   apps  on  marketers’  behalf);  and  b)  providers  of  related  mobile  marketing  services,  such  as   advertising  and  PR  agencies,  audience  measurement  and  analytics  services  providers,  and   network  access  providers.       In  terms  of  measuring  the  sales  impacts,  our  population  of  interest  is  “mobile  equipped  end-­‐ customers  and  prospects.”  This  term—which  we  shall  generally  avoid  using  in  favor  of  mobile   consumers—includes  all  end  users  of  wirelessly  connected  mobile  devices,  whether  they  own   the  device  (and  pay  its  network  access  charges)  or  are  merely  users  of  devices  owned  and  paid   for  by  someone  else.  Mobile  consumers  therefore  include  individuals  whose  device  is  part  of  a   family  plan  owned  by  a  principal  subscriber  as  well  as  individuals  whose  employers  have  issued   them  a  device.  In  the  pages  that  follow,  then,  the  corporate  road-­‐warrior  with  her  company-­‐ issued  Blackberry  or  iPad  is  not  forgotten.    

How  Mobile  Marketing  Is  Transforming  Marketing  
Although  the  use  of  mobile  phones  is  nearly  universal  in  the  U.S.—published  figures  estimate   that  over  85%  of  the  American  adult  population  has  a  mobile  subscription,  the  great  majority  of   which  are  at  3G  speeds,  or  faster—the  mobile  phone  as  a  vehicle  for  exchanging  phone  calls  is   but  a  tiny  piece  of  the  communications  platform  on  which  mobile  marketing  rests.  Three   important  implications  followed  for  our  study.                                                                                                                                                                                                                                                                                                                                                                  
Media  Marketing’s  ROI  implications,  see  Solving  The  ROI  Riddle:  Perspectives  from  Marketers  on  Measuring  Word   of  Mouth  Marketing,  p.  3ff.    Word  of  Mouth  Marketing  Association,  2012.  Available  at   http://members.womma.org/p/cm/ld/fid=17&tid=38&sid=128     14  

The  first  is  that  Americans  are  now  more  and  more  ubiquitously  tethered  to  digital   communications  via  their  mobile—physically  and  virtually—and  we  realized  that  the  form  and   content  of  communications  could  no  longer  be  defined  by  the  device  or  network  that  carried  it.   If  we  didn’t  already  realize  that  video  was  no  longer  synonymous  with  TV  in  the  living  room,   audio  with  radio  in  the  car,  or  “news”  was  delivered  by  “paper”  or  “direct”  was  to  be  followed   by  “mail”,  studying  the  myriad  ways  in  which  mobile  devices  transgress  ancestral  media,   content,  and  format  boundaries  has  convinced  us  of  it.  Whether  it  was  disentangling  the   volume  of  Internet  traffic  that  was  PC  or  mobile  based,  or  figuring  out  what  difference  it  made   whether  much  social  media  video  was  being  consumed  on  tablets  while  the  consumer  was   watching  TV,  the  media  researcher  has  their  work  cut  out  for  them.       A  decade  or  so  ago,  it  would  have  been  easy  to  say  what  was  mobile  and  what  wasn’t:  it  was   the  black  plastic  brick  you  held  to  your  ear  while  you  shouted  to  make  yourself  understood.   Today’s  mobile  device  is  a  toolkit  of  multiple  media  held  in  front  of  us  like  an  electronic   dowsing  rod,  a  communications  matrix  of  virtual  ecosystems,  each  of  which  seems  to  have  not   only  its  defining  technical  attributes  but  also  its  own  folkways.  These  devices  are  redefining  the   entire  media  landscape  and  creating  a  variety  of  “mobile  microclimates”  based  on  the  varying   combinations  of  devices  people  choose  to  employ  for  particular  places  and  purposes  as  they   travel  through  their  daily  lives.    For  marketers,  understanding  mobile  microclimates  such  as   “show-­‐rooming”  is  the  heart  of  the  mobile  marketing  challenge  and  opportunity.       The  second  implication  is  that  consumers,  particularly  in  the  US,  are  adopting  an  increasing   variety  of  smart  mobile  devices  (such  as  iPods,  iPads,  mini  tablets,  and  e-­‐readers)  that  are  no   less  mobile  than  their  phones  and,  from  a  marketing  standpoint,  may  become  even  more   valuable.  These  devices  enjoy  greater  compatibility  with  various  kinds  of  consumer  content   (such  as  video  and  games),  greater  flexibility  in  marketing  communications  (such  as  rich  media   advertising  through  apps),  and  greater  utility  in  certain  marketing  situations  (such  as   interactive,  out-­‐of-­‐home  advertising,  and  in-­‐store  comparison  shopping).       The  third  consequence  for  us  involved  realizing  how  beholden  marketers  are  to  some  very   static  measurement  assumptions  and  resources,  systems  that,  except  for  those  of  out-­‐of-­‐home   advertising  and  drive-­‐time  radio,  assume  that  content  and  marketing  communications  are   distributed  in  discrete,  self-­‐contained  chunks  and  that  viewership,  readership,  and  listenership   take  place  at  certain  fixed  spots  at  certain  appointed  hours.  But  all  of  this  is  far  too  static  for  the   mobile  media  delivery  and  consumer  consumption  habits  that  stared  us  in  the  face.  The  more   flexible,  dare  we  say  “mobile,”  metrics  needed  to  measure  mobile  marketing  are  still,  relatively   speaking,  in  their  infancy,  but  more  are  needed,  and  more  marketers  need  to  learn  them  when   they  arrive.  

Location:  The  Defining  Attribute  of  Mobile  Marketing  
In  principle,  every  mobile  device  must  be  uniquely  “locatable”  in  real  time  within  an  electronic   network  in  order  to  receive  and  correctly  route  individualized,  two-­‐way  network  
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communications.  For  that  reason,  we  consider  identifiable  location  to  be  THE  defining  feature   of  the  mobile  marketing  ecosystem.  We  define  mobile  devices  as  those  that  are  uniquely   identifiable  and  location-­‐aware  while  roaming  anywhere  within  an  electronic  network.  Usually,   these  devices  integrate  one  of  the  following  forms  of  location-­‐aware  technology.   Location-­‐Based  Services:    From  Network  Location  to  Real-­‐World  Location   Originally,  network  location  in  cellular  was  necessary  for  routing  calls  between  devices.  It  was   determined  by  calculating  the  distance  a  cell  phone  was  from  numerous  short-­‐range  broadcast   towers  distributed  in  a  honeycomb  of  “cells”  around  the  country.    But  it  was  not  long  before   the  mobile  ecosystem  realized  that  by  converting  a  meaningless  network  location  into  an   approximate  real-­‐world  geographic  location  within  a  several-­‐block  radius  (assuming  an  urban   environment),  new  kinds  of  services  could  be  provided  to  the  consumer  -­‐  and  eventually,  to   marketers.  This  opportunity  became  even  more  attractive  once  mobile  devices  equipped  with   GPS  transceivers  allowed  the  device  to  be  located  in  real-­‐time  within  a  very  precise  radius  -­‐-­‐   often  a  matter  of  a  mere  meter  or  two.         Location-­‐based  services  (LBS)  are  perhaps  the  most  important  and  distinctive  content   contribution  of  the  mobile  ecosystem  to  the  marketing  industry,  since  other  media,  including   the  desktop  Internet,  are  normally  not  able  to  target  user  location  much  more  precisely  than   within  the  radius  of  a  city  or  county.    They  comprise  publisher  and/or  marketing   communications  content  containing  structured  geographical  information  tailored  to  the  mobile   recipient’s  precise  real-­‐time  location.7  LBS  includes  things  such  as  maps,  turn-­‐by-­‐turn  driving   and  walking  directions,  buddy-­‐locators,  location-­‐based  social  media  platforms  such  as  Yelp  and   hyper-­‐locally  targeted  advertising,  including  so-­‐called  “geo-­‐fencing”  in  which  the  mobile  device   receives  different  advertising  content  based  on  its  presence  within  a  perimeter  defined  by  the   advertiser.       For  marketers,  real-­‐time  awareness  of  consumers’  hyper-­‐local  current  location  opens  new  and   exciting  vistas  of  popular  consumer  content  and  marketer  segmentation  and  targeting  that   many  expect  to  attract  large  audiences  and  boost  the  effectiveness  of  almost  all  marketing   communications  associated  with  them,  potentially  allowing  marketers  to  infer—though  not   quite  yet—what  consumers  are  most  likely  interested  in  buying  at  certain  times  in  a  particular   context  or  while  traveling  along  certain  routes,  thus  increasing  the  relevance  of  marketing   communications,  resulting  in  increased  utility  and  higher  net  impact  for  the  marketer—much  as   the  less  precise  ZIP-­‐Code  and  census  tract  segmentation  does  for  direct  mailers.     But  first  the  consumer  must  “opt-­‐in.”  Tapping  “I  agree”  when  an  app’s  privacy  dialogue  box   pops  up  to  ask  if  you  want  to  share  your  current  location  is  a  vote  of  confidence  the  marketer   or  publisher  is  asking  the  consumer  to  make  millions  of  times  a  day.  Sharing  location   information  with  publishers  and  marketers  offers  numerous  benefits,  including  access  to   mapping  services,  directions,  social  connections,  weather  reports,  and  even  astronomical  data.                                                                                                              
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Various  popular  apps  such  as  Foursquare,  Gowalla,  and  Loopt  rely  on  location  information,  but   our  study  had  to  confront  how  many  consumers  take  the  location  plunge,  and  what  difference   it  makes  for  the  economy.  Our  research  suggests  that  though  the  exact  formats  and   beneficiaries  of  locations  based  services  are  likely  to  change,  location-­‐based  technologies  and   services  will  continue  to  grow  in  power  and  precision  as  marketers  learn  how  to  make  more   effective  use  of  them  and  as  consumers  understand  and  become  comfortable  with  the  benefits   of  sharing  location  information.     SoLoMo  (Social-­‐Location-­‐Mobile):  An  Acronym  to  Reckon  With   A  similar  situation  confronted  us  with  social  media,  especially  the  confluence  of  mobile  and   location  with  social  networking  known  as  SoLoMo.  Readers  whose  formative  experience  with   social  networking  was  shaped  by  the  desktop  (or  laptop)  Internet  may  not  fully  appreciate  just   what  a  perfect  marriage  has  been  consummated  between  smart  devices  and  socially  enabled   on-­‐the-­‐go,  any-­‐format-­‐any-­‐time  consumer  content  creation  and  sharing.  Enjoying  your   restaurant  outing?  Snap  a  pic  of  the  dessert  you’re  sharing  with  your  wife  and  share  it  with  the   in-­‐laws  on  Facebook.  Wondering  where  the  guys  went  after  the  game?  Search  for  their  check-­‐ ins.  Want  to  rave  about  the  latest  hipster  fashions  roaming  the  streets  of  Williamsburg?  Take  a   video  and  post  it  on  YouTube,  while  waiting  for  your  next  sampler  pack  of  new  products  to   review  on  Influenster.  Where  you  are  and  who  you  are  come  together  on  the  mobile  device— but  how  much  of  Pinterest,  YouTube  or  Twitter  is  mobile?  The  capability  of  the  consumer   (again,  always  remembering  to  include  the  B2B  end  customer)  to  use  their  mobile  device  to   generate  and  share  marketing  relevant  content  anywhere,  anytime,  must  therefore  be  factored   into  what  we  mean  by  mobile  marketing’s  economic  impact.     Mobile’s  Marketing  Value  Proposition:  Mobility,  Portability,  Individuality,  Personality   Mobile  is  often  said  to  be  uniquely  attractive  to  marketers  because  of  its  “always  present,   always  on,  always  connected”  nature,  an  attribute  said  to  offer  unrivalled  opportunities  for   ubiquitous  1:1  personalized  communications.  On  reflection  we  realized  this  phrase  conflated   several  distinct  aspects  of  how  mobile  devices  are  redefining  the  marketing  relationship,   features  that  may  work  simultaneously  and  synergistically  with  each  other,  but  are  worth   distinguishing  to  define  what  mobile  is,  in  order  to  calibrate  its  impact  correctly.       The  first  is  mobile’s  mobility,  which  we  define  as  the  device’s  ability  to  roam  geographically   while  remaining  connected  to  its  networks.  Mobility  depends  as  much,  if  not  more,  on  the   provision  of  network  access  than  it  does  on  the  devices  themselves,  though  the  latter  can  be  an   important  consideration  for  consumers  who  may  decide  what  type  or  amount  of  network   access  they  are  willing  to  pay  for.  Many  customers  of  the  first  wave  of  iPads,  for  example,   elected  not  to  buy  a  wireless  subscription  for  their  devices,  which  limited  their  “mobility”  (our   sense)  to  Wi-­‐Fi  hotspots,  even  though  they  were  completely  portable.  Mobility  also  includes  a   device’s  ability  to  interact  with  its  immediate  context  using  its  non-­‐networked  connective   technologies  media,  e.g.,  by  scanning  a  QR  code  displayed  on  a  shelf  tag  inside  a  store,  or  NFC   to  tap  an  “N-­‐Mark”  contained  in  an  electronic  billboard  in  an  airport.    
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  The  second  important  aspect  of  mobile  media’s  value  proposition  refers  to  portability.   Portability  is  the  propensity  of  a  consumer  to  keep  a  medium  or  device  on  their  person  at  all   times,  and  to  engage  with  it,  even  as  they  move  from  place  to  place  and  from  activity  to   activity.  It  is  often  said  mobile  devices  are  the  one  thing  people  always  have  with  them—and   compared  with  other  devices  this  probably  a  good  rule  of  thumb.  But  how  much  engagement   mobile  audiences  have  with  their  devices  throughout  the  day,  and  with  what  specific  content  or   for  what  purposes  depends  on  many  contextual  and  circumstantial  variables,  and  the  exact   amount  of  time  spent  matters  for  comparing  mobile’s  “share  of  mind”  with  that  of  other   media.  And  this  should  be  researched,  not  merely  asserted.     Individuality  for  us  means  the  capacity  for  communications  exchanged  via  the  device  or  any   particular  media  therein  to  reach  a  unique  individual,  only  that  unique  individual,  and  the   whole  of  that  unique  individual.    It  is  closely  dependent  on  the  individual  level  addressability  of   different  media  (SMS  is,  the  web  less  so);  and  the  exclusivity  of  device  or  media  by  the  end-­‐ consumer  (i.e.  do  they  have  multiple  devices  or  not;  do  they  share  this  device  or  not.)     Personality,  finally,  refers  to  the  ability  of  particular  mobile  media  and  device  hardware  to   support  the  creation,  uploading,  sharing,  receiving,  and  downloading  of  personally  created  or   customized  content.    It  is  closely  connected  to  the  openness  or  customizable  quality  of  the   device  or  operating  system,  and  the  ability  of  the  media  to  support  interactive,  two-­‐way   communications:    In  other  words  -­‐  how  much  scope  does  the  device  allow  the  consumer  to   make  it  their  own,  or  to  become  their  own  publisher?   Mobile’s  Impact  on  Categories  of  Marketing  Activity   The  mobile  value  proposition  analyzed  above—mobility,  portability,  personality,  individuality— necessarily  required  us  to  update  traditional  categories  of  marketing  activity  so  we  could  clearly   recognize  the  different  types  of  expenditure  and  sales  impacts  arising  in  these  quite  distinct   marketing  communications  environments.       • Mobile  Media  Advertising:  The  most  obvious  and  traditional  of  our  categories,  it   involves  the  (paid)  placement  of  marketing  communications  within  third-­‐party   published  content  transmitted  directly  onto  the  mobile  device.  It  may  be  purchased  on  a   scale  of  audience  basis  (cost-­‐per-­‐thousand  views  or  impressions)  or  it  may  be  purchased   on  a  performance  basis,  such  as  pay-­‐per-­‐click.  While  this  category  is  normally  fairly   clear-­‐cut,  it  does  include  such  ambiguous  activities  such  as  paying  for  “sponsored   stories”  in  social  media.       • Mobile  Direct  Response  or  Enhanced  Advertising  in  Non-­‐Mobile  Media.  As  discussed   below,  today’s  smart  devices  have  the  potential  to  integrate  with  virtually  any  other   medium,  object  or  context.  This  means  first,  that  mobile  has  an  important  role  as  a   conduit  for  responding  to  direct-­‐response  calls  to  action  placed  in  non-­‐mobile  media.   This  may  involve  calling  an  800  number,  or  texting  to  a  short  code,  etc.  to  receive  an  
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  •

offer  from  a  marketer,  or  to  opt-­‐in  to  receive  SMS  alerts,  or  icons  prompting  the   consumer  to  follow  the  brand  on  Twitter  or  some  other  mobile-­‐social  media.  But  not  all   mobile-­‐enhanced  interactions  with  non-­‐mobile  media  involve  “direct  response”  in  the   classic  sense  of  a  message  returned  to  the  marketer.  The  interaction  may  involve   supplemental  communications  delivered  to  the  device  with  no  further  expectation  of   response  (e.g.,  many  QR  codes  simply  convey  additional  product  information  when   scanned).  Importantly,  the  versatility  of  mobile  enhancement  technologies  is  such  that   the  range  of  advertising  media  had  to  be  expanded  to  include  things  like  packaging,   which  traditionally  was  not  considered  an  ad  medium.   Mobile  Content  and  Relationship  Marketing  (mCRM).  In  contrast  to  the  above  two   “bought”  media  advertising  categories,  this  activity  includes  any  communications   transmitted  to  or  from  the  mobile  device  that  is  “owned”  by  the  marketer  or  “earned”   by  them  as  a  result  of  user-­‐generated  content  or  viral  sharing  on  mobile  devices.  Thus,   owned  media  would  include  the  marketer’s  content  on  its  mobile  websites  (in  fact,  all  of   what  is  now  being  called  “content  marketing”  finds  its  way  into  this  category  so  long  as   it  is  accessible  via  mobile  devices)  or  on-­‐going  communications  the  marketer  sends  to   customers  who  have  opted-­‐in  to  receive  SMS  alerts,  or  who  “follow”  (subscribe  to)  its   communications  on  a  social  media  site,  or  use  a  downloaded  branded  mobile  app  utility,   (e.g.,  to  compare  prices,  get  recommendations,  place  orders  for  home  delivery,  etc.)     Mobile  earned  media  includes  marketing  communications  pertaining  to  a  particular   company,  product  or  service  that  are  created  or  distributed  by  end-­‐customers  or  by   third-­‐parties  (such  as  bloggers  or  journalists)  via  mobile  devices  or  media.  Such  media  is   “earned”  because  strictly  speaking,  the  marketing  communications  is  not  sponsored  by   the  marketers  themselves.  Examples  would  include  consumer-­‐filmed  short  videos  of  a   friend  enjoying  a  product  which  gets  posted  to  mobile-­‐accessible  social  media,  virally   forwarded  links  in  mobile  messaging,  “tweets”  about  products  advertised  on  TV,   product  reviews  and  recommendations,  or  consumer  “likes”  of  brand  pages  on  social   media—all  to  the  extent  they  are  accessed  by  end-­‐customers  via  qualifying  mobile   devices.    

 

Types  of  Qualifying  Mobile  Devices  
What  then  is  a  qualifying  mobile  device?  Here  we  list  the  principal  categories  of  electronic   devices  that  our  report  defines  as  “mobile”  for  the  purposes  of  measuring  the  size  and  impact   of  the  mobile  marketing  ecosystem.  This  categorization  shapes  our  efforts  to  interpret  historical   data  on  mobile  marketing  and  forecast  future  developments,  because  so  much  of  the   expenditure  opportunity  and  sales  impact  of  mobile  marketing  depends  on  the  adoption  and   usage  rates  in  the  US  population  of  successive  generations  of  mobile  devices  with  increasing   power  and  utility  for  transmitting  mobile  content  and  marketing  communications.       Our  four  major  device  categories  and  some  of  their  distinguishing  attributes:  
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  Basic  or  “Entry-­‐level”  Phones     ♦ No  screen   ♦ Simple  123/ABC  “telephone”  keypad   ♦ Support  cellular  voice  calls  only   ♦ Note:  these  devices  have  almost  disappeared  from  the  market;  the  few  remaining   may  have  some  marginal  impact  on  calls  to  800-­‐numbers     Feature  Phones     ♦ A  twelve-­‐button  ABC/123  keypad   ♦ A  small  postage-­‐stamp  screen     ♦ Support  cellular  voice;  texting  (SMS  and  MMS);     ♦ Limited  access  to  data  /  messaging,  usually  at  2G  or  2.5G  speeds   ♦ Limited  ability  to  display  certain  simple  mobile  websites  (WAP),  usually  via  the  mobile   carrier’s  “portal”   ♦ Can  download  limited  digital  content,  such  as  ringtones,  screensavers,  wallpaper,  and   games   ♦ A  low  resolution  digital  camera       Smartphones8   ♦ Network  accessibility  includes  cellular  voice,  texting,  data,  and  Wi-­‐Fi   ♦ Cellular  voice,  text,  and  broad-­‐band  data  at  3G  speeds  or  faster   ♦ Nearly  full  access  to  the  Internet  via  web  browsers   ♦ GPS,  Wi-­‐Fi,  and  Bluetooth   ♦ Large  screen  displays,  usually  touch,  pinch,  spread,  and  swipe  sensitive   ♦ A  full  Qwerty  keyboard,  whether  built  into  the  hardware  as  buttons,  or  via   touchscreen   ♦ The  ability  to  download  apps  from  an  “app  store”  that  deliver  rich  content  and   enhance  device  functionality   ♦ Front-­‐  and  back-­‐facing  cameras  for  good  quality  still  and  motion  photography   ♦ A  multitude  of  additional  passive  sensors,  including  motion  sensors  such  as   accelerometers,  gyroscopes,  etc.   ♦ Fully  supported  music  and  video  content   ♦ Some  most  recent  models  include  voice  recognition,  pre-­‐installed  smart  code   readers,  and  NFC       Tablets  (including  Mini  Tablets  and  E-­‐Readers)                Mostly  similar  to  smartphones,  except:   ♦ Significantly  larger  screen  format  and  lacking  cellular  voice;                                                                                                                
8

 This  includes  advanced  email  readers  such  as  BlackBerrys,  networked  MP3  players,  such  as  the  iPod  “Touch,”  and   certain  advanced  digital  assistants  made  by  Palm  and  others,  to  the  extent  they  have  more  or  less  complete   Internet  access.     20  

  Below  is  a  list  of  devices  that  our  report  does  not  include  under  the  definition  of  “mobile.”     • Desktops,  Laptops,  Netbooks:  These  are  not  included  as  mobile  device  for  our   purposes,  since  most  do  not  meet  our  test  of  mobile  network  locatability  and   awareness.  Nor  do  we  include  laptops  or  netbooks  “tethered”  to  mobile  device’s   network,  though  we  recognize  a  case  could  be  made  for  doing  so.     • Game  Players  and  Consoles:  While  many  of  these  devices  are  responsible  for  a  large   volume  of  sales  of  digital,  downloaded  game  content,  we  felt  that  they  do  not  meet   the  test  of  location  mobility.       • Smart  Automobiles:  Many  US  automobiles  are  now  networked  in  a  variety  of  ways,   particularly  via  GPS  devices,  “OnStar”  type  driver  assistance  platforms,  satellite  radio,   etc.,  many  of  which  can  be  updated  remotely  (thus  enabling  a  kind  of  mobile   publishing).  In  addition,  many  late-­‐model  automobiles,  especially  at  the  high  end  of   the  market,  are  now  including  more  sophisticated  Internet-­‐capable  devices  that   remain  networked  as  the  car  moves,  thus  meeting  our  “mobility  test.”  However,   because  these  devices  stay  with  the  vehicle,  not  the  driver,  we  exclude  these  devices   for  failing  our  study’s  personal  portability  criteria.     • Smart  Homes:  Similar  to  the  case  of  smart  vehicles,  the  future  suggests  growth  in   smart  homes.  To  the  extent  that  mobile  devices  are  capable  of  access  information   from  a  smart  home  (e.g.,  a  smart  refrigerator,  freezer,  or  pantry)  to  determine  which   items  need  to  be  restocked,  and  use  that  information  as  the  basis  for  a  marketing   relevant  communication,  such  as  in  a  shopping  list  app,  we  consider  the  marketing   communication  to  be  on-­‐device,  and  therefore  mobile.  But  exchanges  of  information   between  the  static  location  of  the  smart  home  and  another  static  location,  such  as  a   retail  outlet  or  an  appliance  manufacturer,  would  fail  our  tests  of  mobility  and   portability.       • Mobile  Apparel  (watches,  glasses,  wristbands,  etc.).  Clearly,  many  wearable  items  are   now  being  designed  to  access  mobile  networks  of  one  kind  or  another,  and  thus  meet   the  criteria  of  mobility  and  portability  as  our  study  defines  them.  We  exclude  these   devices  only  because  they  are  too  new  and  too  few  to  be  measurable.  We  expect  this   situation  will  change  very  rapidly,  and  that  future  iterations  of  this  study  would  need   to  take  them  into  consideration.  

A  mobile  data  subscription  is  often  not  automatically  bundled  with  a  tablet  purchase,   meaning  many  tablets  are  Wi-­‐Fi-­‐only    

 

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Drilling  Down:  Individual  Mobile  Media  and  Connections  
As  noted  above,  “mobile”  is  not  a  single  media  but  a  diverse  range  of  networks,  connective   technologies  and  sensory  capabilities  (such  as  accelerometers  and  gyrsoscopes)  that  may  be   found  on  the  devices  indicated  above.  To  the  extent  they  enable  or  enhance  other,  non-­‐mobile   media  or  contexts,  they  transform  those  media  into  “mobile  enhanced”  media,  at  least  in  part.   These  considerations  oblige  us  to  clarify  the  features  and  uses  of  these  distinct  components  of   the  mobile  marketing  media  landscape,  since  the  technologies  involved  often  create  very   distinct  opportunities  for,  and  constraints  on,  how  consumers,  publishers,  and  ultimately   marketers  can  use  them,  and  thus  generate  the  economic  impacts  we  seek  to  measure.  Thus,   the  following  is  an  all-­‐too-­‐brief  overview  of  some  of  these  defining  attributes  of  the  major   mobile  marketing  media.     Mobile  Voice   Mobile  voice—the  original  mobile  medium—refers  to  the  use  of  cellular  networks  to   communicate  the  spoken  word,  usually  between  two  devices,  i.e.,  peer-­‐to-­‐peer  (P2P)   conversations.9       The  use  of  mobile  voice  for  marketing  purposes  is  extremely  limited,  since  under  US  law   outbound  telemarketing  to  cell  phone  numbers  is  prohibited  except  under  extremely  limited   circumstances.  Mobile  voice  expenditure  within  this  study  is  therefore  included  only  insofar  as   a  portion  of  advertising  in  other  media  stimulates  inbound,  consumer-­‐initiated  calls  to  a  call   center,  or  prompts  consumers  to  place  inquiries  or  orders  via  automated  interactive  voice   response  (IVR).  For  mobile  voice,  then,  the  economic  impact  consists  of  the  estimated  value  of   the  orders  received  from  mobile  voice  calls,  regardless  of  whether  placed  with  a  live  person  or   with  an  automated,  menu-­‐driven  service.     Mobile  Messages:  SMS,  MMS,  and  Instant  Messages  (IM)   SMS,  or  short  message  service  (due  to  the  format’s  160  character  maximum),  was  the  first   mobile-­‐native  technology  to  be  used  for  marketing  purposes.  The  message  network,  like  the   voice  network,  is  addressable  via  a  unique  cell  phone  number  either  associated  with  a  SIM  card   or  hardwired  into  a  mobile  device.       The  sending  of  bulk  unsolicited  text  messages,  i.e.,  spam,  is  prohibited  under  US  law,  though   sending  of  bulk  messages  on  an  opted-­‐in  express  consent  basis  (A2P  messaging)  is  permitted.10   Access  to  cellular  networks  for  sending  opt-­‐in,  A2P  messaging  is  itself  tightly  regulated  by  US   carriers  and  industry  associations.  Use  of  short  codes—a  five-­‐  or  six-­‐digit  number  that  can  be                                                                                                              
9 10

 Currently,  we  classify  VoiP  (i.e.,  internet-­‐based  voice  services,  such  as  Skype)  as  part  of  mobile  apps.    The  sending  of  text  messages  is  not  free  anywhere,  but  the  US  differs  from  other  markets  in  that  recipients  are   also  charged  when  they  receive  texts.  Consumers  may  be  billed  on  a  per-­‐text  basis  or  may  buy  “all  you  can  eat”   messaging  plans.  This  cost  consideration  may  be  a  disincentive  for  some  consumers  who  might  otherwise  opt-­‐in  to   participate  in  CRM  marketing  programs  or  subscribe  to  branded  content.     22  

displayed  in  non-­‐mobile  media—are  used  to  facilitate  direct  response  or  ongoing   communications,  and  the  marketing  communications  plans  that  use  them  require  preapproval   by  mobile  carriers  and  industry  associations.     Because  of  messaging’s  individual-­‐level  addressability,  it  is  a  natural  vehicle  for  opt-­‐in,   subscription-­‐based  publishing  (in  which  a  tiny  amount  of  space  can  be  available  for  third-­‐party   advertising).  It  also  supports  direct  one-­‐to-­‐one  marketing  relationship  communications   between  marketers  and  opted  in  customers.  Texting  is  also  easily  incorporated  with  non-­‐mobile   media  for  direct  response  campaigns.  SMS  may  also  be  used  to  market  and  distribute   downloadable  and  other  premium  content,  such  as  ringtones,  a  feature  known  as  Premium   SMS  (PSMS).  PSMS  is  charged  to  subscribers’  phone  bills  or  a  prepaid  account.     MMS,  or  multimedia  message  service,  is  sometimes  referred  to  as  picture  or  video  messaging   to  help  differentiate  it  from  SMS.  MMS  is  delivered  almost  the  same  way  as  SMS,  but  can   include  multimedia  attachments  such  as  images,  audio,  video,  and  rich  text,  often  in  a  slide-­‐ show  format.       Instant  messaging  takes  place  via  the  Internet,  and  therefore  technically  is  a  different  medium.   It  is  primarily  embedded  in  websites,  proprietary  device  operating  systems,  or  within  certain   social  media.  Though  there  are  recent  indications  that  IM  may  be  replacing  texting  among  some   audiences,  its  role  in  mobile  marketing  is  too  nascent  to  be  included  in  this  study.     Mobile  E-­‐Mail   While  its  origins  predate  the  mobile  phone,  email  is  now  an  important  part  of  the  mobile   marketing  landscape.     An  e-­‐mail  message  can  be  transmitted  to  or  from  any  standard  data  network,  whether  landline   or  Wi-­‐Fi,  or  through  a  mobile  carrier  network.  E-­‐mail  can  be  an  effective  means  of  delivering   messages  to  a  smartphone,  a  data-­‐enabled  mobile  device  (such  as  a  tablet),  or  a  dedicated  e-­‐ mail  device  (such  as  a  BlackBerry).  Any  meaningful  difference  in  addressability  between  mobile   and  non-­‐mobile  e-­‐mail  lies  in  the  metadata  that  the  device  appends  in  the  header  to  the  e-­‐mail   transmission,  thus  enabling  a  response  to  be  identified  as  coming  from  a  mobile  device.  And,   like  its  PC-­‐based  original,  the  bulk  sending  of  unsolicited  commercial  email  (spam)  is  prohibited   except  under  certain  limited  exceptions.       As  an  opt-­‐in  marketing  medium,  mobile  e-­‐mail  offers  all  the  possibilities  of  conventional  email,   such  as  direct  response  and  opted-­‐in  CRM  “owned  media”  communications,  such  as   newsletters.  But  it  also  offers  the  great  advantage  that  the  customer  or  prospect  often  has  the   device  on  her  person,  allowing  for  the  potential  of  a  more  immediate  impression  or  response  in   many  more  contexts.  In  addition,  mobile  email  intended  for  a  smartphone  or  tablet  can  include   links  that  enable  the  recipient  to  leverage  features  unique  to  the  mobile  device,  download  the   marketer’s  mobile  app,  or  “click  to  call”  features  embedded  in  the  email.    
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For  purposes  of  calculating  mobile  email’s  sales  impact,  we  look  at  “mobile-­‐accessed  marketing   e-­‐mail”  i.e.,  all  e-­‐mail  containing  marketing  communications  that  are  accessed  and  read  on   qualifying  mobile  devices  by  end-­‐customers.  For  our  expenditure  calculations,  we  measure   “mobile-­‐optimized  marketing  e-­‐mail”  as  those  marketing  communications  marketers   intentionally  send  to  and  design  for  the  form  factors  of  mobile  devices  as  distinguished  from   those  of  the  fixed-­‐line  e-­‐mail  environment.     Mobile  Web   As  in  the  traditional  PC-­‐based  Internet,  the  Web  refers  to  digital  content  that  has  been  created   using  specially  designed  computer  code  for  display  via  a  browser,  and  which  the  browser  pulls   from  the  host  by  using  a  Universal  Record  Locator,  or  URL.       In  mobile,  the  power  and  utility  of  the  web  depends  on  the  device.  Basic  phones  have  no  web   access  at  all.  Feature  phones  can  only  access  limited  function  sites  that  have  been  specifically   created  for  them,  usually  so-­‐called  WAP  sites.       However,  mobile  marketing  in  the  U.S.  really  achieved  “lift-­‐off”  in  2007  when  Apple  introduced   the  iPhone,  the  first  truly  popular  smartphone.    The  iPhone’s  HTML  compatible  browser  and   touch-­‐screen  (spreading,  swiping,  pinching,  and  tapping)  permitted  more  or  less  unrestricted   access  to  PC-­‐based  web  content,  but  with  some  key  limitations  for  marketers:  the  iPhone  did   not  support  Adobe’s  JavaScript,  the  programming  language  in  which  much  online  advertising   was  displayed,  nor  did  the  iPhone  accept  third-­‐party  cookies  (the  workhorse  used  for  online   advertising  measurement  and  targeting)  and  some  video  formats.    The  upshot  was  smartphone   browsers  gave  access  to  lots  of  great  content,  but  stripped  out  the  means  to  pay  for  it.    When   mobile’s  share  of  web  traffic  was  tiny,  this  could  perhaps  be  overlooked.  Today,  with  tablets   and  smartphones  often  the  “first  screen”  for  many  consumers,  publishers  and  marketers  are   greatly  concerned  about  “optimizing”  their  sites  for  mobile  advertising,  such  as  by  using   alternative  coding  and  design  strategies,  adopting  HTML5,  etc.           But  even  when  the  advertising  is  not  optimized  for  mobile  devices,  underlying  mobile  Web   content  offers  the  content-­‐marketing  possibilities  of  the  Internet  but  again,  as  in  the  case  of   mobile  e-­‐mail,  enhanced  with  the  immediacy  presented  by  a  device  that  is  often  on  the   consumer’s  person  in  specific  contexts.    Likewise,  it  also  offers  the  possibility  of  “upgrading”  the   relationship  by  convincing  the  user  to  download  an  app  and  take  advantage  of  the  device’s  full   hardware  capabilities.     Mobile  Applications  –  “Apps”   Applications  are  specialized  software  programs  specifically  designed  to  increase  the   functionality  of  mobile  device  hardware  or  software.  They  may  be  pre-­‐installed  by  the  device   manufacturer  or  more  often  they  may  be  wirelessly  downloaded  and  installed  on  the  device  by   the  user.  Apps  are  primarily  a  creature  of  smartphones  and  tablets,  though  there  are  some   apps  that  feature-­‐phone  users  can  access  and  install.  Depending  on  their  size  and  type,  apps  
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may  support  a  wide  range  of  content,  from  games  to  rich-­‐media  imagery  to  video  and  much   more.         There  are  two  basic  types  of  smartphone  and  tablet  apps:  “Browser”  apps  are  designed  to  be   accessed  by  and  reside  in  the  major  browsers  on  the  mobile  handset  (Safari,  Chrome,  Firefox,   etc.)  and  add  functionality  or  content  when  the  user  is  browsing  the  mobile  web.  They  are  most   commonly  used  to  create  games,  or  other  “published”  content  in  a  highly  scalable  way  so  that   any  user  can  access  them.  “Native”  apps  are  designed  to  be  installed  directly  on  the  device   itself,  and  so  must  be  specifically  designed  for  each  hardware  operating  system  (iOS,  Android,   etc.)  Operating  system  fragmentation  and  the  need  for  consumer  discovery  and  download  can   make  developing  native  apps  less  efficient.  Their  attraction,  however,  lies  in  their  power  to   leverage  the  full  range  of  the  device’s  underlying  hardware,  such  as  the  camera,  its   microphone,  its  GPS  sensors,  its  accelerometers,  etc.  Native  apps  can  also  be  designed  to  access   other  software  installed  on  the  device,  such  as  address  books,  music  playlists,  etc.       With  the  potential  to  access  so  much  additional  functionality,  mobile  apps,  especially  in  their   native  configuration,  greatly  expand  the  scope  of  communications  opportunities  offered  to   marketers.  By  downloading  and  using  an  app,  customers  are  not  just  visiting  a  site  momentarily   but  are  opening  up  a  direct  conduit  with  a  publisher  or  granting  a  marketer  a  certain  presence   on  a  device  that  a  user  will  carry  with  them  throughout  the  day.  While  much  of  this  is  possible   with  web  apps,  the  native  app  offers  the  possibility  of  a  far  richer  mobile  experience  for  the   customer  since  it  is  created  specifically  for  it.  The  possibilities  for  one-­‐to-­‐one  communications   are  thus  greater  through  apps  than  through  the  web.    In  particular,  the  use  of  notifications  and   alerts  within  the  app  means  that  the  app  can  become  an  ongoing  channel  of  two-­‐way   communication  in  which  publishers  can  offer  highly  creative  rich-­‐media  advertising   opportunities,  or  sell  virtual  goods  (e.g.,  within  games).       The  possibilities  of  apps  would  appear  to  be  limited  by  little  more  than  marketers’  creativity.  A   brief  visit  to  Apple’s  iTunes  App  Store  or  Google’s  Play  will  quickly  find  a  wide  variety  of   marketer-­‐branded,  marketer-­‐sponsored  apps  across  virtually  every  sector  of  the  economy.  A   few  of  the  most  interesting  features  of  the  app  for  marketers  are  the  ability  to  push   notifications  to  users,  providing  reminders,  updates,  coupons,  account  information,  and  other   useful  information.  Location  data’s  usefulness  also  serves  marketers  in  two  ways,  allowing   marketers  to  help  customers  find  them  at  physical  store  locations,  or  allowing  marketers  to   know  where  users  are,  with  permission,  so  that  they  can  customize  a  shopping  experience,   provide  offers  or  special  options,  and  more.       Apps  also  allow  users  to  initiate  contact  and  provide  their  own  content,  such  as  through   submitting  photos.  They  even  provide  the  possibility  for  users  to  connect  and  interact  with  one   another  through  a  user  community.  

 

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Mobile  Proximity  Media   Mobile  proximity  media  refers  to  limited-­‐range  communications  technologies  that  operate   independently  of  cellular  or  Wi-­‐Fi  data  networks.  Each  employs  its  own  radio  spectrum  that   enables  smart  mobile  devices  to  identify  or  communicate  with  other  mobile  (and  other)  devices   within  narrow  geographic  parameters.  Proximity  media  include:  NFC  (near  field   communication),  Bluetooth,  and  RFID  (radio-­‐frequency  identification).       Because  these  media  are  still  in  early  stages  of  adoption  and  experimentation  among   consumers  and  marketers  alike,  we  treat  them  as  one  category.  Of  these,  NFC  appears  to  be   poised  for  a  significant  breakthrough,  though  Bluetooth  marketing  appears  to  have  significant   pockets  of  use  also.       NFC’s  uses  include  contactless  payments,  interactivity  with  advertising  in  non-­‐mobile  media,   and  customer  access—e.g.,  an  NFC-­‐enabled  phone  can  simply  tap  a  reader  on  a  turnstile  and   open  the  door  to  an  office  or  other  secure  location.  NFC-­‐enabled  phone  can  tap  an  “N-­‐Mark”   on  printed  media  and  posters  to  display  additional  information  or  download  detailed  event   information,  and  two  individual  with  NFC-­‐enabled  phones  can  share  large  volumes  of  data   instantaneously  by  touching  their  phones  together;  and  perhaps  most  significantly,  NFC  devices   enable  secure  in-­‐person,  tap-­‐and-­‐go  mobile  payments.       Recognition:  Scanning  and  Augmented  Reality   Recognition  technology  involve  sensory  inputs  received  by  the  mobile  device  hardware,  such  as   via  the  camera  or  microphone,  which  are  rendering  into  marketing  relevant  communications,   often  via  accessing  additional  information  over  the  Internet.  The  main  examples  of  recognition   media  are  smart  barcode  scanning,  audio  scanning,  and  augmented  reality.       Recognition  enables  a  consumer  to  use  a  mobile  device  to  digitally  interact  with  his  or  her   immediate  physical  surroundings.  The  two  principal  pieces  of  hardware  involved  are  a  digital   camera  and  a  microphone.  The  camera  can  not  only  scan  2-­‐D  “smart”  bar  codes,  which  in  turn   launch  Web  sites  or  apps,  it  can  also  overlay  digital  information  about  what  it  “sees”  in  the   camera  viewfinder,  augmenting  the  captured  image.  The  microphone  can  supplement  visual   information  by  detecting,  identifying,  and  responding  to  audio  inputs  it  “hears”  from  a  nearby   radio,  TV,  or  other  source  of  sound,  such  as  a  song  or  advertising  message.       Smart  2-­‐D  bar  codes,  sometimes  generically  called  QR  codes  even  though  that  is  but  one  of   several  smartcode  technologies,  can  store  information  and  be  read  via  a  mobile  phone  for  quick   access  to  stored  content,  such  as  a  URL,  image,  or  address.  The  code  can  also  be  displayed  on   the  device  itself  and  read  by  a  piece  of  peripheral  equipment  so  that  the  consumer  can  use  the   code  as  a  ticket  or  coupon.  These  codes  are  easily  incorporated  into  many  traditional  and   nontraditional  media,  such  as  magazines,  signs,  buses,  business  cards,  T-­‐shirts,  coffee  mugs,   product  packaging,  or  just  about  any  object  that  consumers  might  encounter  in  daily  life.  A   camera-­‐equipped  smartphone  with  the  correct  reader  application  can  scan  the  QR  code  and  
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display  text,  images  or  video,  connect  to  a  wireless  network,  or  open  a  Web  page  in  the  phone’s   browser.  This  act  of  linking  from  physical-­‐world  objects  creates  a  kind  of  real-­‐world  hyperlink,   sometimes  called  a  hardlink.       The  most  common  use  of  smart  bar  codes  is  to  provide  supplemental  information,  services,  or   content  through  a  Web  site  or  app  download.  The  content  can  provide  details  of  a  promotion,  a   discount  voucher,  the  activation  of  a  download  (such  as  a  ringtone,  song,  or  game),  or  even  a   telephone  connection  to  an  IVR  or  human  agent.  Smart  bar  codes  are  free  to  the  consumer  and   often  free  to  the  marketer.  But  the  marketer  typically  pays  for  the  metrics  that  measure  a  bar-­‐ code  campaign’s  effectiveness,  as  well  as  network  usage  charges  based  on  consumer   engagement  or  response,  usually  on  a  per-­‐click,  per-­‐download,  per-­‐view,  per-­‐redemption,  per-­‐ sale,  or  per-­‐call  basis.       Augmented  reality  is  a  technique  that  allows  users  of  a  mobile  device  to  view  their  physical   (real-­‐world)  environment  with  certain  of  its  elements  “augmented”  by  virtual,  computer-­‐ generated  information  or  imagery.  AR  happens  in  real  time.  It  can  be  used  to  identify  the   names  of  retail  stores,  provide  historical  information  about  a  park  monument,  or  supply  sports   scores  for  a  game  broadcast  on  TV,  among  many  other  uses.  If  a  user  views  a  print   advertisement  through  an  augmented  reality  application  on  a  mobile  device,  the  device  will   show  an  interactive  portrait  of  that  advertisement,  with  things  like  3-­‐D  imagery,  video,  and   other  highly  interactive  content.  Augmented  reality  requires  a  smart  mobile  device  with  data   access  and  a  digital  camera  and  a  preinstalled  or  downloaded  augmented  reality  mobile   application.        

 

 

 

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Expenditure  on  Mobile  Marketing  Communications   and  Related  Services  
Having  defined  what  today’s  mobile  marketing  ecosystem  looked  like,  we  set  out  on  the  more   quantitative  tasks.    To  establish  the  economic  impact  of  mobile  marketing—whether  in  terms  of   its  contribution  to  US  sales  output  or  to  increased  employment—  our  first  step  was  to   determine  its  input:  the  amount  marketers  across  all  industries  in  the  US  were  spending  on   mobile  marketing  communications  and  mobile-­‐related  marketing  services.11         What  follows  are  the  expenditure  totals  we  found,  together  with  some  of  the  key   developments  in  the  ecosystem  that  help  understand  their  underlying  trends  and  significance.     For  2012,  we  estimate  that  across  all  mobile  and  mobile-­‐enhanced  non-­‐digital  media,   marketers  and  retailers  spent  a  total  of  $6.7  billion  on  mobile  marketing  communications,  a   figure  we  expect  to  rise  to  $19.8  billion  in  2015.      
Table  5:  U.S.  Expenditure  on  Mobile  Marketing  and  Advertising   Mobile  Mktg  Invest                          $  Millions     Total  Mobile  Mktg  Expenditure   Mobile  Ad  Expenditure   Mobile  DR  Expenditure   Mobile  CRM  Expenditure   Source:  mLightenment   2010   2,405   991   166   1,248   2011   3,957   1,743   336   1,878   2012   2013   2014   2015   CAGR   52.5%   56.2%   77.4%   43.8%  

6,693   10,456   15,162   19,806   3,060   4,871   7,078   9,207   669   1,312   2,174   2,912   2,964   4,273   5,910   7,686  

  In  addition  to  “core”  expenditures  on  mobile  marketing  communications,  we  examined   industries’  mobile  marketing  related  expenditures  in  marketing  services  (such  as  agency  or  PR   fees,  audience  research  fees,  etc.)  together  with  supplemental  internal  support  costs  (such  as   staff  training,  systems  overhauls,  etc.)  that  marketers  and  retailers  may  incur  as  a  result  of  their   mobile  marketing  activities.  As  shown  below,  these  expenditures  amounted  to  an  additional   $3.9  billion  in  2012,  and  this  will  likely  rise  to  $10.5  billion  by  the  year  2015.    
Table  6:  U.S.  Expenditure  on  Mobile  Marketing  and  Advertising,  plus  Related  Expenditures    $  Millions   Total  Mobile  Marketing   Expenditure   2010   3,703   2011   6,181   2012   10,563   2013   16,375   2014   23,412   2015   CAGR  

30,355   52.3%  

                                                                                                           
11

 To  clarify  the  difference  between  these  two  categories:    Mobile  marketing  communications  expenditures  in   table  1  are  the  base  used  to  calculate  the  ecosystem’s  sales  impact  (and  ultimately,  indirect  seller  employment   impacts);  while  expenditure  on  related  overhead  expenditures  as  displayed  in  table  2  are  added  to  the  sub-­‐total  of   marketing  communications  expenditures  to  arrive  at  the  “grand  total”  of  all  mobile  marketing  expenditures  that   are  used  to  calculated  direct  (advertiser)  employment.       28  

Mobile  Mktg  Communications     Other  Marketing  Services   Supplemental  Internal  Support   Source:  mLightenment  

2,405   1,130   168  

3,957   1,947   277  

6,693   3,401   468  

10,456   5,188   732  

15,162   7,188   1,061  

19,806   52.5%   9,163   52.0%   1,386   52.5%  

  In  the  following  pages  of  this  section,  we  compare  and  analyze  our  estimate  of  current  and   forecast  levels  of  mobile  marketing  expenditure  using  our  earlier  map  of  mobile  marketing.  We   also  identify  the  major  trends  that  explain  marketer  adoption  and  levels  of  expenditure  on   mobile  marketing  across  three  principal  categories:  mobile  advertising,  mobile-­‐enhanced  direct   response,  and  mobile  CRM,  or  permission-­‐based  marketing.     The  importance  of  this  review  of  mobile  marketing  expenditure  can  be  seen  by  putting  it  in  the   context  of  recent  forecasts  of  U.S.  advertising  expenditure.  To  take  but  one  example:    For   Zenith  Optimedia,  one  of  the  world’s  foremost  authorities  on  advertising  expenditure,  “mobile”   remains  all  too  buried  within  other  categories  like  Internet,  even  though  by  our  estimates   mobile’s  2013  expenditure  compares  with  more  established  media,  such  as  outdoor  or  cinema.          
Table  7  Projected  Growth  of  Non-­‐Mobile  Media  Expenditures   MEDIUM  OR  DISCIPLINE   Major  Media   TV   Radio   Magazine   Newspaper   Outdoor   Internet     Cinema   Marketing  Services   Direct  mail   Telemarketing   Sales  promotion   Public  relations   Event  sponsorship   Directories   Grand  Total  
12

2012   159,699   $60,990   16,718   18,062   24,975   7,589   30,639   725   208,438   50,442   51,397   68,063   3,885   25,755   8,896   368,137  

2013   165,774   $63,096   17,208   17,520   22,977   7,968   36,243   761   214,305   51,451   52,425   70,233   4,157   27,944   8,095   380,079  

%  CHG   3.8   3.5   2.9   -­‐3   -­‐8   5   18.3   5   2.8   2   2   3.2   7   8.5   -­‐9   3.2  

                                                                                                           
12

 Display,  Internet  video/rich  media,  classified,  paid  search,  Internet  radio,  podcast,  paid  social-­‐media  ads  and   mobile.  See  Methodology.     29  

Source:  Zenith  Optimedia  December  2012  Forecast13  

Mobile  as  a  Share  of  Overall  Marketing  Expenditure   Total  expenditure  is  driven  by  both  how  many  marketers  are  using  mobile—their  adoption   rate—and  the  percentage  of  budgets  that  adopters  allocate  to  it.      Significant  increases  in   adoption  of  mobile  techniques  were  found  by  our  own  primary  survey  work,  and  are  being   reported  across  most  third-­‐party  industry  surveys  we  looked  at.       For  example,  a  2012  StrongMail  survey  of  some  600  marketers  asked  about  current  usage  of   mobile  marketing  of  any  kind  and  found  that  45%  of  marketers  surveyed  were  employing  it  as   of  2012.14  Combining  responses  to  other  questions  about  how  long  users  had  been  utilizing  it,   and  how  soon  nonusers  were  likely  to  adopt  it,  we  derived  the  following  table  of  adoption  rates   by  marketers.    
Table  8:  Percent  of  US  Marketers  Employing  Mobile  Marketing  or  Advertising   Year   2009   2010   2011   2012   2013   2014   2015  

%  of  Marketers  Employing   6%   19%   33%   45%   53%   69%   86%   Mobile   Source:  Author  calculations  benchmarked  against  StrongMail  and  ChiefMarketer  survey  results  

  We  found  a  similar  pattern  regarding  mobile’s  share  of  marketing  budgets.    To  illustrate,  Chief   Marketer  magazine’s  annual  mobile  survey  indicated  roughly  4%  of  [digital]  marketing  budgets   went  to  mobile  marketing  in  2011.15    Its  2012  survey  indicated  that  this  amount  was  less  than   10%  of  the  marketing  budget.16  A  StrongMail  survey  estimates  that  mobile  represented  5.1%  of   digital  marketing  budgets  in  2012.17    
Table  9:  Weighted  Distribution  of  Mobile  Marketing  Activity   Advertising:                DR     CRM   Advertising   Search   LBS     QR,  etc.         11.3%   7.6%   4.3%     15.8%     23.2%         15.8%     61.0%  

                                                                                                           
13 14

 Publicis  Groupe's  Zenith  Optimedia,  Advertising  Expenditure  Forecasts,  June  2012,  www.zenithoptimedia.com.      StrongMail  Survey,  2012   15  Chief  Marketer,  “2011  Mobile  Marketing  Survey:  Many  Roads  to  Mobility.”     16  Chief  Marketer,  “2012  Mobile  Marketing  Survey:  Mobile  Goes  with  Everything.”     17  Strongmail  Survey,  2012.  How  share  of  marketing  budgets  translate  into  total  marketing  dollars  depends  on   what  the  survey  respondents  understood  by  “total  marketing  budgets,”  and  whether  this  can  be  projected  to  the   entire  population  of  US  marketers.     30  

    Push   7.7%         SMS   12.9%         Website   22.6%         Apps   17.7%      TOTAL         100%   Source:  Author  calculations  based  on  StrongMail  and  Chief  Marketer  Surveys,  2012.    

Expenditure  on  Advertising  In  Mobile  Media  
Mobile  advertising  is  the  largest  component  of  mobile  marketing  communications  in  2012  and   will  hold  this  position  through  2015.      
Table  10:  Top-­‐Line  Mobile  Media  Advertising  by  Media  Type    MEDIA  F                                                                          $   2010   Millions   Total   991   Mobile  Voice  Expenditure     20   Mobile  Messaging  Expenditure   235   Mobile  Web  Expenditure   629   Mobile  Email  Expenditure   6   Mobile  Apps  Expenditure   101   Mobile  Proximity  Expenditure   0   Mobile  Recognition  Expenditure   0   Source:  mLightenment   2011   1,743   35   266   1,168   12   263   0   0   2012   3,060   61   298   2,092   23   585   0   0   2013   4,871   97   313   3,157   37   1,266   0   0   2014   7,078   142   326   4,836   54   1,721   0   0   2015   9,207   184   328   5,370   66   3,260   0   0  

SMS     SMS-­‐based  advertising  helps  support  a  wide  variety  of  content  publishers  for  whom  SMS   content  delivery  is  particularly  well  suited.  Of  these,  the  most  famous  is  Twitter,  but  there  are   many  other  SMS-­‐reliant  content  providers,  whether  providing  news,  weather  alerts,  coupon   opportunities,  social  media  /  microblogging  sites,  etc.  Twitter  advertising,  however,  is   increasingly  app  based.        
Table  11:  SMS  Application-­‐to-­‐Person  (A2P)  Messaging  Estimate                          $  Billions    US   %  Publishers   $  Publishers   2010   $11.88   0.86   $10.22   2011   $12.96   0.85   $11.02   2012   $13.95   0.84   $11.72   2013   $14.85   0.83   $12.33   2014   $15.66   0.82   $12.84   2015   $16.38   0.81   $13.27   $3.11  

$  Marketers   $1.66   $1.94   $2.23   $2.52   $2.82   Source:  Author  estimates  based  on  Statista,  Juniper  Research  and  ABI  releases.  

 
  31  

Our  estimate  of  SMS  advertising  takes  as  its  base  the  value  of  SMS  publishing  expenditures  paid   to  platforms  providers,  as  estimated  above.      Occasionally,  third  party  research  estimates  the   value  of  SMS  advertising,  as  for  example,  in  October  2011,  eMarketer  estimated  that  SMS   advertising  represented  more  than  one-­‐third  (36.1%)  of  all  US  mobile  ad  spending  that  year.   Despite  a  significant  expansion  in  the  overall  market  for  mobile  advertising,  eMarketer  predicts   that  the  SMS  advertising  share  of  this  expanding  market  will  decline  to  14.4%  by  2015.18       Mobile  E-­‐mail   IAB’s  most  recent  study  reports  a  small  portion  of  Internet  advertising  dollars  is  allocated  to  e-­‐ mail  advertising—about  $156  million  in  2012,  down  27%  from  2011,  the  most  recent  year  for   which  complete-­‐year  estimates  are  available.19    
 

Table  12:  2012  Internet  Advertising  Revenue   $  Millions   2012  Internet  Ad  Revenue                                                    Total   $36,570   100%   Search     $16,932   46%   Display  /  Banner     $7,700   21%   Mobile     $3,400   9%   Classifieds     $2,400   7%   Digital  Video     $2,300   6%   Lead  Generation     $1,700   5%   Rich  Media     $1,100   3%   Sponsorship     $845   2%   Email     $156   1%   Source:  IAB  and  PwC,  “IAB  Internet  Advertising  Revenue  Report:  An  Industry  Survey  Conducted  by  PwC   and  Sponsored  by  the  Interactive  Advertising  Bureau  (IAB)  –  2012  Full  Year  Results,”  April  2013  

Mobile  Web     To  arrive  at  the  value  for  Mobile  Web  advertising,  we  estimated  an  aggregate  value  of  web-­‐ based  mobile  search,  display,  and  local  advertising.    We  then  benchmarked  these  estimates   against  third-­‐party  published  reports,  such  as  those  of  eMarketer,  Forrester,  IAB-­‐PWC,  Strategy   Analytics,  and  others.    Benchmarking  against  third-­‐party  data  was  often  tricky,  because  of   potentially  overlapping  or  discontinuous  categories  of  classification  are  used,  often  within  the                                                                                                              
18

 US  Mobile  Ad  Spending  to  Top  $1  Billion  for  First  Time  in  2011   Read  more  at  http://www.emarketer.com/newsroom/index.php/mobile-­‐ad-­‐spending-­‐top-­‐1-­‐billion-­‐time-­‐ 2011/#0eaO6c7wuZyuopRq.99   eMarketer,  October  4,  2011.  http://www.emarketer.com/newsroom/index.php/mobile-­‐ad-­‐spending-­‐top-­‐1-­‐billion-­‐ time-­‐2011/   19  The  IAB  PWC  report  began  to  report  mobile  as  a  separate  category  in  2012.  As  part  of  this  effort,  it  reclassified   some  2011  expenditures  previously  reported  as  part  of  other  categories  (such  as  display,  search,  etc.)  as  mobile;   however,  e-­‐mail  advertising  was  not  one  of  these.     32  

same  report,  as  with  “social”  and  “display.”    Nonetheless,  some  were  quite  helpful,  e.g.   Strategy  Analytics’  forecast  of  $556  million  in  US  mobile  Web  display  advertising  for  2012.20    
 

(Similarly,  BIA/Kelsey’s  study  on  location-­‐based  searches  helped  us  assess  how  much  is  being   spent  on  mobile  location-­‐based  searches,  both  web  and  non-­‐web.)    
 

Table  13:  Location-­‐Based  Search   Local  Search  Queries  (Billions)   2010   2011   2012   36.2   62.2     800   6,600   2013   52.7   69.5     1,600   7,500   2014   69.2   76.8     2,133   8,400   2015   85.9   84     2,733   9,300   Mobile   10.7   19.7   Desktop   47.6   54.9   Revenue  ($  Millions)     Mobile   200   400   Desktop   4,800   5,700   Source:  Author  calculations  based  on  BIA/Kelsey.  

Apps  (Search,  Display,  Video,  Other)   Surveys  from  developers  /  publishers  are  an  indicators  of  in-­‐app  advertising’s  importance.  A   2012  survey  of  mobile  app  developers  asserted  that  the  application  market  is  shifting  from  pay-­‐ to-­‐download  models  to  models  where  other  revenue  sources,  especially  advertising,  are   becoming  important  revenue  sources,  with  25  percent  of  phone-­‐app  developers  and  18  percent   of  tablet-­‐app  developers  choosing  to  incorporate  ads  within  their  applications.21       Strategy  Analytics  expected  in-­‐app  advertising  to  account  for  $1.2  billion  in  2012  revenues,   compared  with  just  $556  million  in  mobile  Web  display  advertising.22     We  believe  that  the  rapid  adoption  of  tablets  will  drive  mobile  video  consumption,  and  with  it   expenditure  on  mobile  device  video  consumption.  In  particular,  we  note  that  leading  cable  and   mobile  broadband  providers  are  developing  apps  and  integrations  responding  to  the  tablet   opportunity,  including  Xfinity  TV  by  Comcast,  Verizon  FiOS,  HBO  GO  apps,  which  are   increasingly  incorporating  advertising.23  

                                                                                                           
20

 Paul  Ausick,  “Mobile  Market  Spending  to  Reach  $150  Billion  in  2012,”  24/7  Wall  St.,  April  23,  2012,   http://247wallst.com/2012/04/23/mobile-­‐market-­‐spending-­‐to-­‐reach-­‐150-­‐billion-­‐in-­‐2012-­‐t-­‐vz-­‐vod-­‐znga-­‐p-­‐aapl-­‐ goog-­‐mm/   21  Amy  Cravens,  “A  demographic  and  business  model  analysis  of  today’s  app  developer.”    GigaOM  Pro,  2012,     appdevelopersalliance.org/files/pages/GigaOMApplicationDevelopers.pdf   22  Paul  Ausick,  “Mobile  Market  Spending  to  Reach  $150  Billion  in  2012,”  24/7  Wall  St.,   http://247wallst.com/2012/04/23/mobile-­‐market-­‐spending-­‐to-­‐reach-­‐150-­‐billion-­‐in-­‐2012-­‐t-­‐vz-­‐vod-­‐znga-­‐p-­‐aapl-­‐ goog-­‐mm/   23  “Onward  and  Upward,”  Screen  Media  Daily,  http://www.screenmediadaily.com/marketing-­‐dpaa-­‐digital-­‐place-­‐ based-­‐advertising-­‐association-­‐out-­‐of-­‐home-­‐media-­‐planning-­‐buying-­‐survey-­‐centro-­‐mobile-­‐tablets-­‐0629909.shtml       33  

Expenditure  on  Mobile  DR  /  Mobile  Enhanced  Non-­‐Mobile  Media    
Table  14:  Marketer  Expenditures  on  Mobile  DR  /  Enhanced  Non-­‐mobile  Media   $Millions   2010   2011   2012   2013   1,312   210   155   16   177   57   417   36   84   77   66   2014   2,174   493   188   27   273   74   687   54   120   104   132   2015   CAGR   TOTAL   166   336   669   Direct  Mail   21   70   140   Magazines   22   44   88   Business  Papers   9   9   13   Newspapers   36   66   96   Radio   8   16   24   Television   22   37   127   OOH   3   7   18   Event   11   24   52   Sponsorship   Packaging   12   25   50   Miscellaneous   19   34   50   Source:  mLightenment  based  on  IHS  Global  Insight  
 

2,912   77.3%   630   97.4%   337   72.6%   38   33.4%   297   52.5%   110   68.9%   943   112.0%   78   91.9%   161   133   167   71.0%   61.8%   54.5%  

Perhaps  one  of  the  most  compelling  aspects  of  mobile  is  its  ability  to  integrate  with  nearly  any   non-­‐mobile  marketing  channel.  To  account  for  mobile’s  integration  in  non-­‐mobile   communications,  we  looked  at  the  three  following  categories  of  mobile  enhancements  to  non-­‐ mobile  marketing  media  and  advertising.       Mobile  Enhanced  Calls  to  Action.  This  includes  short-­‐code-­‐based  SMS  calls  to  action  as  well  as   the  classic  direct  response  vehicles  of  voice  (dialing  a  800  number  from  a  mobile  phone).   Although  using  a  phone  to  visit  a  site  or  send  an  e-­‐mail  constitutes  mobile  response,  our  study   counts  only  a  tiny  fraction  of  such  ‘real  estate’  in  other  media  toward  mobile  expenditure,  since   we  found  a  negligible  portion  of  this  activity  to  be  specifically  mobile-­‐optimized  at  this  point.     More  significant  are  the  increasingly  frequent  calls  to  “follow  us  on  Twitter”  (or  Facebook  or   many  other  mobile-­‐accessible  social  media  sites),  to  the  now  almost  ubiquitous  “silent”  calls  to   action  represented  by  the  numerous  social  sharing  icons  placed  on  all  manner  of  media.24         Recognition.  This  includes  the  use  of  barcodes,  a  fast-­‐growing  technique  over  the  last  18   months,25  and  the  popular  QR  code.26                                                                                                                  
24

 We  make  certain  assumptions  about  whether  the  placement  is  intended  to  reach  a  mobile  audience:    social   media  sharing,  following  or  liking  calls  to  action  or  icons  that  appear  in  outdoor  contexts,  eg  we  count  as  more   “mobile”  than  a  placement  in  other  media  where  the  respondent  is  likely  to  use  their  PC.   25  Jack  Loechner,  “Mobile  Barcode  Scanning  Explodes,”  MediaPost  Blogs,  August  20,  2012,   http://www.mediapost.com/publications/article/181094/mobile-­‐barcode-­‐scanning-­‐explodes.html   26  Taking  the  volume  of  scans  as  an  indicator  of  expenditure  is  problematic,  since  the  value  at  any  given  time   necessarily  includes  “noise”  from  consumer  behavior  (share  of  scanning  consumers  or  their  frequency).   Nonetheless,  it  appears  that  total  scans  must  be  bounded  by  marketer  provision  of  total  “opportunities  to  scan,”   i.e.,  the  extent  to  which  they  display  codes  more  prominently  on  more  media.  Data  on  scan  volume  from  “Mobile     34  

  Proximity.  This  includes  NFC,  Bluetooth,  and  RFID  enhancements.  Since  these  nascent   technologies  require  expenditure  by  mobile  and  non-­‐mobile  platform  providers  before   marketers  can  even  think  about  using  them,  at  least  some  of  the  expenditure  dollars  reported   here  constitute  platform  providers’  self-­‐promotional  marketing  efforts  (in  effect,  “place  your   mobile  ad  here”  advertising).       Following  are  highlights  of  major  developments  accounting  for  the  expenditure  on  mobile   enhancements  to  non-­‐mobile  media.     Direct  Mail     Though  postal  revenues  appear  to  be  in  long-­‐term  decline,  direct-­‐mail  expenditures,  as   suggested  by  Zenith  Optimedia’s  data  cited  above,  remain  in  the  tens  of  billions  of  dollars.  Our   estimate  of  expenditure  on  total  direct  mail  is  based  on  the  volume  of  pieces  shipped  by  the   USPS  within  the  standard  (advertising)  rate,  which  in  2012  amounted  to  79.8  billion  pieces.27    Of   these,  roughly  3  billion  were  so-­‐called  “flats,”  which  we  take  as  our  proxy  for  catalogs;  the   remainder  we  assume  to  be  bulk  direct  mail  letters  of  one  class  or  another.  Total  marketing   communications  costs  per  letter  piece  we  assume  to  be  about  $1  inclusive  of  postage;  for   catalogs,  we  assume  a  per  piece  marketing  communications  cost  of  about  $3.       Mobile-­‐enhanced  direct  mail  and  catalog  expenditure.    There  has  been  an  organic  move  within   the  direct  mail  industry  to  incorporate  mobile  interactive  and  direct  response  elements  within   their  overall  direct  mail  campaigns.    In  addition,  the  USPS’s  financial  crisis  has  led  it  to  a  number   of  mobile-­‐focused  direct-­‐mail  initiatives.28  Most  significantly,  the  USPS  launched  two  initiatives   in  2012  and  2013  providing  discounts  to  direct  mailers  who  newly  incorporated  mobile   enhancement  such  as  QR  codes,  mobile  apps,  and  mobile-­‐optimized  websites  in  their   campaigns.29       Our  estimation  of  total  expenditure  on  mobile  enhancement  recognition  in  direct  mail  includes   the  estimated  costs  of  the  USPS  programs’  partial  subsidy.  It  also  includes  the  remaining   unsubsidized  amount  incurred  by  marketers,  with  a  calculation  for  an  incremental  marketer                                                                                                                                                                                                                                                                                                                                                              
Barcode  Trend  Report  from  ScanLife,  Q2  2012,”  http://www.scanlife.com/pdf/scanlife-­‐trend-­‐report-­‐inforgraphic-­‐ Q2-­‐12.pdf.     27  This  volume  is  a  drop  of  4.9  billion  pieces  or  5.8%  from  2011.  USPS  Revenue,  Pieces  and  Weight  Report  for   FY2012.    www.usps.gov.    Thus  while  some  spending  on  direct  mail,  such  as  the  catalog,  is  clearly  migrating   elsewhere,  we  do  expect  overall  direct-­‐mail  expenditures  to  remain  in  the  billions  of  dollars  annually  for  the   foreseeable  future,  thanks  to  its  extremely  high  ROI  for  certain  categories  of  verticals  and  the  rising  average   expenditure  per  piece.     28  See  USPS,  “Progress  and  Performance:  Annual  Report  to  Congress  2012,”   http://about.usps.com/publications/annual-­‐report-­‐comprehensive-­‐statement-­‐2012/annual-­‐report-­‐ comprehensive-­‐statement-­‐2012.pdf   29  For  press  releases  and  press  coverage  on  this  USPS  initiative,  see   https://ribbs.usps.gov/index.cfm?page=mobilebarcode     35  

expenditure  for  “legacy”  mobile  enhancements,  such  as  SMS  calls  to  action,  that  are  not   covered  by  the  new  initiatives.30       Print:  Magazines  and  Newspapers     Like  direct  mail,  print  and  newspaper  advertising  expenditures  overall  are  experiencing  long-­‐ term  decline.     Mobile  recognition  in  magazines/newspapers.  Probably  the  best  publicly  available  source  on   the  prevalence  of  mobile  enhancements  to  print  advertising  comes  from  the  marketing  firm   Nellymoser,  which  reported  that  in  December  2011  QR  codes  appeared  in  8.4%  of  all  magazine   ads,  up  from  3.6%  from  the  end  of  the  prior  year.31  Our  own  spot-­‐check  of  print-­‐magazine   advertising  available  on  newsstands  in  the  New  York  City  area  in  late  2012  suggests  they  are  not   quite  as  ubiquitous  as  this  figure  suggests.32  We  also  observed  a  small  but  growing  trend  to   integrate  mobile  into  the  “creative”  of  magazine  advertising  in  other  ways,  such  as  by  making   mobile  scanning  part  of  the  delivery  of  the  final  print  artwork,  which  increases  the  net   percentage  of  the  print  real  estate  that  we  count  as  mobile  enhanced.33     Television  and  Radio   Despite  concerns  about  the  erosion  of  the  traditional  TV  and  radio  audience,  marketers  are   unlikely  to  forsake  tried-­‐and-­‐true  budgeting  assumptions  until  overwhelming  evidence  forces   them  to  do  so.    Thus,  the  base  of  expenditure  in  these  media  from  which  we  derive  the  slice  of   the  pie  represented  by  mobile  enhancements  will  remain  in  the  tens  of  billions  of  dollars  for  the   foreseeable  future.       Mobile-­‐enhancements.  TV  broadcasters  and  advertisers  increasingly  recognize  that  mobile  co-­‐ consumption  or  “multi-­‐screening”  is  a  fact  of  life  for  many  viewers.  Advertising  creative  often   implicitly  assumes  that  a  TV  ad  will  be  shown  while  the  consumer  is  texting  or  using  an  app  on   their  tablet,  and  not  infrequently  includes  dialogue  or  text  meant  to  prompt  a  “soft”  mobile   response  such  as  a  social-­‐media  tweet  or  search,  even  in  the  absence  of  a  formal  mobile   response  call  to  action.34    In  addition,  SMS,  email,  and  800-­‐numbers  have  been  and  will                                                                                                              
30

 The  amount  spent  only  includes  the  cost  of  printing  envelopes  and  enclosures  with  QR  codes.  The  cost  of   building  and  maintaining  a  mobile  website  is  not  counted  here,  but  it  is  included  in  expenditure  on  mobile  CRM— mobile  websites  and/or  apps,  as  appropriate.     31  Mark  Milian,  “QR  Code  Fatigue,”  Bloomberg  Businessweek,  (June  28,  2012),   http://www.businessweek.com/articles/2012-­‐06-­‐28/qr-­‐code-­‐fatigue   32  The  marketing  industry’s  own  Advertising  Age  experimented  with  using  mobile  recognition  to  enhance  content   delivery  for  its  print  editions.  See  for  example  the  January  30,  2013,  issue.     33 For  an  example  of  a  print  advertisement  whose  creative  devotes  a  high  percentage  of  its  real  estate  to  “mobile   recognition”  without  the  use  of  QR  codes,  see  “AXA:  When  iAds  Meet  Print  Ads,”  Digital  Buzz,  September  29,  2010,   http://www.digitalbuzzblog.com/axa-­‐when-­‐iads-­‐meet-­‐print-­‐ads/   34  Advertising  Age  recently  reported  that  the  2012  Super  Bowl  saw  8  commercials  mention  Twitter  and  8  mention   Facebook.     36  

continue  to  be  a  popular  method  for  getting  viewer  attention  especially  outside  of  prime  time   broadcast  TV.           Mobile  recognition.  Visual  recognition  technologies  such  as  QR  codes  that  require  the  viewer,   with  mobile  device  in  hand,  to  do  something,  does  not  appear  to  be  widely  adopted  by   marketers.  On  the  other  hand,  audio  recognition  may  be  the  bigger  piece  of  the  pie  for  two   reasons.  First,  active  audio  recognition  behaviors  among  TV  viewers  have  already  begun,  for   example,  when  they  use  apps  such  as  Shazam  to  scan  songs  that  accompany  ads.35  Secondly,   audio  interviews  with  digital  agency  experts  and  client-­‐side  marketers  lead  us  to  believe  there  is   great  interest  in  passive  mobile  “ad  syncing”  technologies  for  TV,  which  is  more  likely  to  gain   dollars  because  audio  recognition  doesn’t  have  to  be  aimed  at  the  TV  screen.  Properly   designed,  audio  recognition  can  be  an  almost  completely  passive  way  for  the  mobile  device  to   hear  what  is  being  watched  and  to  create  incremental  second-­‐device  communications  or   response  opportunities,  similar  to  that  described  recently  in  the  Los  Angeles  Times.36   Out-­‐of-­‐Home  Advertising     The  overall  out-­‐of-­‐home  and  place-­‐based  advertising  market  is  traditionally  a  small  part  of   marketers’  advertising  budgets  that  appears  to  be  enjoying  something  of  a  renaissance.  The   reason  involves  the  industry’s  rapid  move  to  digital,  primarily  electronically  networked   transmission  of  static  digital  images,  video,  and  other  forms  of  rich  media.37  This  means  that   advertising  outdoors  increasingly  can  be  targeted  in  real  time,  interactive,  measurable,  and,   most  significantly  for  this  study,  growing  opportunities  for  mobile  integration  and   enhancements.     Mobile-­‐enhanced  OOH.  Mobile  marketing  shows  growth  in  this  area  not  only  because  out-­‐of-­‐ home  advertising  in  general  is  growing,  but  because  the  category  is  becoming  increasingly   digital  (consider  electronic  billboards  and  bus  shelters,  for  example,  that  can  communicate  with   mobile  phones  in  close  proximity.)  Initially  the  most  widely  used  form  of  mobile  integration  was   SMS-­‐based  short-­‐code  marketing  direct  response.  More  recently,  however,  the  industry  has   seen  experiments  with  QR  code  recognition  integrations,  and  in  2012  both  Bluetooth  and  NFC-­‐                                                                                                            
35

 Parov  Solaar,  for  example,  gained  a  significant  boost  in  popularity  when  consumers  used  Shazam  to  scan   Heineken  commercials.     36  As  described  by  the  LA  Times  and  on  ConnecTV’s  website  (http://www.connectv.com/ad-­‐sync-­‐network),   ConnecTV’s  AdSync    technology  uses  the  mobile  device’s  audio  functionality  to  recognizes  a  commercial  airing  on   TV,  which  creates  the  opportunity  for  the  marketer  to  deliver  complementary  “second  screen”  content  to  the   mobile  device.  Significantly,  the  syncing  opportunity  for  marketers  doesn’t  seem  limited  to  TV  commercials.  A   feature  called  TV  Words  allows  advertisers  to  bid  on  key  terms  (most  likely  a  brand  or  product  name  or  a  particular   topic)  that  are  spoken  on  television  while  the  viewer  is  multitasking  on  their  smartphone  or  tablet,  thus  making   any  in-­‐app  ads  that  are  delivered  via  the  ad  network  (e.g.,  to  the  video  game  they  were  playing)  more  relevant  to   the  consumer—or  at  least  potentially  complementary  to  their  real  time  background  TV  co-­‐consumption.  See   http://www.latimes.com/entertainment/envelope/cotown/la-­‐fi-­‐ct-­‐connectv-­‐20130104,0,7034239.story   37  “Onward  and  Upward,”  Screen  Media  Daily,  http://www.screenmediadaily.com/marketing-­‐dpaa-­‐digital-­‐place-­‐ based-­‐advertising-­‐association-­‐out-­‐of-­‐home-­‐media-­‐planning-­‐buying-­‐survey-­‐centro-­‐mobile-­‐tablets-­‐0629909.shtml     37  

based  proximity  enhancements  appeared  to  gain  some  more  visibility  in  an  effort  to  capitalize   on  the  latest  generation  of  smartphones  with  NFC.     Event  Sponsorship   Event  sponsorship  is  an  important  and  growing  part  of  non-­‐traditional  advertising  media.     Because  of  their  site-­‐specific  nature,  events  are  a  natural  fit  with  mobile  marketing,  especially   for  opportunities  that  leverage  geo-­‐location  and  real-­‐time  interactivity,  such  as  text-­‐to-­‐screen   (or  sometimes,  text-­‐to-­‐Jumbotron  or  iMax).  Our  research  found  that  using  mobile  within  events   of  even  modest  size  (>1000  attendees)  was  now  almost  de  rigueur.  Expenditure  on  mobile   enhancements  within  event  sponsorship  often  included  one  or  more  of  the  following  elements:     • Allowing  attendees  to  access  branded  collateral—white  papers,  one-­‐sheets,  downloads,   videos—via  mobile  websites  or  event-­‐branded  apps;     • Event-­‐wide  saturation  with  branded  smart  barcodes  on  everything  from  display   advertising  to  cocktail  napkins;     • Driving  attendees  to  conference  booths  through  “gamification”   • Promoting  “events  within  events”  such  as  parties,  keynote  speakers,  etc.,  via  SMS   messaging  and  Bluetooth   • Branding  opportunities  galore  via  the  events’  mobile  websites  and  via  within-­‐app   advertising.   Packaging  Communications   Overall  expenditures  on  packaging  communications.38  We  estimate  the  “consumer  facing”  or   “wrapper”  component  of  US  packaging  expenditure  to  be  about  $5  billion  in  2012,  by  which  we   mean  net  of  extraneous  (for  marketing  purposes)  non-­‐printed  packing  material  costs  the  end-­‐ customer  either  never  sees  or  that  the  marketer  would  never  use  to  communicate.       Mobile-­‐enhanced  packaging.  Mobile-­‐enhanced  expenditures  here  primarily  reflect  the   percentage  of  brands  incorporating  QR  or  other  scannable  bar  codes  on  the  packaging,  a   placement  that,  according  to  several  sources  (most  notably  Scanbuy),  is  now  the  most  popular  

                                                                                                           
38

 We  apologize  for  inventing  this  awkward  name,  but  a  name  was  necessary  since  (near  as  we  can  tell)  annual  US   packaging-­‐industry  expenditures  suitable  for  benchmarking  in  a  media  impact  study  appear  not  to  exist.  Packaging   prior  to  the  emergence  of  mobile  marketing  has  primarily  been  thought  of  as  a  means  of  transporting,  storing,  and   displaying  the  product  through  its  journey  from  raw  material  to  the  consumer,  not  as  a  communications  vehicle  for   any  messaging  other  than  a  brand’s  logo,  product  description  and  price—even  THIS  END  UP  or  FRAGILE.  As  our  interest   is  in  the  mobile  component  of  this  communications  opportunity,  we  have  to  net  out  costs  the  packaging  industry   typically  measures  as  important:  cardboard  boxes  used  in  bulk  shipments,  disposable  plastic  shrink-­‐wrap,  shock-­‐ absorbing  or  insulating  material,  and  much  else.  We  thus  took  as  our  marketing-­‐communications  base  the  portion   of  costs  associated  with  printing  aimed  at  the  end-­‐customer  or  costs  associated  with  labeling  on  the  container   surface.  Examples  include  the  printed  cardboard  box  a  child  pours  cereal  from  in  the  morning,  the  soda  can   dispensed  from  a  vending  machine  that  boasts  of  a  football-­‐team  sponsorship,  and  so  on.       38  

source  for  scanned  bar  codes.39  A  much  smaller  portion  of  packaging  real-­‐estate  is  attributable   to  SMS  calls  to  action.  Our  expenditure  number  also  makes  a  tiny  allowance  for  other  forms  of   mobile  response—the  sliver  of  space  allocated  on  the  package  to  a  website  URL  or  an  800   number,  either  of  which  may  be  accessed  via  mobile  devices.       Miscellaneous     Our  estimate  of  expenditure  mobile  enhancements  reflects  a  number  of  digital  modernizations   in  some  very  traditional  marketing  communications,  many  of  which  are  directly  related  to  the   rise  of  mobile  marketing.  Our  research  suggests  the  category  really  comprises  two  separate   sub-­‐segments  of  relevance  to  mobile.  The  first  is  the  category  of  electronic  customer  touch   points  such  as  vending  machines,  kiosks,  and  ATMs.  These  are  rapidly  becoming  digital   communications  vehicles  in  their  own  right  (to  speak  nothing  of  early  experiments  in   incorporation  of  mobile  payments;  see  below).  In  many  instances,  the  incorporation  of  digital   displays,  keypads,  and  so  forth  is  creating  opportunities  for  expenditure  on  mobile-­‐marketing   enhancements,  such  as  QR  codes  in  ATM  screens  that  lead  customers  to  download  proprietary   apps  or  offers.     The  second  segment  is  print-­‐  and  paper-­‐based  media  such  as  handbills,  flyers,  freestanding   circulars  (typically  available  for  pick  up  in  supermarkets),  Yellow  Pages–type  directories,  and  so   on.  Similar  to  developments  already  discussed  for  direct  mail,  newspapers,  and  periodicals,   printers  (who  benefit  from  this  surprisingly  large,  though  very  local,  market)  are  also   increasingly  encouraging  their  clients  to  include  SMS  calls  to  action  and  QR  codes  (typically  to   deliver  mobile  coupons)  as  part  of  the  content.  We  expect  this  trend  toward  mobile   enhancement  to  continue,  even  as  the  print-­‐based  segment  of  this  overall  market  experiences   a  slow  decline.40    

Expenditure  on  Mobile  Customer  Relationship  Management  (CRM)  
Our  top-­‐line  estimate  of  marketing  expenditure  on  owned  mobile  media  in  2012  is  a  little  more   than  $3.5  billion;  the  majority  of  which  we  believe  is  accounted  for  by  expenditure  on   marketing-­‐related  mobile  apps.        
Table  15:  Top-­‐Line  Mobile  CRM  Expenditure   $  Millions   2010   2011   1,878   38   748   2012   2,964   59   846   2013   4,273   85   814   2014   5,910   118   806   2015   7,686   154   741  

Total  Mobile  CRM   1,248   Mobile  Voice  Expenditure     25   Mobile  Messaging  Expenditure   644  

                                                                                                           
39

 Scanlife.com,  “Are  QR  Codes  Undervalued?:  Digiday  talks  about  QR  Codes  and  Scanlife,”  June  5,  2012,   http://www.scanlife.com/en/digiday-­‐talks-­‐about-­‐qr-­‐codes-­‐and-­‐scanbuy]   40  For  example,  see  http://sitmobile-­‐international.blogspot.com/2012/03/sms-­‐mobile-­‐flyers-­‐effective-­‐results-­‐ in.html       39  

Mobile  Web  Expenditure   Mobile  Email  Expenditure   Mobile  Apps  Expenditure   Mobile  Proximity  Expenditure   Mobile  Recognition  Expenditure   Source:  mLightenment  

13   22   544   0   0  

61   64   967   0   0  

172   144   1,743   0   0  

382   239   2,753   0   0  

696   347   3,942   0   0  

965   459   5,368   0   0  

  While  clearly  important,  Mobile  CRM  is  a  difficult-­‐to-­‐measure  expenditure  category.  First,  the   portion  of  CRM  that  includes  marketers’  efforts  to  create  “owned  media,”  i.e.  marketing   communications  that  bypass  publishers  and  paid  advertising  altogether,  requires  the  market   researcher  to  dig  deeply  for  some  often  unconventional  data  sources.    This  category  includes   marketers’  efforts  to  become  visible  online  and  create  one-­‐to-­‐one  connections  with  customers.   It  includes  expenditures  necessary  for  marketers  to  build  an  online  presence,  become  visible   and  findable  through  search  engines,  create  mobile  sites,  and  other  related  expenses,  many  of   which  lack  clear  boundaries  or  completely  transparent  data  sources.    No  less  importantly,   marketers’  “owned”  marketing  communications  content  can  often  be  difficult  to  distinguish   from  their  “earned”  media,  i.e.  the  marketing  communications  created  and  distributed  by   consumers,  bloggers,  etc.,  usually  at  little  to  no  cost  to  marketers.     Marketer-­‐Owned,  “Opt-­‐In”  Relationship  SMS/MMS     Here  we  estimate  the  total  number  of  opt-­‐in  broadcast  SMS  message.  We  see  two  categories,   the  biggest  of  which  is  publishers’  branded  content;  the  other  accounts  for  marketer-­‐specific   content.41     Owned  Mobile  E-­‐mail   Two  estimates  of  the  size  of  the  overall  hosted  e-­‐mail  marketing  industry  appear  to  be  the  most   widely  cited  and  reliable.  Forrester  Research  estimated  that  the  2012  expenditure  on  hosted  e-­‐ mail  marketing  would  approach  $1.7  billion,  growing  moderately  to  $2.2  billion  by  2015.42   Somewhat  more  recently,  Marketing  Growth  Strategies,  LLC,  forecast  a  total  market  size  of  $2.6   billion  in  2013,  with  an  annual  growth  rate  of  about  20%.43  

                                                                                                           
41

 For  example,  in  “A  New  Era  for  Messaging”  (2011),  Juniper  Research  estimated  that  (operator)  revenues   worldwide  from  A2P  messaging  would  reach  $70  billion  in  2016,  with  the  US  share  representing  a  little  more  than   25%,  or  about  $17  billion.   42  Niki  Scevak  with  Shar  VanBoskirk,  Forrester  Research  Email  Marketing  Forecast,  2011  To  2016  (US).   March  24,  2011.   http://www.forrester.com/Forrester+Research+Email+Marketing+Forecast+2011+To+2016+US/fulltext/-­‐/E-­‐ RES59101     43  Dan  Freeman,  “Email  Marketing:  An  Industry  Overview,”  2011,  http://www.pinpointe.com/wp-­‐ content/uploads/2011-­‐Email-­‐Marketing-­‐Guide-­‐Pinpointe.pdf.       40  

Mobile’s  share  of  hosted  e-­‐mail  marketing.  Proportional  to  the  number  of  e-­‐mails  now  being   opened  on  smart  devices,  marketers  appear  to  be  lagging  far  behind  consumers  in  their   migration  of  e-­‐mail  to  the  mobile  environment  as  of  this  writing.44       Chief  Marketer’s  2012  mobile  marketing  report  indicates  that  36%  of  survey  respondents   measure  mobile  e-­‐mail  opens.  Of  these,  72%  said  they’re  optimizing  their  messages  for  the   mobile  browser;  however,  mobile  optimization  appears  to  be  a  minimal  undertaking  to  have   preexisting  content  render  properly  on  the  most  common  device  platforms.45  Conservatively   assuming  that  none  of  the  remainder  are  optimizing  their  e-­‐mails  for  the  mobile  user,  this   translates  into  approximately  one-­‐quarter  of  marketers  with  owned  e-­‐mail  communications   putting  incremental  dollars  into  a  minimal  expenditure  on  mobile  optimization.46   Owned  Mobile  Web     Mobile  SEO,  mobile  website  build  and  optimization.  The  overall  U.S.  SEO  market  is  probably  on   the  order  of  $3  billion.47  We  attribute  a  fraction  of  this  to  mobile  based  on  the  proportion  of   marketers  with  mobile  optimized  websites.  For  example,  according  to  Chief  Marketer,  31%  of   marketers  said  their  brand’s  main  website  has  been  optimized  for  viewing  over  most  mobile   devices;  17%  report  that  they  run  a  separate  version  of  that  site  built  for  mobile  visits.    Of   course,  not  even  these  marketers  are  optimizing  for  all  mobile  devices  and  platforms.  Mobile-­‐ optimized  websites  can  also  mean  that  a  brand  has  to  create  mobile-­‐optimized  pages  across   numerous  content  platforms,  especially  major  social  sites  like  Facebook.       Mobile  web  content  expenditure.  The  total  size  of  the  content  market  in  the  United  States  is   estimated  to  be  on  the  order  of  $2  billion  in  2011.48     Mobile  Apps   Mobile  Apps  account  for  the  largest  expenditure  of  all  the  categories  in  mobile  CRM.    
Table  16:  Expenditure  on  Marketing  Apps     iOS  Marketing  Apps   Developed  (est'd)   Non-­‐iOs  Apps  
44 45

2010   12,890   1.5  

2011   13,626   2  

2012   16,204   2.33  

2013   17,554   2.71  

2014   19,212   3.08  

2015   20,869   3.46  

                                                                                                           

 As  of  this  writing  the  share  of  e-­‐mails  opened  on  mobile  devices  was  on  the  order  of  36%.      Chief  Marketer  Mobile  Marketing  Survey  2012,  Op.  cit.   46  Cf.  the  most  recent  2013  StrongMail  Survey.  StrongMail,  “2013  Marketing  Trends  Survey     Email  Marketing,  Social  Media  and  Mobile  Continue  to  Attract  Increased  Investment;     Data  Integration  Remains  Top  Email  Marketing  Challenge,”  http://www.strongmail.com/pdf/SM_Trends2013.pdf   47  Econsultancy,  “SEMPO  State  of  Search  Marketing  Report  2012,”  September  2012,   http://econsultancy.com/us/blog/7447-­‐sempo-­‐study-­‐us-­‐search-­‐spending-­‐nears-­‐20-­‐billion   48  TransparencyMarketResearch,  “Mobile  Content  Market  -­‐  Global  And  U.S.  Industry  Analysis,  Size,  Share,  Trends   And  Forecasts  2011  –  2017,”  http://www.transparencymarketresearch.com/mobile-­‐content-­‐market.html     41  

Multiplier   Total  Mktg  Apps   19,334   27,252   37,810   47,543   59,236   72,172   (Est’d)   Av  Cost  (Assumed)  $   25,000   31,000   40,000   50,000   57,500   65,900   Total  ($  Millions)   483   845   1,512   2,377   3,406   4,756   Source:  Author  calculations  derived  in  part  from  AppAnnie.com,  Flurry.com,  primary  survey  results,  and   marketer/provider  interviews.    

  Published  app-­‐development  costs  range  anywhere  from  $10,000  to  $250,000,  depending  on   functionality.  The  assumed  annual  development  cost  cited  in  the  chart  above  is  our  best   conservative  estimate,  based  on  examples  of  standard-­‐functionality,  marketing-­‐relevant  apps   from  the  Apple  App  Store,  which  we  benchmarked  by  inquiring  with  digital  agencies  we   interviewed  about  what  developing  apps  with  comparable  features  would  likely  cost.  We  then   lowered  the  average  amount  by  one-­‐third  since  there  are  probably  many  more  low-­‐end  apps   developed  (i.e.,  we  used  an  estimate  of  the  median  expenditure  rather  than  the  mean).       To  estimate  marketer  expenditure  across  all  U.S.  app  markets,  we  used  a  small  multiplier  that   trends  upward  over  time  to  extend  what  we  learned  from  the  Apple  App  Store  to  the  rest  of   app  marketplace,  based  on  both  popularity  of  each  app  with  marketers  and  with  mobile   consumers.49  Finally,  we  reduced  the  total  by  about  30%  to  account  for  marketing  apps  in  the   US  app  stores  not  actually  developed  for  the  US  market.50    

Expenditure  on  Mobile  Marketing  Services  
All  of  the  preceding  data  pertained  to  the  variable  costs  associated  with  the  “media  buy”  of   mobile  marketing  communications,  or  the  functional  equivalent  thereof.  These  expenditures  do   not  exhaust  all  the  dollars  that  businesses  incur  as  result  of  mobile  marketing.  The  remaining   category  comprises  overhead  or  relatively  fixed  costs  in  marketing  services  or  internal   corporate  support  that  are  directly  attributable  to  mobile  marketing.      

                                                                                                           
49

 We  began  with  Apple  App  Store  data  because  it  is  the  largest,  and  its  historical  data  on  developer  activity  is   more  available  and  comprehensive.  But  apps  are  distributed  through  Google  Play,  Tapjoy,  the  Microsoft  Windows   Store,  the  Blackberry  Store,  Facebook,  and  others.  However,  the  gap  between  iOS  and  non-­‐iOS  apps  appears   significant.  As  an  indicator,  consider  that  according  to  AppAnnie.com,  the  revenue  multiple  Apple  paid  to  its   publishers  recently  was  some  four  times  greater  than  that  paid  by  Android,  suggesting  the  possibility  that  for  each   app  developed  in  the  Apple  platform  there  is  only  0.25  of  an  app  on  its  next  closest  rival.   50  Our  conclusion  that  most  US  marketing  apps  were  originally  intended  primarily,  if  not  exclusively,  for  the  iOS   Store  is  separately  confirmed  by  marketer  surveys.  Early  in  2012,  37%  of  respondents  told  Chief  Marketer  they   offered  at  least  one  smartphone  app  or  planned  one  for  2012,  compared  to  about  25%  who  said  the  same  in  the   2011  survey.  Of  those,  most  said  they  are  targeting  apps  for  Apple’s  iPhone  (94%  have  one)  and  iPad  (72%),   although  about  three-­‐quarters  also  indicated  plans  for  the  Android  platform.  See,  for  example,  the  Chief  Marketer   surveys  for  2011  and  2012.       42  

    Table  17:  Breakout  of  Expenditure  on  Other  Mobile  Marketing–related  Services  
BREAKOUT  OF  EXPENDITURE  ON   OTHER  MOBILE  MARKETING   RELATED  SERVICES   Total  Expenditure  on  Other  Mobile   Marketing  Related  Services   Advertising  Agencies   Analytics  /  Audience  Measurement   Sellers   Mobile  Commerce  &  Payment   Services  Fees   Mobile  Couponing  (Sales   promotions)   Public  relations  fees   Mobile  Payments  Fees  -­‐  NFC-­‐based   Non-­‐NFC   Mobile  Banking  Investments   Mobile  Ticketing  Investments   M  Mktg  Network  Access  Charges   Cellular   Data   M  Mktg  Related  Hardware   Investment   Handsets   Peripherals       2010   1,130   455   96   309   32   2   9   26   171   68   97   36   60   173   50   123   2011   1,947   800   145   508   66   4   15   42   273   109   148   56   93   345   100   245   2012   3,401   1,405   241   974   136   8   32   79   514   205   224   84   140   558   162   396   2013   5,188   2,236   366   1,446   211   12   51   116   754   302   395   148   247   744   216   528   2014   7,188   3,249   520   1,916   290   18   63   153   995   398   567   213   354   936   272   664   2015   9,163   4,227   676   2,393   373   24   77   190   1,235   494   739   277   462   1,129   328   801   CAGR   52.0%   56.2%   47.7%   50.6%   63.5%   71.0%   52.5%   48.5%   48.5%   48.5%   50.2%   50.2%   50.2%   45.4%   45.4%   45.4%  

Source:  mLightenment  

  Among  the  most  important  segments  in  this  category  of  expenditure  are  the  following:   Advertising  Agency  Services   AdAge  has  conducted  detailed  surveys  of  the  publicly  reported  ad  agency  revenues  for  many   years,  and  recently,  it  began  including  mobile  marketing  activity.  For  the  most  recent  year   available,  it  reported  total  2011  U.S.  agency  billings  of  $33,174,187,000.51  (Advertising  agency   revenues  are  also  included  under  their  own  NAICS  code  within  the  standard  map  of  the  U.S.   economy  and  as  such,  form  part  of  the  mLightenment  model  of  marketing  expenditure  and   impacts.)       Mobile-­‐related  agency  fees.  AdAge  reported  mobile-­‐marketing-­‐related  revenues  of  about   $550  million  in  2011  for  the  top  25  agencies  working  in  this  market.  Believing  that  mobile-­‐                                                                                                            
51

 Advertising  Age  DataCenter.  Accessed  December  29,  2012.     43  

 

related  agency  work  goes  beyond  the  top  25  firms,  we  estimated  a  trend  line  for  the  top  25’s   share  based  of  overall  agency  revenue.  This  allows  us  to  estimate  the  mobile-­‐marketing  fees  of   the  next  largest  25  agencies  in  the  market,  for  a  total  annual  estimate  of  $800  million  in  mobile   agency  fees  for  the  top  50.  Our  figure  may  be  somewhat  conservative,  since  there  are  hundreds   of  agencies  in  the  AdAge  database  and  since  many  more  than  50  agencies  in  the  US  are  most   likely  involved  in  mobile-­‐related  work  (especially  in  the  out-­‐years  of  our  projection).   PR  Agency  Services     As  discussed  in  our  introduction,  earned  media  is  brand,  product,  or  brand-­‐related  content  that   is  organically  “earned”  because  it  is  deemed  newsworthy  by  content  producers—news  outlets,   bloggers,  and  consumers  who  post  to  social  media  sites.  But  as  noted,  such  earned  media  is  not   always  entirely  free.  Often  there  is  a  PR  pitch  or  creative  strategy  behind  it,  for  which  the   marketer  (or  more  often,  its  corporate  communications  department)  pays  a  fee.       As  digital  and  mobile  represent  a  growing  piece  of  the  owned  media  that  PR  agencies  help   deliver,  examining  the  sources  of  PR  agency  revenue  can  help  ascertain  how  much  of  it  can  be   attributable  to  mobile  using  conservative  assumptions  similar  to  those  used  to  estimate   advertising  agency  fees  attributable  to  mobile  marketing  work  performed.         In  2012,  the  PR  industry  expected  annual  spending  on  traditional  public  relations  services  to   increase  at  a  compound  annual  growth  rate  of  8%  to  $5.4  billion.  Annual  spending  on  word-­‐of-­‐ mouth  (WOM)  marketing  services  they  expected  to  increase  at  a  compound  annual  growth  rate   of  22.3%  to  $5.6  billion  (up  from  $2  billion  in  2010).52       Our  estimate  of  PR-­‐related  mobile-­‐marketing  fees  is  based,  therefore,  on  several  breakouts:   estimating  the  role  for  PR  agencies  in  marketing  activities  in  general,  particularly  word-­‐of-­‐ mouth  marketing;  the  share  on  digital  within  PR  agency  media  activities;  and  finally,  trends  in   the  share  for  mobile  within  PR’s  digital  marketing  activities.        
Table  18:  Estimated  Fees  to  PR  Agencies  from  Mobile-­‐Marketing  Activities   $  Millions   Traditional  PR  Revenues   WOM  Revenues   Overall  Digital  Percentage   Mobile  as  %  Digital  Revenues   Mobile  as  %  Overall  Revenues   TOTAL  MOBILE  FEES  ($  Million)    Of  Which:  Traditional  PR  fees    WOM  fees   2011   5,000   4,590   13%   2%   0.3%   25   13   12   2012   5,400   5,600   15%   4%   0.6%   66   32.4   34   2013   5,800   6,610   17%   8%   1.4%   169   78.88   90   2014   6,200   7,620   19%   11%   2.1%   289   129.58   159   2015   6,600   8,630   21%   14%   2.9%   448   194.04   254  

                                                                                                           
52

 Public  Relations  Society  of  America,  “PR  by  the  Numbers,  Industry  Size  and  Growth”  http://media.prsa.org/pr-­‐ by-­‐the-­‐number/     44  

Source:  Author  calculations  based  on  PR  industry  data  and  PR  agency  interviews.  

Mobile  Analytics  and  Metrics  Services   Our  survey  and  interviews  suggest  that  in  2012  mobile  marketers  and  mobile  publisher  were   spending  an  amount  in  the  vicinity  of  5%  of  their  mobile  marketing  budgets  on  marketing  and   media  analytics  or  audience  research  services.    We  expect  this  number  will  likely  expand  to   almost  10%  over  the  next  several  years,  as  “big  data”  becomes  increasingly  important  in  mobile   marketing.     Mobile  Coupons  and  Promotions   Our  figure  for  the  U.S.  in  2012  represents  roughly  30%  of  the  world  market,  declining  to  23%  by   2016.  In  late  2011,  a  report  from  Juniper  Research  found  a  worldwide  $5.4  billion  in  redeemed   value  this  year  in  mobile  coupons  (primarily  via  apps);  they  projected  that  the  total  redemption   value  of  mobile  coupons  will  exceed  $43  billion  globally  by  2016,  an  eightfold  increase.53   Network  Access  Charges   Marketer  expenditure  on  access  charges  are  an  external  variable  cost  that  correlates  with  the   volume  of  CRM  activity-­‐owned  SMS,  etc.,  which  may  be  separately  incurred.    We  include  a  very   conservative  expenditure  estimate  for  charges  directly  related  to  mobile  marketing.   Mobile  Marketing-­‐Related  Hardware  and  Peripherals   In-­‐store  or  on-­‐site  mobile  device  integration  equipment  &  installation  (e.g.,  QR  Code  Scanners).   This  varies  significantly  by  marketer  vertical.  Thus,  digital-­‐ticket  seller  Fandango  recently   indicated  that  about  13%  of  the  US  movie  theaters  it  works  with  had  installed  QR-­‐code  readers   to  scan  tickets  displayed  on  smartphones.  That  percentage  is  expected  to  reach  25%  by  the   start  of  2013.54        
 

Table  19:  Retailer  Expenditure  on  In-­‐Store  Mobile  Programs     2011   2012   2013   Average  Retailer  Mobile  Investment   $55,000   $207,000     %  Using  e-­‐receipts   0.1   0.22   0.45   %  Using  Mobile  POS  Options   0.12   0.26   0.57   %  with  Mobile-­‐Optimized  Websites   0.6       Source:  Author  calculations  benchmarked  against  Forrester  Research.  
 

                                                                                                           
53

 Mark  Milian,  “QR  Code  Fatigue,”  Bloomberg  Businessweek,  June  28,  2012,   http://www.businessweek.com/articles/2012-­‐06-­‐28/qr-­‐code-­‐fatigue     54  Milian,  “QR  Code  Fatigue.”     45  

Our  estimates  of  the  costs  for  such  installations  are  based  on  trade  press  accounts  of  individual   mobile  integration  programs  undertaken  in  the  recent  past.  One  such  analysis  based  on   published  accounts  is  given  in  the  table  immediately  below,  involving  Home  Depot:  
 

Table  20:  Sample  Mobile  In-­‐Store  Equipment  Investment   Total  Program  Cost   Devices  Installed   Cost  Per  Device   Stores  Where  Installed   Devices  Per  Store   Cost  Per  Store   $64,000,000   30,000   $2,133   1,970   15.23   $32,487  
55

Source:  Published  Reports  on  The  Home  Depot.  

                                                                                                           
55

 Adam  Blair,  "Home  Depot's  $64  Million  Mobile  Investment  Rolls  Out  to  1,970  Stores,"  Retail  Information   Systems  News,  December  7,  2010,  http://risnews.edgl.com/retail-­‐news/Home-­‐Depot-­‐s-­‐$64-­‐Million-­‐Mobile-­‐ Investment-­‐Rolls-­‐Out-­‐to-­‐1,970-­‐Stores56966.     46  

Summary:  Mobile  Advertising  and  Marketing  Expenditure  by  Mobile   Media  
Table  21:  Mobile  Advertising  and  Marketing  Expenditure  by  Mobile  Media       Mobile  Advertising,  DR,  and  CRM   Mobile  Voice   Ad   DR   CRM   SMS  /  MMS     Ad   DR   CRM   Email   Ad   DR   CRM   Mobile  Web   Ad   DR   CRM   Mobile  Apps   Ad   DR   CRM   Proximity  (Bluetooth,  NFC)   Ad   DR   CRM   Recognition  (QR  Codes,  Audio,  Video,  etc.)   Ad   DR   CRM   Source:  mLightenment   2010   2,405   49   20   5   25   920   235   41   644   69   6   41   22   683   629   41   13   644   101   -­‐   544   19   -­‐   19   -­‐   21   -­‐   21   -­‐   2011   3,957   82   35   9   38   1,096   266   82   748   158   12   82   64   1,311   1,168   82   61   1,230   263   -­‐   967   38   -­‐   38   -­‐   42   -­‐   42   -­‐   2012   6,693   139   61   18   59   1,308   298   164   846   331   23   164   144   2,428   2,092   164   172   2,328   585   -­‐   1,743   75   -­‐   75   -­‐   84   -­‐   84   -­‐   2013   10,456   219   97   36   85   1,448   313   321   814   598   37   321   239   3,860   3,157   321   382   4,019   1,266   -­‐   2,753   148   -­‐   148   -­‐   164   -­‐   164   -­‐   2014   15,162   320   142   60   118   1,665   326   533   806   933   54   533   347   6,064   4,836   533   696   5,663   1,721   -­‐   3,942   245   -­‐   245   -­‐   272   -­‐   272   -­‐   2015   19,806   418   184   80   154   1,782   328   713   741   1,238   66   713   459   7,048   5,370   713   965   8,628   3,260   -­‐   5,368   328   -­‐   328   -­‐   364   -­‐   364   -­‐  

 

 

 

47  

Summary:  Mobile  Marketing  Communications  by  Industry  
Table  22:  Total  Mobile  Marketing  Expenditure  by  Industry   $  Millions   TOTAL   Resources  (Agriculture,   Mining,  Utilities,   Construction)   Manufacturing,  Consumer   Packaged  Goods   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  Consumer   Packaged  Goods   Retail  Trade,  Other   Transportation  and   Warehousing     Information     Finance,  Insurance,  Real   Estate   Professional,  Scientific,  and   Business  Services     Educational  Services     Health  Care  and  Social   Assistance     Arts,  Museums,  Sports,  and   Recreation     Accommodation  and  Food   Services     Other  Services   Government   Source:  mLightenment   2010  
2,405  

2011  
3,957  

2012  
6,693  

2013  
10,456  

2014  
15,162  

2015  
19,806  

CAGR  
52.5%  

42   139   269   72   107   397   93   240   470   152   20   56   17   68   145   116  

74   227   471   119   171   648   156   389   784   245   36   95   27   110   227   179  

132   382   842   202   281   1,082   266   648   1,332   407   64   164   44   181   371   294  

218   597   1,373   322   433   1,676   422   991   2,080   632   105   265   67   281   562   432  

323   867   2,023   473   625   2,425   612   1,401   3,032   903   156   396   95   403   807   622  

446   1,123   2,691   630   804   3,164   814   1,778   4,017   1,163   204   539   120   512   1,028   771  

60.6%   51.8%   58.5%   54.3%   49.8%   51.4%   54.4%   49.2%   53.6%   50.1%   58.5%   57.4%   47.9%   49.8%   47.9%   45.9%  

 

 

 

48  

Mobile  Marketing’s  Sales  Impact     on  the  U.S.  Economy  
Our  headline  finding  from  our  econometric  analysis  is  that  mobile  has  a  very  substantial  and   positive  sales  impact  on  the  output  of  U.S.  economy,  amounting  to  almost  $140  billion  in   additional  sales  realized  during  the  course  of  2012.  This  figure  is  forecast  to  rise  to  just  over   $400  billion  in  2015.  2015’s  amount  represents  a  vigorous  five-­‐year  compound  annual  growth   rate  of  52%,  relative  to  the  $48  billion  in  net  sales  that  mobile  added  to  the  U.S.  economy  back   in  2010.        
Table  23:    Total  Net  Sales  Driven  by  U.S.  Mobile  Marketing  
$  Millions   Total  Mobile  Mktg  Sales   Impact   Mobile  Ad  Sales  Impact   Mobile  DR  Sales  Impact     Mobile  CRM  Sales  Impact   2010   2011   2012   2013   2014   2015   CAGR  

48,627   25,530   2,705   20,392  

85,300   46,814   5,694   32,792  

139,003   73,811   10,280   54,912  

216,931   115,010   18,866   83,056  

311,566   163,052   30,059   118,455  

400,971   204,345   36,682   159,943  

52%   52%   68%   51%  

Source:  mLightenment  

  To  appreciate  just  how  significant  mobile  marketing’s  contribution  to  the  US  economy  already   is,  and  will  continue  to  be,  some  context  may  be  helpful.           As  can  be  seen  from  the  following  table,  already  in  2012,  mobile  marketing  contributed  almost   a  half  percentage  point  to  total  U.S.  output,  when  measured  against  the  base  of  $33  trillion   dollars  in  total  U.S.  sales.  (Total  sales  differ  from  GDP  in  that  the  latter  measures  only  those   sales  that  represent  final  demand;  total  sales  include  intermediate  B-­‐to-­‐B  sales  as  well.)    
Table  24:    Mobile  Marketing  Sales  Impact  Compared  with  Total  U.S.  Sales  
 

2010   48,626.7   0.16%  

2011   85,299.9   0.27%  

2012   139,003.2   0.42%  

2013   216,931.1   0.63%  

2014   311,565.9   0.86%  

2015   400,970.9   1.05%  

Total  US  Sales   Mobile  MarCom  Sales   MMarCom  as  %  Tot  US  Sales   Source:  mLightenment  

30,169,415   32,108,753   33,366,991   34,621,501   36,218,068   38,102,218  

  Later  in  this  section  we  will  compare  estimates  of  mobile’s  visible  “mCommerce”  [online]  sales   with  the  less  visible  total  of  offline  sales  to  show  that  over  90%  of  mobile’s  boost  to  the   economy  occurs  in  physical,  “brick  and  mortar”  locations,  sometimes  without  the  purchaser   even  having  her  mobile  phone  in  hand.          
  49  

But  wherever  they  occur,  these  hundreds  of  billions  of  dollars  in  sales  represent  output  that  the   U.S.  economy  would  not  enjoy,  were  it  not  for  industry  expenditure  on  mobile  marketing   communications.  No  less  importantly,  the  increased  sales  output  contributed  by  mobile   marketing  of  goods  and  services  benefit  all  16  major  industry  groups  of  the  US  economy,  with   substantial  increased  sales  accelerating  economic  growth  throughout  all  regions  of  the  country.    

Behind  the  Numbers:  America’s  Love  Affair  with  Mobile  
To  explain  mobile’s  significant  contribution  to  the  U.S.  economy,  one  must  begin  with  the   obvious:  as  ever  more  powerful  and  versatile  smart  devices  have  captured  more  and  more  of   the  population’s  time,  attention,  and  even  creativity,  they  have  become  more  central  as  a   conduit  of  our  buying  power,  making  mobile  connectivity  increasingly  indispensable  in   marketing  and  commerce.   Evolving  Devices  and  Networks  Fuel  Growing  Mobile  Adoption  and  Use     From  all  available  statistics,  it  is  clear  that  among  end-­‐customers,  mobile  adoption  is  now  on  an   accelerated  maturing  phase.    Since  2010,  we  have  seen  more  mobile  phones  sold  than  laptops   and  PCs.  And  no  less  importantly,  the  tablet  and  its  fraternal  twin,  the  e-­‐reader,  have  become   popular  sensations  in  their  own  right.      
Table  25:    US  Wireless  Devices  -­‐  Units  Sold  by  Customer  Type  

Source:    IHS  Global  Insight  

 

  As  seen  in  the  chart  above,  2010  showed  a  significant  spike  in  mobile  devices  sold.  This  growth   includes  consumers  as  well  as  business  users,  as  companies  became  significantly  more  invested   in  providing  their  employees  with  the  latest  devices  that  year.  (It  is  important  to  note  media  

 

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consumption  patterns  for  corporate  employees,  given  the  very  substantial  role  played  by   intermediate  B-­‐to-­‐B  sales  within  total  US  sales.56)       Growing  Device  Functionality,  Better  Network  Access     Just  as  many  mobile  users  celebrate  added  features  and  a  richer  mobile  experience,  marketers   too  can  celebrate,  because  added  functionality  means  a  potentially  richer  marketing   communication  opportunity.  It  also  seems  to  lead  to  greater  adoption  and  more  attention  from   users.       Consider  how  different  the  mobile  world  looked  a  mere  eight  years  ago,  in  2005.    Cellphone   sales  were  still  overwhelmingly  dominated  by  the  most  basic,  voice-­‐only  models.  “Smartphone”   primarily  meant  small-­‐screen,  email-­‐ready  devices  like  the  Blackberry,  and  tablets  as  a  category   did  not  yet  exist.  But  2010,  the  year  of  the  smartphone,  changed  that,  and  2013  will  almost   certainly  be  seen  in  retrospect  as  the  year  of  the  tablet—the  year  it  displaces  the  feature  phone   from  its  number-­‐two  market  position,  as  seen  in  the  chart  below.57  These  represent  real   milestones  for  mobile  marketers,  as  mobile  devices  come  into  their  own  with  consumers  and   business  users  alike.      
Table  26    US  Mobile  Device  Sales  by  Type  

Source:    IHS  Global  Insight  

 

                                                                                                             
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 In  fact,  intermediate  sales  normally  make  up  almost  two-­‐thirds  of  total  US  sales,  unlike  in  GDP,  where  final   demand  by  consumers  amounts  to  about  70%  of  the  total.     57  Flurry  reported  17.4  million  new  iOS  and  Android  devices  were  activated  on  Christmas  day,  a  255%  increase   from  6.8  million  on  Christmas  Day  2011.  http://blog.flurry.com/bid/92719/Christmas-­‐2012-­‐Shatters-­‐More-­‐Smart-­‐ Device-­‐and-­‐App-­‐Download-­‐Records     51  

But  advances  in  device  power  would  mean  little  if  not  accompanied  by  improved  network   speed  and  availability.  Today,  it  is  almost  a  given  that  wherever  the  mobile  consumer  roams— from  airports  and  gyms  to  homes  and  offices—she  will  find  a  good  cellphone  signal  or  a  Wi-­‐Fi   access  point,  or  hotspot.58  Growth  of  these  access  points  for  use  with  smartphones  and  tablets   is  a  factor  in  determining  how  widely  mobile  device  (especially  tablets)  can  “roam”  and  how   intensively  they  can  be  used  to  consume  media.59         Not  long  ago,  it  was  estimated  that  70%  of  tablets  weren’t  linked  to  a  cellular  data  plan,  and  so   mostly  used  at  home,  leading  some  to  question  whether  they  weren’t  perhaps  more   convenient  laptops.  But  as  4G  and  LTE  networks  become  available,  more  tablet  owners  are   opting  to  connect  their  devices  to  mobile  broadband  subscriptions,  in  addition  to  Wi-­‐Fi   networks.  Thus  it  is  highly  likely  that  the  share  of  mobile  broadband  traffic  seen  over  tablets   will  rapidly  increase  and  may  eventually  reach  levels  consummate  with  mobile  phones,60   implying  the  tablet  will  have  become  truly  mobile.     Mobile’s  Growing  “Share  of  Mind”     A  related  factor  is  mobile’s  efficiency  in  penetrating  a  target  demographic.  This  might  be  called   the  media  platform’s  “share  of  mind”  within  the  population  at  large,  or  specific  demographic   groups.  As  a  general  rule  of  thumb,  the  more  narrowly  an  audience  concentrates  its  attention   span  on  a  given  media,  the  more  likely  it  is  that  their  share  of  advertising-­‐influenced  purchases   can  be  attributed  to  that  media.61  In  other  words,  as  a  media’s  share  of  mind  grows,  so  may  its   share  of  wallet.  Note  below  the  increase  in  reach  for  mobile,  as  the  equivalent  for  other  media   appears  to  be  declining.      
Table  27:    Population  Reach  of  US  Media  
  Television   Desktop  PC   Radio   Share  of  U.S.  Adult  population  reached*  by  different  media,  2010  vs.  2012   2010   89.5%   62.5%   60.6%   2012   88.3%   58.1%   58.8%   Chg   -­‐1%   -­‐4%   -­‐2%  

                                                                                                           
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 CTIA  reports  cell  tower  saturation  reached  285,561  in  2012,  up  from  210,360  in  2007.     http://www.ctia.org/advocacy/research/index.cfm/aid/10323.      Numerous  alliances  of  cable  operators  and   Internet  service  providers  and  wireless  operators  have  begun  adding  tens  of  thousands  of  WiFi  hotspots  in  major   US  cities.  “Cable  Giants  Open  50,000  Wi-­‐Fi  Hotspots.”    InformationWeek  Mobility.  May  21,  2012.   http://www.informationweek.com/mobility/wifi-­‐wimax/cable-­‐giants-­‐open-­‐50000-­‐wi-­‐fi-­‐hotspots/240000695     59  comScore,  “2012  Mobile  Future  in  Focus,  Key  Insights  from  2011  and  What  They  Mean  for  the  Coming  Year,”   February  2012,  www.comscore.com.   60  comScore,  ibid.   61  In  a  similar  vein,  marketers  and  other  experts  often  compare  the  expected  sales  impact  of  media  using  a   common  denominator  of  “time  spent”  by  end-­‐customers.  Mary  Meeker,  a  much-­‐followed  media  analyst  on  Wall   Street,  has  suggested  on  this  basis  that  there  is  a  $20  billion  dollar  “gap”  between  the  great  amount  of  time   consumers  are  spending  with  mobile,  and  the  much  smaller  share  of  budgets  marketers  are  allocating  to  it.           52  

Newspapers   Magazines   Mobile  Device  

38.6%   28.6%   84.2%  

36.1%   24.8%   89.0%  

-­‐3%   -­‐4%   +5%  

Author  estimates  compiled  from  Statista,  Pew,  comScore,  Nielsen.  Note  that  percentages  are  not  strictly   comparable  as  sources  define  media  penetration  or  adult  population  differently.    

Looking  more  narrowly  at  just  digital  device  penetration,  it  seems  fairly  clear  that  a  pattern  is   emerging  in  which  nearly  everyone  will  have  an  all-­‐purpose  go-­‐everywhere  device,  the   smartphone  (still  termed  here  the  cellphone);  while  some  people  will  augment  it  with  another   optional  device:  a  lap-­‐top  for  office  workers,  an  eReader  for  the  weekend  leisure  class,  etc.      
Table  28:    US  Device  Ownership  Trends  
100%   90%   80%   73%   75%   70%   68%   65%   60%   50%   37%   40%   30%   30%   34%   20%   20%   10%   0%  
85%   64%   47%   45%   41%   42%   19%   19%   10%   3%   5%   9%   4%  8%   88%  88%  89%  85%  85%  87%   87%   61%   58%   25%   18%   18%   42%  43%   29%  31%   26%   24%  

82%   62%   52%  

83%   84%   57%  

Cell  phone   Desktop   computer   Laptop   computer   mp3  player   Game  console   e-­‐Book  reader   Tablet   computer  

57%   56%   55%  

2%  

Source:  Pew  Internet  and  American  Life  Project  

 

  Some  studies  show  that  mobile  is  in  some  instances  directly  cannibalizing  audiences  from   traditionally  important  media  platforms  and  devices  –  first  the  landline,  then  print,  now   perhaps  even  the  PC  and  the  laptop.    
Table  29  Rates  at  Which  Smartphones  and  Tablets  Are  Replacing  Other  Devices  and  Media       Clock/Alarm   Organizer   Music  Player   Landline  Phone   Newspaper   Books   PC  Computer   Smartphone   65%   55%   52%   35%   33%   14%   5%   Tablet   22%   45%   34%   6%   62%   51%   20%  

%  of  respondents  indicating  each  product  had  been  replaced  by  their  smartphone  or  tablet     53  

Source:  IDG,  2012  

Mobile  Media  Usage:    Technology  Folkways  and  Location  Micro-­‐Climates   Beyond  consideration  of  access  to  device  type,  speed,  and  the  substitutions  and  complements   with  other  media,  one  must  look  within  the  individual  mobile  media,  to  see  how  much  of  the   population  uses  them,  when,  where,  and  how.    
Table  30  Mobile  Phone  Content  and  Behavior  Trends  
80   70   60   50   40   30   20   10   January   March   May   July   September   November   January   March   May   July   September   November   January   March   May   July   September   November   0  
Used   Downloaded   Apps   Accessed  Social   Networking  Site   or  Blog   Listened  to   Music  on  Mobile   Phone   Played  Games   Sent  Text   Message  to   Another  Phone   Used  Browser  

2010  

2011  

2012  

Source:  comScore  Reports  November  2012  U.S.  Mobile  Subscriber  Market  Share,  2012,   www.comScore.com

 

  Consumer  access  to  marketing  communications  will  also  reflect  the  soft  variables  of  consumers’   mindsets  for  using  the  different  media  available  on  their  tablets  or  smartphones  in  different   social  contexts  and  locations  at  different  times  -­‐-­‐  their  folkways  and  the  specific  geographic   mobile  marketing  “micro-­‐climates”  in  which  they  find  themselves.      And  naturally  enough,  these   will  differ  among  key  demographics.       What  applies  to  mobile  media  and  content  applies  also  to  engagement  with  mobile  marketing,   whether  it  be  participation  in  a  short  code  SMS  campaign,  or  using  marketer  apps.       Consider,  for  example,  the  difference  in  consumer  folkways  in  tablet  and  smartphone  usage.     On  the  one  hand,  tablets  appear  to  be  more  conducive  to  longer  immersion  with  rich  long-­‐form   media:  consumers  are  streaming—nay,  gulping—video  on  their  cable  company  app—the  

 

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famous  "lean  back"  mode  so  beloved  of  television  advertisers.    And  by  accounts  they  seem   more  accepting  of  creative  rich-­‐media  ads  with  their  longer  download  times.     Yet  in  terms  of  access  to  and  engagement  with  mobile  marketing  is  concerned,  users’  ability  to   engage  with  rich  media  on  tablets  will  also  be  affected  by  the  quality  of  Internet  access  in  their   micro-­‐climate:  on  a  Wi-­‐Fi-­‐only  tablet,  mobile  ads  may  not  be  visible  to  consumers  reading  their   “newspaper”  electronically  on  a  commuter  train,  or  if  the  cellular  connection  is  slow,  they  are   less  likely  to  tolerate  “latency”  -­‐  the  delay  in  loading  in  loading  content  caused  by  ad-­‐serving.62     In  contrast,  marketing  communications  on  a  smartphone  are  more  likely  to  be  consistently   accessible,  thanks  to  the  cellular  connection  that  comes  with  the  device.    But  when  using  their   smartphone  in  a  shopping  mall,  the  consumer  is  more  likely  to  be  in  a  “on-­‐the-­‐go,  need-­‐it-­‐now,   no  time  for  distractions”  mindset:  they  are  in  “lean  forward”—or  rather,  head-­‐down—mode.    In   this  mode,  a  task-­‐oriented  app  utility  may  be  far  more  likely  to  attract  eyeballs  than  a  rich   media  ad  placed  in  a  video.    And  yet  if  the  smartphone  app  utility  depends  on  GPS  to  show  the   consumers’  current  connection,  it  may  not  work  properly  inside  a  covered  space  where  the   satellite  signal  can’t  penetrate.   The  “Buying  Power”  Advantage  of  the  Mobile  Marketing  Audience   Mobile  device  ownership,  (especially  of  the  most  advanced  devices),  media  consumption,  and   marketing  engagement  have  historically  skewed  towards  younger,  wealthier  demographics.  The   resulting  buying  power  premium  among  mobile  subscribers,  and  especially  among  early   adopters  of  smartphones  and  tablets,  is  another  contributing  factor  to  the  high  sales  impact  of   all  forms  of  mobile  marketing  observed  in  this  study.  However,  this  demographic  “premium”   will  not  last  much  longer.  Adoption  rate  data  suggests  the  profile  of  the  smart-­‐device  owner  will   gradually  regress  to  the  mean  of  the  general  US  population  over  the  next  few  years,  particularly   as  operators  and  manufacturers  subsidize  the  cost  of  smartphones  and  tablet  devices.      
Table  31  Mobile  Media  Usage  by  Age  and  Income  Group   2012  Demographics   Mobile  Internet   All   Age   18-­‐29   30-­‐49   50-­‐64   65+   Income   <$30,000     64%     94%   88%   74%   49%     54%   79%     83%   82%   67%   47%     85%   73%     92%   95%   87%   76%     32%   Email   Cell  Phone   Smartphone   89%     66%   55%   30%   17%     26%   46%     36%   44%   20%   18%     18%   Tablets   E-­‐readers   31%     28%   32%   20%   19%   26%  

                                                                                                           
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 The  dramatic  increase  in  free  Wi-­‐Fi  hot-­‐spots  and  the  growing  number  of  tablets  with  mobile  broadband   subscriptions  will  likely  make  this  specific  issue  less  important  over  time.     55  

$30,000-­‐$49,999  

84%  

76%  

89%   97%   97%  

46%   51%   64%  

24%   30%   50%  

23%   33%   37%  

$50,000-­‐$74,999   91%   86%   $75,000+   96%   92%   Source:    Pew  Internet  and  American  Life  Project

Sales  Impacts  of  Mobile  Media  Advertising  
The  story  of  the  sales  impact  of  mobile  marketing  communications  really  needs  to  be  analyzed   in  its  three  separate  components  to  appreciate  its  underlying  dynamics:;  in  the  next  sub-­‐ section,  mobile’s  transformative  impact  on  non-­‐mobile  media;  in  our  third  sub-­‐section,  and   most  importantly,  the  unheralded  power  of  app-­‐driven  mobile  CRM.         But  first,  the  surprising  impact  of  mobile  advertising.       We  can  begin  to  measure  mobile  advertising’s  surprising  importance  by  looking  at  the   contribution  mobile  advertising  made  to  U.S.  economic  performance  and  comparing  that  to  the   contribution  made  by  US  advertising  in  general.       As  can  be  seen  in  the  table  below,  advertising  in  all  media  contributed  $2.2  trillion  to  the  US   economy  last  year,  meaning  it  expanded  total  U.S.  output  by  a  hefty  6.5%.  Of  advertising’s   overall  contribution  of  $2.2  trillion,  mobile  advertising’s  share  was  3.4%,  or  $73.8  billion.            
Table  32  Mobile  Advertising  Sales  Impact  vs.  Total  U.S.  Sales  and  All  Advertising  Sales  Impacts   $  Millions   TOTAL  Ad  Sales  Impact   Total  Ad  Sales  As  %  Total   US  Sales   Mobile  Ad  Sales  Impact   2010   2,104,883   6.98%   25,530   2011   2,138,261   6.66%   46,814   2012   2,191,962   6.57%   73,811   3.37%   2013   2,204,700   6.37%   115,010   5.22%   2014   2,266,706   6.26%   163,052   7.19%   2015   2,320,707   6.09%   204,345   8.81%  

Mobile  Ad  Sales  as  %  of   1.21%   2.19%   Ad  Sales   Source:  mLightenment  and  IHS/Global  Insight  

Mobile  Display  Advertising’s  Lift  from  Comparative  Brand  Lift  Studies   Are  mobile  advertising’s  large  net  sales  impacts  on  the  U.S.  economy  consistent  with  what  is   being  seen  by  researchers  who  look  at  advertising’s  effectiveness  for  firms  and  consumers?  To   answer  that  question,  we  looked  at  publicly  available  information  from  brand  lift  studies,  which   for  decades  has  been  the  primary  research  tool  of  brand  advertisers  seeking  to  know  whether   their  advertising  “works.”  

 

56  

In  comparative  brand  lift  studies  across  media,  mobile  advertising  appears  to  perform  better   than  other  media.  Insight  Express,  one  of  the  leading  research  practitioners  of  brand  lift  studies,   reported  in  2011  that  the  “deltas”  of  mobile  advertising  exceeded  those  of  advertising  in  print,   online,  and  TV,  by  a  wide  margin—by  a  multiple  that  ranged  from  two  and  a  quarter  times  for   print,  to  over  four  times  for  online.63  
Table  33  Comparative  Brand  Lift  By  Advertising  Media     Print     Online     TV     Mobile     Unaided   0.9%   2.3%   0.5%   8.2%   Awareness   Aided   3.5%   2.8%   4.2%   8.4%   Awareness   Message   2.6%   3.3%   4.6%   15.0%   Association   Brand   8.8%   2.0%   5.5%   7.6%   Favorability   Purchase  Intent   6.4%   2.2%   5.6%   11.3%   AVERAGE*   4.4%   2.5%   4.1%   10.1%   Mobile  Multiple   2.27     4.08   2.47     Source:    InsightExpress’  Cross  Media  Norms   http://www.quirks.com/articles/2011/20110707.aspx?searchID=203320904&sort=5&pg=1  

  Very  similar  findings  regarding  mobile’s  superior  performance  in  brand  impact  measures  have   been  reported  by  Dynamic  Logic,  the  subsidiary  of  leading  brand  performance  research  firm   Millward  Brown,  which  has  reported  that  mobile’s  superior  lift  measures  outperform  those  of   online  by  well  over  three  and  a  half  times.64    
Table  34:    Comparative  Brand  Lift  by  Advertising  Media:    Online  vs.  Mobile     Online   Mobile   MULTIPLE   Aided  Brand   2.10%   4.80%     Awareness   Ad  Awareness   4.00%   17.30%     Message  Association   2.20%   10.00%     Brand  Favorability   1.30%   3.80%     Purchase  Intent   1.20%   4.30%     AVERAGE*   2.16%   8.04%   372.2%   Source:    *Author  Calculation.    Source:  Dynamic  Logic      

                                                                                                             
63

 Joy  Liuzzo,  “If  You  Aren’t  Using  Mobile  to  Advertise,  You’re  Wasting  Money,”  September  1,  2011,   http://blog.insightexpress.com/2011/09/aren%E2%80%99t-­‐mobile-­‐advertise-­‐you%E2%80%99re-­‐wasting-­‐money/   64  Millward  Brown,  “Digital  Media  Planning:  some  evidence  based  guidelines,”   http://www.millwardbrown.com/Libraries/MB_Articles_Downloads/Millward_Brown_Media.sflb.ashx     57  

What  do  researchers  and  agencies  make  of  mobile’s  superior  performance  on  advertising  and   brand  lift  metrics?    Two  principal  hypotheses  have  been  offered  in  support,  and  a  completely   different  source  of  evidence  is  offered  on  the  opposite  side  of  the  scales.       First,  the  support.       Mobile’s  More  Hospitable  Ad  Environment.    Not  withstanding  mobile’s  small  screen  size,  lack  of   JavaScript,  and  its  hurried,  task-­‐oriented  viewership,  the  argument  is  made  that  today’s   smartphone  and  (especially)  tablet  offer  a  superior  environment  for  display  of  advertising  than   does  the  PC  Internet.    What  the  screen  lacks  in  size,  it  makes  up  for  in  proximity,  so  it  fills  the   viewer’s  field  of  vision  to  the  same  extent  as  would  a  typical  TV  when  viewed  from  the   proverbial  living  room  sofa,  and  so  offers  a  comparable  intimacy  and  “immersiveness.”    And,  as   with  TV,  the  mobile  viewing  typically  sees  only  one  ad  at  time,  unlike  the  PC  Web,  where   content  can  be  surrounded  by  a  hodge-­‐podge  of  competing  and  often  discordantly  colored  and   moving  ads—assuming  they  are  even  seen  at  all.65       The  Power  of  "Hyper-­‐local."      Relevance  can  be  thought  of  as  “what  hits  close  to  home.”    In  the   PC  Internet,  and  broadcast  TV  and  Radio,  local  can’t  be  much  more  precisely  targeted  than  the   fixed  geography  of  an  entire  city  or  county—aka,  “the  DMA.”  But  with  mobile,  the  excitement  is   about  the  option  to  target  at  the  “hyper-­‐local  level”  (right  down  to  the  city  block,  thanks  to   GPS)  and  precisely  customize  the  advertising  to  whatever  is  going  on  around  the  mobile  user  at   that  moment.  The  Weather  Company,  for  example,  offers  the  opportunity  to  target  based  on   local  weather  conditions.  Mobile  lets  local  be  defined  as  the  location  of  the  consumer  at  a  given   moment  (a  radius  of  X  miles  around  the  individual  consumer).  Similarly,  mobile  geo-­‐fenced  ad   targeting  via  mobile  allows  traditional  retail  categories  to  deploy  personal  targeted  point-­‐of-­‐ purchase  advertising  (e.g.,  a  city  restaurant  can  offer  a  discount  or  coupon  to  anyone  within  3   blocks)  or  to  deploy  in-­‐store  advertising.    This  makes  mobile  advertising  more  contextually   relevant,  and  closer  to  bottom  of  the  sales  funnel  point-­‐of-­‐purchase  advertising,  which  is  well   known  to  be  effective.66       In  our  view  the  brand  lift  evidence  is  certainly  suggestive,  but  should  treated  cautiously.    With   far  fewer  surveys,  and  widely  variable  results  across  too  few  brand  categories,  it  is  unlikely  the   results  are  really  as  robust  as  they  appear  to  be—and  even  if  they  are  valid  now,  they  are   unlikely  to  remain  to  positive  for  mobile  once  the  mobile  and  non-­‐mobile  populations   converge.     Mobile  Performance  Advertising:  The  Unconverted.     On  the  other  side  of  the  scales,  marketers  reluctant  to  jump  into  mobile  often  look  no  further   than  mobile  advertising  sold  on  a  performance  basis.  Concerning  the  pricing  and  performance                                                                                                              
65 66

 Joy  Liuzzo,  ibid.    There  is  some  residual  skepticism  about  how  many  mobile  publishers  and  ad  networks  can  actually  deliver   hyper-­‐local  mobile  ads  at  the  claimed  level  of  granularity.    Barriers  to  hyper-­‐local  targeting  include  caching,   connectivity,  latency,  and  lack  of  consumers  allowing  access  to  their  current  location.       58  

of  search  ads,  there  are  many  published  reports  and  blogs  in  which  digital  marketers  wring  their   hands  about  mobile’s  very  low  eCPMs  relative  to  those  seen  in  the  traditional  PC  Internet  (to   speak  nothing  of  the  actual  CPMs  seen  in  traditional  “real  world”  advertising),  fueled  in  part  by   mobile’s  apparently  “shockingly  low”  conversion  rates.         If  mobile  search  advertising  were  so  effective,  the  argument  goes,  conversion  rates  and  eCPMs   would  be  higher;  and  yet,  less  effective  though  it  may  be,  it  is  seemingly  gaining  ground  on   mobile  display  (CPM)  advertising.       If  data  in  the  following  table  is  representative—and  it  may  not  be—marketers  in  2012  were   paying  about  four  times  more  per  weighted  clicks  in  traditional  PC  search  than  they  were  for   clicks  in  a  smartphone  search.  Why  is  this?    And  does  this  apparent  price  disadvantage  of   mobile  in  the  market  place  indicate  that  mobile  advertising  is  in  fact  not  as  impactful  as  our   data  would  suggest?      
Table  35:    Implied  CPMs  of  Online  vs.  Mobile  Search  Advertising       Total   Mobile  Subtotal   PC   Mobile     Smartphone   Tablet   Budget  Share*   87%   13%   7%   6%   Click  Share   82%   18%   10%   7%   Clicks  yielded  per  budget  dollar  (Derived)   0.95   1.33   1.48   1.16   Cost  per  click   0.77    0.56     0.50   0.63   cost  per  weighted  click  (Derived)     0.811   0.420   0.341   0.544   Click-­‐thru-­‐rate  (CTR)   0.022    0.04     0.051   0.032   Implied  Weighted  eCPM  (Derived)   $371.80   $97.36   $66.90   $170.03   *Interpretation:    13%  of  Search  advertising  budgets  went  to  mobile  in  total,  with  7%  of  the  total  to   Smartphone,  etc.  Source:  author  calculations  based  on  Marin  Software,  US  Online  Advertising  Report:   Key  Trends  And  Insights,  Q1-­‐Q3  2012  

  To  explain  pricing  and  performance  patterns  such  as  those  shown  here,  several  interpretations   have  been  advanced.       The  Mobile  False  Spring.  It’s  possible  that  a  spirit  of  new-­‐gadget  enthusiasm  and  curiosity  is   leading  some  people  click  on  the  many  new  rich  media  ad  formats  to  see  what  they  do,  not   because  of  any  genuine  interest  in  the  product.  A  similar  phenomenon  was  seen  over  a  decade   ago  on  the  PC  Internet,  where  the  first  PC  banner  ads  and  pop-­‐ups  and  roadblocks  experienced   extremely  high  click-­‐through  rates.     The  Scourge  of  the  Fat  Finger.    There  is  some  evidence  that  consumers’  “fat  thumbs”  have   difficulty  navigating  the  smartphone’s  small  screens,  causing  them  to  tap  on  some  mobile  ads   by  accident.67    This  hypothesis  may  be  partially  confirmed  by  the  introduction  of  newer  ad  units                                                                                                              
67

 Will  Oremus  “Why  Do  People  Click  On  Smartphone  Ads?  Because  They  Have  Fat  Fingers.”  Slate.com   59  

 

by  networks  such  as  Google  that  are  specifically  designed  to  ensure  that  a  tap  on  a  mobile  ad   represents  the  users’  intent.       Lack  of  “Live”  Readers.  Wi-­‐Fi-­‐only  tablet  users  often  download  magazine  or  newspaper  content   when  they  are  in  a  hotspot,  but  then  read  it  later,  when  they  aren’t.    Without  a  live  Internet   connection,  many  things  go  wrong:  rich  media  may  not  work;  the  consumer  can't  click  on  the   ad  to  get  more  information,  marketers  can’t  receive  social  media  engagement  or  feedback  from   their  ads.       Mobile  Tracking  and  Targeting  Issues.  A  critical  component  of  the  effectiveness  of  mobile   marketing  communications  is  the  efficiency  with  which  data  can  be  used  to  identify  and   communicate  with  audiences  most  likely  to  buy  the  advertiser’s  product.    The  mobile   ecosystem  denies  marketers  some  of  their  favorite  tools  from  desktop  computing,  with  cookie-­‐ based  behavioral  targeting  as  “Exhibit  A.”  68  In  the  “traditional”  world  of  online  PC-­‐based   advertising,  third-­‐party  “cookies”  placed  in  site-­‐visitors’  browsers  by  ad  networks  has  been  the   basis  for  aggregating  interest-­‐based  profiles  of  online  consumers  for  targeting  purposes.  But  in   the  mobile  space,  third-­‐party  cookie-­‐based  approach  isn’t  technically  replicable,  especially  for   the  much  sought-­‐after  iOS  device  users.  Stand-­‐ins  for  third-­‐party  cookies  and  related  privacy   controls  are  very  experimental  but  are  beginning  to  draw  heightened  interest.     In  our  view,  the  greater  factor  keeping  demand  for  mobile  advertising  low  is  likely  that  agencies   and  their  clients  have  far  more  metrics  and  analytics  for  desktop  than  they  do  for  mobile.  Thus   agencies  and  their  clients  are  more  comfortable  with  PC  and  the  ROI  data  they  have.    Very  few   budgets  outside  of  search  or  direct  response  are  built  upon  clicks,  relying  more  on  CTRs,   engagement/time  spent  and  ROI.    And  though  the  trend  relies  on  only  a  few  quarters  of  data,  it   appears  that  mobile  CPMs  and  eCPMs  are  beginning  to  move  up  steadily,  as  more  marketers   begin  to  bid  for  mobile  inventory.       In  the  end,  it  may  be  that  brand  lift  and  taps  and  tap-­‐thru  rates  in  performance  can  be   combined  to  tell  a  more  nuanced  story.    Yes,  mobile  advertising  may  indeed  be  quite  impactful   and  generate  positive  brand  perceptions  and  purchase  intent—but  where  are  those  sales  being   transacted?    The  performance  marketer  sees  that  conversions  aren’t  happening  on  her  website,   at  least  not  at  the  rate  she’d  like.    But  that  doesn’t  mean  mobile’s  sales  aren’t  happening   somewhere  else,  possibly  even  for  someone  else.  For  most  experienced  professionals  in  the   digital  universe,  the  click—or  as  it  is  known  in  the  mobile  world,  the  tap—is  recognized  as  a   weak  indicator  of  true  ad  performance,  even  when  the  performance  campaign  seems  to  be                                                                                                                                                                                                                                                                                                                                                              
Friday,  Oct.  5,  2012   http://www.slate.com/blogs/future_tense/2012/10/05/mobile_advertising_smartphone_ad_clicks_due_to_small _buttons_fat_fingers.html   68  The  question  of  the  actual  effectiveness  of  behavioral  targeting  is  still  contested  and  under-­‐researched,  at  least   as  far  as  publicly  available  studies  are  concerned.    The  most  famous  study,  by  former  FTC  Commissioner  Howard   Beales,  and  sponsored  by  the  Network  Advertising  Initiative  (NAI)  is  “The  Value  of  Behavioral  Targeting.”  Available   at:  http://www.networkadvertising.org/pdfs/Beales_NAI_Study.pdf       60  

working  well.  And  when  it  isn’t  working,  it  still  might  actually  be  working;  in  other  words,  a   mobile  user  may  have  been  in  your  competitor’s  store  when  they  saw  your  ad  and  decided  to   make  a  purchase—just  not  with  you.       So  the  conclusion  is  that  more  than  for  most  traditional,  static  media,  measuring  mobile’s  sales   impact  may  be  an  especially  slippery  moving  target.  The  trick  is  to  learn  how  to  think  about,   observe,  and  measure  mobile  more  broadly,  so  that  its  full  returns  are  captured.      

Mobile  Direct  Response  /  Enhanced-­‐Media  Impacts  
A  single  ad  in  a  single  touch  point,  a  single  shopper  in  a  single  store.  For  marketers  who  aren’t   “mobile  marketing  natives,”  this  phrase  summarizes  the  half-­‐conscious  “dis-­‐integrated”   paradigm  ruling  the  pre-­‐mobile  advertising  world.    In  the  mobile  world,  it  no  longer  holds  true.     And  in  the  rest  of  the  non-­‐mobile  media  the  mobile  consumer  is  beginning  to  sweep  it  away.         Integrations  With  Non-­‐Mobile  Media    Our  expenditure  research  persuaded  us  that  based  on  trial  programs  and  new  initiatives,   mobile  has  the  potential  to  be  the  most  integrated  medium  marketing  has  ever  seen.    So  our   question  on  the  sales  impact  side  was,  how  integrated  are  consumers?  And  is  there  reason  to   believe  that  “formal”  mobile  enhancements  yield  more  sales  impact  than  merely  mobile-­‐ accessing  of  non-­‐mobile  media  does?       (In  our  economic  model,  as  previously  explained,  media  sales  impacts  are  primarily  driven  by   consumers’  choice  of  media  by  which  to  access  or  engage  with  marketing  communications  of   any  kind.    If  a  consumer  were  to  type  the  URL  she  saw  in  a  newspaper  ad  into  her  mobile   browser  and  make  a  purchase,  the  sale  would  “count”  as  a  mobile-­‐accessed  newspaper  sales   impact.  If  she  had  typed  the  same  URL  into  her  PC  browser,  it  wouldn’t.  The  advertiser’s   “intent”  to  have  the  URL  be  read  by  one  device  over  the  other  is,  for  our  overall  sales  impact   calculation,  irrelevant.)       The  most  important  consumer  trends  for  accessing  non-­‐mobile  media  thus  far  in  both  Proximity   [Transmitted]  and  Recognition  [Scanned]  mobile  enhanced  non-­‐mobile  media  are:       NFC  Technology.  A  2011  report  by  Juniper  Research  forecasted  that  one  in  five  smartphones   worldwide  would  be  equipped  with  NFC  (Near  Field  Communications)  contactless  functionality   by  2014,  with  potentially  as  many  as  135  million  of  these  in  the  U.S.  market,  a  forecast  that   Juniper  later  revised  downwards  when  some  anticipated  device  launches  by  major  wireless   operators  failed  to  materialize  on  schedule.69  Though  Apple’s  failure  to  incorporate  NFC  into   the  iPhone  5  may  have  slowed  NFC,  support  for  NFC  on  the  Android  platform  remains                                                                                                              
69

 1  in  5  Smartphones  NFC-­‐enabled  by  2014.  Mobile  Marketing  Magazine.   http://mobilemarketingmagazine.com/content/1-­‐5-­‐smartphones-­‐nfc-­‐enabled-­‐2014     61  

significant,  with  Samsung  featuring  its  “hip”  NFC-­‐enabled  Galaxy  devices  prominently  in  ads   spoofing  “square”  buyers  of  the  NFC-­‐less  iPhone  5.    NFC  was  estimated  to  represent  10  to  15%   of  the  U.S.  marketplace  in  terms  of  aggregate  interactions.70      Though  there  is  apparently   considerable  uncertainty  about  what  NFC  actually  is  for  advertising  purposes  even  among   Americans  who  have  NFC  devices,  the  seamlessness  of  NFC  appears  to  compensate.    For   example,  in  a  recent  multi-­‐location  trial  in  the  US  Midwest,  Kraft  reported  that  consumer   engagement  using  the  NFC  “tap”  to  engage  with  its  marketing  content  exceeded  that  seen  from   the  QR  “snap”  by  a  wide  margin:  12  to  one  overall,  including  conversion  levels  and  total   engagement  time.71     Smart  [2D]  and  Standard  [1D]  Bar  Code  Recognition.  Issues  of  seamlessness  aside,  all  available   evidence  suggests  that  the  most  widely  recognized,  understood,  and  used  mobile  enhancement   technology  among  US  mobile  consumers  is  now  the  smart  [“QR”]  barcode,  whose  digital   checkerboard  has  become  both  more  ubiquitous  and  more  utilized  than  SMS  response   technologies  are  at  present.         In  late  2011,  about  20%  of  US  mobile  subscribers  had  scanned  a  QR  code,  according  to   comScore.72    A  recent  survey  released  by  Pitney  Bowes  indicated  that  19%  of  all  US  adults  had   now  scanned  a  QR  code.73    The  same  survey  suggested  that  between  three  and  four  out  of  10   Americans  between  18  and  34  years  old  reported  having  scanned  a  QR  code  in  each  of  posters,   magazines,  mail,  and  packaging,  and  between  10  and  20%  of  this  same  age  group  had  scanned   QR  codes  seen  on  websites,  emails,  or  on  TV.74       This  picture  of  QR  code  enhancements  to  non-­‐mobile  media  can  be  rounded  out  by  looking  at   QR  code  scanning  traffic.    According  to  the  ScanLife  Trend  Report,  there  were  more  than  16   million  mobile  barcode  scans  in  the  second  quarter  of  2012  with  more  than  5.3  million  scans  in   the  month  of  June.75      And,  the  ScanLife  Trend  Report  covering  the  two-­‐week  shopping  period   on  either  side  of  Black  Friday,  2012  showed  a  million-­‐scan  increase  (or  71%)  over  the   comparable  period  in  2011.         ScanLife  data  can  also  help  gauge  which  non-­‐mobile  media  are  being  mobile  enhanced.                                                                                                                
70

 Mikhail  Damiani,  CEO  of  mobile  marketing  agency  Blue  Bite,  quoted  in  Alex  Palmer,  NFC  on  the  Ascendant.   Direct  Marketing  News.  March  01,  2013  http://www.dmnews.com/nfc-­‐on-­‐the-­‐ascendant/article/281517/#   71  Alex  Palmer,  NFC  on  the  Ascendant.  Direct  Marketing  News.  March  01,  2013  http://www.dmnews.com/nfc-­‐on-­‐ the-­‐ascendant/article/281517/#   72  comScore   73  Pitney  Bowes  Survey:  27  Percent  of  Consumers  Age  18-­‐34  Say  They  Activate  Quick  Response  Codes.  January  15,   2013.  http://news.pb.com/press-­‐releases/pitney-­‐bowes-­‐survey-­‐27-­‐percent-­‐consumers-­‐say-­‐they-­‐activate-­‐quick-­‐ response-­‐codes.htm.  The  PB  press  release  also  cites  Forrester  Research  data  that  placed  QR  code  usage  among  US   adults  at  1%  in  2011  and  5%  in  2012.     74  Pitney  Bowes,  op.  cit.,  cited  in  eMarketer,  US  Ahead  of  Western  Europe  in  QR  Code  Usage.   http://www.emarketer.com/Article/US-­‐Ahead-­‐of-­‐Western-­‐Europe-­‐QR-­‐Code-­‐ Usage/1009631#4FpB5ArA5v9GxpXp.99   75  Mediapost.com,  "Mobile  Barcode  Scanning  Explodes",  8/20/2012,   http://www.mediapost.com/publications/article/181094/mobile-­‐barcode-­‐scanning-­‐explodes.html     62  

Table  36  Smart  barcode  Scanning:  Source  and  Location   QR  Code  source     Scan  Locations   Home     Retail  location   Out  of  doors   At  work   Grocery  Store   Restaurant     39%   20%   13%   13%   11%   4%     Printed  magazine  or  newspaper   30%   Product  packaging   21%   Website  on  PC   16%   Poster  or  flyer  or  kiosk   16%   Business  Card  or  brochure   5%   Storefront   5%   TV   5%   Source:  ScanLife  Trend  Report,  Q2,  2012  

   

 
Table   37:  2D  Code  Source  Among  Non-­‐Mobile  Media     Top  2D  Media  Placement   2012   2011   Packaging   1   1   Web   2   3   Direct  Mail   3   5   Magazines   4   2   In  Store   5   N/A   Source:  ScanLife  Trend  Report,  Q2,  2012  

   

 

Table  38:  Rank  of  QR  Code  Scans  By  Marketing  Industry  Publisher   Verticals   2012   2011   CPG   1   1   QSR   2   N/A   Entertainment     3   3   Retail   4   2   Wireless   5   5   Source:  ScanLife  Trend  Report,  Q2,  2012  

  Mobile  Voice.    Elsewhere  we  spoke  of  the  role  of  “share  of  mind”  as  an  underlying  factor  in   determining  the  impact  of  media.  One  of  the  most  pronounced  developments  has  been  the   demise  of  the  landline  phone,  especially  among  younger  demographics.  According  to  the  CTIA,   the  number  of  wireless-­‐only  households  leapt  from  10.5%  in  2007  to  35.8%  in  mid  2012.76    The   consequence  for  our  sales  impact  calculation  is  that  mobile  phones  inevitably  account  for  a   proportionately  increased  percentage  of  inbound  sales  calls  to  800  numbers  (here  counting   only  responses  to  calls-­‐to-­‐action  placed  in  non-­‐mobile  media).                                                                                                                    
76

 CTIA,  Wireless  Quick  Facts,  Mid-­‐Year  Figures,  http://www.ctia.org/advocacy/research/index.cfm/aid/10323   63  

 

Co-­‐consumption  with  Non-­‐Mobile  Media   We  next  we  consider  the  specific  extent  to  which  mobile’s  impact  is  erasing  the  idea  of  discrete,   clearly  defined  traditional  media  touch-­‐points,  especially  for  broadcast  and  cable  TV,  and  to  a   lesser  degree,  radio  and  Internet.     Studies  show  that  the  phone  and/  or  tablet  is  the  most  often  "used  with  other  mediums"   device. 86  percent  of  tablet  owners  and  88  percent  of  smartphone  owners  use  their  devices   while  watching  TV.77    71  percent  of  smartphone  users  that  see  TV,  press,  or  an  online  ad,  do  a   mobile  search  for  more  information.  78  TV-­‐style  content  and  major  programming  moves  to  the   tablet.    Most  TV  publishers  and  advertisers  have  recently  adjusted  to  a  dual  screen  world  and   are  synchronizing  their  TV  content  with  their  tablet  app  content.79       With  smartphones  and  tablet  in  hand,  mobile  consumers  are  re-­‐writing  the  rules  for   broadcasters  and  their  advertisers.    Though  mobile  might  at  first  be  considered  a  threat  to   audience  attention,  recent  thinking  has  turned  to  integrating  mobile  into  the  viewing   experience,  primarily  with  “secondary  content”  meant  to  be  downloaded  or  viewed  on  the   device  while  the  main  content  rolls  on  the  “big  screen.”  Apps  designed  to  complement  TV   viewing  such  as  Zeebox  and  GetGlue  reportedly  have  millions  of  downloads  each.80           Perhaps  more  significant  for  the  medium  term,  audio  scanning  is  already  having  a  significant   economic  impact  via  Shazam,  which  says  that  20%  of  all  iPhones  in  the  U.S.  used  Shazam  during   December  2012.    Shazam  users  are  currently  tagging  10m  songs,  shows  and  ads  a  day,  many  of   whom  also  tap  through  to  buy  tagged  content  worth  approximately  $300m  annually  from   digital  content  stores  such  as  iTunes  or  Amazon  MP3.         American  Idol,  in  a  similar  vein,  is  incorporating  mobile-­‐enabled  vote-­‐by-­‐tweeting  into  its  real   time  broadcasts,  and  the  participation  rate  is  almost  certain  to  be  very  high.    Combine  these  co-­‐ programming  trends  with  the  numbers  of  mobile  users  who  now  “Shazam”  their  favorite  TV   commercials—if  only  to  purchase  the  catchy  song—and  one  sees  the  old  Leave  It  to  Beaver   world  slipping  into  the  mists  of  the  50s.    

Mobile  CRM:    Apps  Unchained  
The  third  and  most  important  part  of  our  story  involves  the  media  that  is  the  not-­‐so-­‐hidden   power  behind  mobile  CRM.    If  the  story  about  mobile  CRM’s  economic  impact  was  written  in                                                                                                              
77

 Danyl  Bosomworth,  “Mobile  Marketing  Statistics  2013,”  Smart  Insights,  January  8,  2013,   http://www.smartinsights.com/mobile-­‐marketing/mobile-­‐marketing-­‐analytics/mobile-­‐marketing-­‐statistics/   78  Google/Ipsos  (US  consumer  Mobile  Movement  survey  April  2011)   79  Simon  Khalaf,  “Mobile  Apps:  We  Interrupt  This  Broadcast,”  Flurry.com,  December,  5,  2012,    http://blog.flurry.com/bid/92105/Mobile-­‐Apps-­‐We-­‐Interrupt-­‐This-­‐Broadcast   80  Stuart  Dredge,  “Shazam:  'TV  advertising  is  going  to  become  our  primary  revenue  stream.'”    Guardian  Apps  Blog,   posted  February  27,  2013.  http://www.guardian.co.uk/media/appsblog/2013/feb/27/shazam-­‐tv-­‐advertising-­‐future     64  

2010  it  would  be  a  tale  about  two  mobile  media—SMS  and  apps.  If  it  were  written  in  2015,  it   would  be  a  tale  of  just  one:  apps,  as  apps  would  have  far  outpaced  all  other  mobile  media.       What  makes  the  app  story—literally—so  impactful  from  an  economic  point  of  view?    How  so   from  the  point  of  view  of  society  and  marketers?       To  understand  why  the  conclusion  to  our  story  takes  three  sections  to  tell,  we  begin  by  looking   at  each  of  the  mobile  CRM  media  in  context.    As  we  do,  we  shall  see  several  key  themes  come   into  focus:    the  power  of  addressable,  one-­‐to-­‐one  communications;  the  power  of  location;  the   power  of  shopping;  and  above  all,  the  power  of  social.         Top-­‐Line  Mobile  CRM  Impact  
Table  39  Mobile  CRM  Sales  Impact  By  Media  
($  Millions)   TOTAL   Mobile  Voice     Mobile  Web     Mobile  Email     Mobile  Apps     2010   20,392   408   213   367   8,881   Mobile  Messaging     10,523   2011   32,792   656   13,056   1,069   1,124   16,886   2012   54,917   1,098   15,668   3,180   2,669   32,296   2013   83,056   1,661   15,827   7,419   4,642   53,506   2014   118,455   2,369   16,165   13,944   6,960   79,017   2015   CAGR  '15-­‐'10   159,943   3,199   15,425   20,079   9,541   111,700   51.0%   51.0%   7.9%   148.3%   91.8%   65.9%  

Source:  mLightenment  

SMS     But  it  is  with  messaging  that  the  story  of  mobile  as  a  CRM  medium  really  comes  into  focus.       SMS  has  blossomed  into  one  of  the  most  popular  ways  for  members  of  social  media  to  share   comments  on  products,  movies,  music  etc.    Much  of  this  is  due  to  Twitter,  far  and  away  America’s   most  successful  micro-­‐blogging  site,  whose  protocols  were  designed  specifically  to  fit  the  form   factor  of  SMS  on  mobile  devices.    Such  is  the  popularity  of  Twitter  that  Super  Bowl  XLVII  reportedly   saw  30.6  million  public  Tweets  and  Facebook  comments.    Of  these,  3.9  million  were  about  the   Super  Bowl’s  commercials,  reportedly  a  225%  increase  over  tweeted  commercials  the  prior  year.81       Such  “earned”  consumer-­‐generated  CRM  marketing  via  messaging  are  an  important  but  often   misunderstood  cause  of  mobile’s  high  sales  impacts.    Beyond  this  gratuitously  social  activity,   there  is  a  high  level  of  marketer-­‐sponsored  “owned”  engagement  with  consumers  via  ongoing   SMS  programs.  We  estimate  the  value  of  SMS  CRM,  owned,  messaging  by  beginning  with  the   total  volume  of  texts  sent  last  year  in  the  US:    2.2  trillion.  Of  this  total  something  on  the  order   of  8.7  billion  messages  were  marketing  program  emails  sent  to  opted-­‐in  subscribers,  mostly  by                                                                                                              
81

 Of  course,  though  not  all  these  social  comments  were  SMS,  on  mobile,  it  seems  safe  to  infer  that  a  substantial   portion  was.  https://bluefinlabs.com/blog/2013/02/04/top-­‐super-­‐bowl-­‐xlvii-­‐commercial-­‐in-­‐social-­‐tv-­‐rams-­‐farmer/     65  

brands  and  retailers.    Such  alerts  contained  everything  from  mobile  coupons  to  links  to  mobile   websites  to  prescription  reminders  to  advance  notices  of  sales  and  special  promotions.          
Table  40  Estimated  U.S.  Marketer  SMS  CRM  Message  Volume  
Millions  of  Messages   Est’d  Total  A2P  Msgs.   Less:  From  Publishers     Marketer  CRM  Msgs.   Retail  /  Brand  CRM   Travel  /  Accom.  CRM  

2011  
79,676   62,246   8,715   6225   2490  

2012  
101,881   74,509   13,686   9124   4562  

2013  
140,027   89,107   25,460   16367   9093  

2014  
177,732   101,562   38,085   25390   12695  

2015  
202,493   110,451   46,021   32215   13806  

Source:  mLightenment  estimates  based  on  various  sources.         Finally,  our  study  also  captures  sales  silently  triggered  by  the  less  visible  peer-­‐to-­‐peer  but   literally  innumerable  messages  that  happen  every  day  as  friends  forward  news  of  sales,  links  to   restaurant  reviews,  and  the  like.       Mobile  Email   A  similar  story  can  be  told  about  mobile  email.  CRM  email  has  been  becoming  more  and  more  a   mobile  phenomenon,  growing  aggressively,  by  our  estimate,  from  17%  of  all  commercial  email   opens  in  2010  to  almost  a  third  of  all  CRM  emails  last  year.    Published  reports  indicated  that   during  the  course  of  2012  alone  there  was  a  73%  increase  in  email  views  on  iPads,  34%  increase   on  mobile  devices,  11%  decrease  on  Web-­‐based  email  programs,  and  9.5%  decrease  on  desktop   email  clients.82    
Table  41  Commercial  Email  Open  Trends  Mobile  vs.  Web       Mobile  Opens   PC  Opens   Desktop   Webmail   2010   17%   83%   36%   49%   2011   23%   77%   33%   44%   2012   32%   68%   29%   39%  
83

2013   39%   61%   25%   36%  
84

2014   47%   54%   22%   32%  

2015   54%   46%   19%   27%  

Source:  Author  estimates  based  on  adjusted  Return  Path  and  Strongmail  data.  

Mobile  Web   As  one  might  expect  given  the  substitution  of  smartphones  and  tablets  for  PC  usage,  the                                                                                                              
82

 Monetate  "Intelligent  Email  Marketing  that  Drives  Conversions"  (2012),  cited   http://emailstatcenter.com/Usage.html   83  http://www.returnpath.com/wp-­‐content/uploads/resource/mobile-­‐webmail-­‐desktops/Return-­‐Path-­‐Mobile-­‐ Messaging-­‐WP-­‐11_11.pdf   84  Strongmail  website     66  

“Internet”  and  “the  mobile  Internet”  are  increasingly  the  same  thing.    comScore  has  reported   that  the  share  of  Internet  traffic  accounted  for  by  mobile  phones  and  tablets  nearly  doubled   between  2011  and  2012,  to  a  combined  13.3  percent  of  total  Internet  page  views  as  of  August   2012.    Mobile  phones  drove  9  percent  of  page  views  during  the  month,  while  tablets  accounted   for  nearly  half  of  that  at  4.3  percent  share  of  page  views,  corresponding  to  PCs  share  of  total   consumption  declining  6.4  points  in  the  same  timeframe.85      Our  own  estimates  are  that  by  the   final  year  of  the  forecast  period,  2015,  about  one  quarter  of  U.S.  Web  traffic  will  be  accounted   for  by  mobile  devices,  with  the  tablet  providing  over  half  that  amount,  as  shown  in  the  table   below.      
Table  42  Mobile  Browser  data  traffic  share  of  total  browser  data  traffic     PC   Mobile  Devices   2011   2012   88%   12%   4%   8%   1%   36%   2013   83%   16%   7%   9%   1%   43%   2014   79%   20%   10%   10%   1%   50%   2015   75%   24%   14%   10%   1%   57%   92%   8%   Tablet   3%   Smartphone   5%   Other   1%   Tablet  as  %  of  Mobile  Device  Traffic   32%   Source:    Author  estimates  based  on  DataScan?  

Although  from  a  consumer’s  perspective  of  time  spent  and  usage,  the  PC  and  mobile  Web  are   the  same  thing,  we  often  hear  marketers  complain  about  the  differences—“mobile  conversion   rates  are  shockingly  low.”  A  rule  of  thumb  holds  them  to  be  about  half  what  marketers  are  used   to  seeing  on  the  desktop  Web.       This  leads  us  to  clarify  the  distinction  between  the  sales  impact  of  the  mobile  web  vs.  the   mobile  optimized  Web.         The  accelerating  trend  to  pay  per  performance  advertising  in  digital  reflects  marketer’s  growing   (and  in  our  view,  greatly  exaggerated)  belief  that  the  power  of  mobile  advertising  is  best   understood  in  terms  of  what  happens  after  the  tap:  the  conversion,  which  is  almost  always   assumed  to  be  a  conversion  that  takes  place  on  the  marketer’s  mobile  website.    
Table  43  Post  Click  Campaign  Action  Mix   Site  Search   Application  Download   social  media   mCommerce   Enroll/Join/Subscribe   0.41   0.32   0.28   0.24   0.23  

                                                                                                           
85

 comScore  Device  Essentials  Mobile  Phones  and  Tablets  Now  Account  for  1  in  8  U.S.  Internet  Page  Views    –   October  1,  2012     67  

Store  Locator  /  Map   0.19   Watch  Video   0.14   Retail  Promotion   0.13   Place  Call   0.1   Source:  Millennial  Media  Q3  2012  

  There  has  been  much  discussion  lately  to  the  effect  that  if  the  website  or  landing  page  is  not   mobile  optimized,  there  may  be  a  disconnect:    the  consumer  may  never  reach  the  landing  page,   may  not  find  what  they  are  looking  for,  or  find  the  registration  process  too  cumbersome,  or  fail   to  convert  for  some  other  mobile-­‐related  reason.    Thus  there  has  been  an  anxious  conversation   about  the  best  way  for  marketers  to  optimize  their  sites  for  mobile—  by  decreasing  load  times,   simplifying  content  design,  using  different  frames,  among  many  others.       The  point  is  however,  that  the  conversion  rate  on  a  mobile  website  should  NOT  be  the  full   measure  of  sales  impact.    For  example,  one  survey  we  encountered  in  the  course  of  our   research  noted  the  following  behaviors  among  people  who  reacted  to  a  mobile  ad:  42  percent   clicked  on  the  mobile  ad;  35  percent  visited  the  advertiser’s  site;  32  percent  searched  for  more   information  on  their  phone;  49  percent  made  a  purchase  and  27  percent  called  the  business.86           We  cite  these  statistics  not  for  the  specific  numbers—they  don’t  enter  into  our  impact   estimates—but  rather  to  suggest  the  scope  of  specific  ways  in  which  sales  impacts  should  not   be  limited  to  a  sales  conversion  on  the  marketer’s  website,  important.     Mobile  Apps   A  growing  body  of  academics  and  industry  experts  has  noted  the  powerful  confluence  of  mobile   and  consumer-­‐centric  relationship  marketing.    For  AdAge,  content  marketing  is  the  hot  topic  of   the  moment.87  In  a  recent  article  Emory  University  professor  of  marketing,  Jag  Sheth,  observed   that  mobile  was  one  of  the  leading  edges  of  a  “reincarnation”  in  relationship  marketing.    We   concur,  and  think  the  mobile  app  is  the  real  force  behind  this  reincarnation,  for  it  enables   consumers  to  lead  the  conversation  about  the  brand,  even  to  “co-­‐create”  the  brand  in  ways   never  imagined  before  the  app.       The  statistics  on  apps  download  and  usage  are  familiar,  but  still  remarkable.    According  to  the   Apps  Developers  Alliance,  App  downloads  reached  31  billion  in  2012  and  expected  to  grow  to   56  billion  by  2015.88    
Table  44  Time  Spent  with  Apps  vs.  Mobile  Web,  Smartphone  Users     Apps/Web  Ratio  In  Minutes   2010   1.99   2011   2.72   2012   4.67   2013   6.25   2014   7.95   2015   9.65  

                                                                                                           
86 87

 Google/Ipsos  (US  consumer  Mobile  Movement  survey  April  2011)    Jag  Sheth  "The  Reincarnation  of  Relationship  Marketing,"  Application  Developers  Alliance,  September  27,  2012,   88  http://appdevelopersalliance.org/news/2012-­‐09-­‐27-­‐GigaOMSurvey     68  

Source:  mLightenment  calculations  based  on  Flurry  data.     Flurry,  one  of  the  foremost  sources  on  Apps  statistics,  revealed  that  between  December  2011   and  December  2012,  the  average  time  spent  inside  mobile  apps  by  a  U.S.  consumer  grew  35%,   from  94  minutes  to  127  minutes.    By  comparison,  the  average  time  spent  on  the  Web  declined   2.4%,  from  72  minutes  to  70  minutes;  they  spend  1.8  times  more  time  in  apps  than  on  the  Web.   Perhaps  most  startling  was  the  fact  that  time  spent  with  apps  had  attained  76%  of  the  total   time  spent  on  television.89    Where  is  this  power  coming  from?    Games,  of  course;  but  few  of   them  qualify  as  relationship  marketing;  but  more  important  are  the  following.         The  Power  of  Local     One  of  the  important  innovations  to  content  by  mobile  devices  is  the  ability  of  apps  to   automatically  provide  geographically  specific  information  relevant  to  the  user’s  current  location   automatically,  thanks  to  many  apps’  ability  to  leverage  the  smart  device’s  GPS  function.  The   biggest  commercial  impact  of  this  appears  to  be  in  search,  where  one  half  of  all  local  searches   are  now  performed  on  mobile  devices,  and  increasingly,  that  means  apps.90    Moreover,  as   powerful  as  apps  are  for  local-­‐search,  a  large  part  of  the  power  is  also  supplied  by  the   inherently  social  aspect  of  location,  as  when  Yelp  users  provide  local  restaurant  and  hardware   store  reviews,  or  GoogleMaps  users  overlay  maps  of  local  landmarks  with  pictures  taken  on   their  mobile  phones.    In  addition,  already  in  2011,  12  percent  of  smartphone  owners  had   reportedly  “checked  in”  via  location-­‐based  services.91         Mobile  /  Social     “New  screen”  mentality  is  pervasive  in  the  industry.    Apparently,  many  industry  people  believe   that  social  media  are  simply  the  new  form  of  television.    It  isn't,  nor  is  it  ever  likely  to  be.  Social   media  is  and  was  developed  to  assist  individual  users  in  communicating  with  other  users,  not  to   listen  to  marketers.         The  impact  of  social  is  not  just  in  consumer  consumption  but  also  in  consumer  creation  and   distribution  of  marketing-­‐relevant  communications,  an  activity  for  which  the  smart  mobile   device  is  exceptionally  well  suited.       First,  let  us  consider  mobile  consumers’  consumption  of  social  media.    According  to  recent  Pew   data,  68%  of  smartphone  owners  in  2012  reported  having  ever  used  social  media  and  fully  50%   of  these  reported  they  did  so  on  a  typical  day.    Twitter  for  example,  has  reportedly  been  used   by  16%  of  smartphone  owners,  and  10%  use  it  every  day.92    However,  among  all  social  sites,                                                                                                              
89  

Simon  Khalaf,  “Mobile  Apps:  We  Interrupt  This  Broadcast,”  Flurry.com,  December,  5,  2012,    http://blog.flurry.com/bid/92105/Mobile-­‐Apps-­‐We-­‐Interrupt-­‐This-­‐Broadcast   90  http://www.smartinsights.com/mobile-­‐marketing/mobile-­‐marketing-­‐analytics/mobile-­‐marketing-­‐statistics/   91  Foursquare   92  http://pewinternet.org/Reports/2012/Best-­‐Worst-­‐Mobile/Part-­‐V/Activities.aspx     69  

Facebook  is  the  number  one  connected  media  destination  on  mobile,  with  consumers  spending   many  hours  on  it  per  week,  and  with  mobile  now  representing  the  lion’s  share  of  Facebook’s   overall  audience.       How  consumers  contribute.      Consumers  routinely  engage  in  mobile  activities  that  are  the   foundation  of  consumer-­‐drive  marketing  communications.    One  of  the  most  important  is  photo   uploads  to  social  sharing  sites,  which  58%  smartphone  owners  report  having  done  at  least  once,   and  which  15%  do  on  a  typical  day,  according  to  Pew  research.93    Vast  numbers  also  report   commenting  on  others’  posts,  “liking”  things  on  Facebook,  and  “following”  -­‐  which  while   seemingly  only  a  consumption  metric  actually  has  marketing  value,  since  the  numbers  of   followers  a  person  or  product  has  can  be  seen  socially.     Consumers  generated  more  than  500  billion  impressions  about  products  and  services  through   social  media  in  2011.94    Furthermore,  social  customers  have  been  found  to  tell  an  average  of  42   people  about  a  good  customer  experience,  and  tell  an  average  of  53  people  about  a  bad   customer  experience.95      53  percent  of  people  on  Twitter  acknowledge  having  recommended   companies  and/or  products  in  their  Tweets.96         Most  customer  feedback  comes  from  purchasers  in  the  35  to  65  age  range.  .  However,  in-­‐store   buyers  aged  19  to  24  are  more  likely  to  go  online  to  give  their  feedback  for  the  products  they   purchase.  In  fact,  the  older  the  in-­‐store  shopper,  the  less  likely  he  or  she  is  to  leave  product   feedback  online.  97   Overall  impact  is  that  consumers  who  research  across  online,  offline,  and  mobile  channels   spend  18-­‐36  percent  more  than  those  who  don’t.98  60  percent  of  people  who  use  3  or  more   digital  means  of  researching  products  learned  about  a  Retailer  through  a  FB  or  Twitter  post.  99   As  one  might  expect,  there  are  important  generational  differences.    When  making  brand   decisions,  Millennials  are  247  percent  more  likely  to  be  influenced  by  blogs  or  social  networking   sites,100  84  percent  of  Millennials  say  user-­‐generated  content  has  at  least  some  influence  on   what  they  buy  (compared  to  70  percent  of  Boomers).101                                                                                                                  
93 94

 Ibid.    Competitive  Strategy  In  The  Age  Of  The  Customer.  Forrester  Research  Inc.,  June  6,  2011.     http://www.forrester.com/Competitive+Strategy+In+The+Age+Of+The+Customer/fulltext/-­‐/E-­‐ RES59159?objectid=RES59159   95  2012  American  Express  Global  Customer  Service  Barometer   96  ROI  Research  for  Performance,  June  2010,  op.  cit.     97  "The  Conversation  Index  Vol.  3,"  Bazaarvoice,  March  2012   98  "Social  Trends  Report  2012",  Bazaarvoice,  June  2012   99  Nielsen,  Social  Media  Report,  Q3  2011   100  Times  Trends  research,  "Millennial  Shoppers:  Tapping  into  the  Next  Growth  Segment."  June  28,  2012   101  "Talking  to  Strangers:  Millennials  Trust  People  over  Brands"  Bazaarvoice,  January  2012     70  

  mShopping   40  percent  of  U.S.  smartphone  owners  compare  prices  on  their  mobile  device  while  in-­‐store   shopping  for  an  item  102   During  the  2012  holiday  season,  46  percent  of  cellphone  owners  called  a  friend  while  they  were   in  a  store  for  advice  about  a  product  they  were  considering  purchasing;  28%  of  cellphone   owners  used  their  phone  to  look  up  reviews  of  a  product  online  while  they  were  in  a  store  and   27%  of  adult  cell  owners  used  their  phones  to  look  up  the  price  of  a  product  online  while  they   were  in  a  store,  to  see  if  they  could  get  a  better  price  somewhere  else.  103   Pew’s  April  2012  survey  found  that  some  30%  of  all  cellphone  owners  and  86%  of  smartphone   owners  used  their  phones  in  the  previous  30  days  to  decide  whether  to  visit  a  business,  such  as   a  restaurant.104     62  percent  of  all  online  shoppers  read  product-­‐related  comments  from  friends  on  Facebook,   with  75%  of  these  shoppers  clicking  through  to  the  retailers’  site.  105    33  percent  of  consumers   use  their  mobile  phones  to  check  for  sales  and  specials  and  32%  of  consumers  have  checked   ratings  and  reviews  of  products  on  their  phones.106       But  for  that  very  reason,  no  innovation  in  the  area  of  content  more  clearly  exploits  mobile’s   attributes  as  the  quintessential  personal,  with-­‐me-­‐all-­‐the-­‐time  relationship  marketing  tool  than   social  media.  Mobile  empowered  social  is  shifting  the  power  of  marketing  from  the  producer  to   the  consumer,  especially  thanks  to  the  impact  of  mobile  enabled  “user  generated  marketing   communications”       Social  media  has  created  mobile  brand  communities,  in  effect  mobile-­‐enabled  brand  virtual   meet  ups.  Empowered  by  their  smartphones  and  tablets,  consumers  are  now  co-­‐creating  brand   identity  on  the  go.  User-­‐generated  marketing,  such  as  co-­‐creating  new  products  or   commercials,  or  socially  repurposing  an  old  product,  results  in  releasing  untapped  value  and   resources  and  leads  to  greater  emotive  bonds,  when  consumers  can  say  “I  did  that.”         In  other  words,  the  impact  arises  not  only  from  co-­‐creation  and  viral  sharing  with  other   consumers,  but  from    “fly-­‐on-­‐the-­‐wall”  marketer  listening  opportunities.    Mobile  CRM  in  social                                                                                                              
102 103

 (Comscore,  January  2011)    “In-­‐Store  Mobile  Commerce  During  the  2012  Holiday  Shopping  Season”   http://pewinternet.org/Reports/2013/in-­‐store-­‐mobile-­‐commerce.aspx   104  “Just-­‐in-­‐time  Information  through  Mobile  Connections”  http://pewinternet.org/Reports/2012/Just-­‐in-­‐time.aspx   105  Sociable  Labs  Social  Impact  Consumer  Study   106  The  2011  Social  Shopping  Study  Brief  I:   Consumer  Research  Dynamics,  Mobile  and  User-­‐Generated  Content  e-­‐Tailing  Group.   http://www.powerreviews.com/assets/download/Social_Shopping_2011_Brief1.pdf     71  

media  empowers  this  value  by  permitting  collecting,  analyzing  and  interpreting  customers’   conversations,  whether  about  the  brand,  or  their  ultimate  needs,  problems,  or  personal   objectives.  These  conversations  are  making  visible  sentiments  that  were  formerly  invisible  to  all   but  the  consumers  themselves.    Mobile  -­‐  social  CRM  is  as  much  an  inbound  data  collection   channel  as  it  is  an  outbound  marketing  channel.    Data  captured  via  mobile  marketing  can  be   incorporated  into  existing  databases  to  better  understand  and  manage  consumer  preferences   and  to  develop  targeted  offers  that  appeal  to  each  consumer’s  shopping  preferences.      

Most  of  Mobile’s  Sales  Impact  Is  “Offline”  
In  this  section  we  briefly  explore  where  sales  generated  by  mobile  marketing  are  being  realized:   either  online  under  the  broad  category  of  “mCommerce,”  or  offline  via  the  broad  category  of   brick  and  mortar  sales  we  call  “mShopping.”      
Table  45  MM  Sales  Impact  by  Channel  
Total  Mobile  Mktg  Sales  Impact   mCommerce  (All  Remote)*   mShopping  (All  Physical  Location)   mShopping  as  %  Total  

$  Millions  

2010  
48,627   4,088   44,538   91.6%  

2011  
85,300   14,147   71,153   83.4%  

2012  
139,003   21,370   117,634   84.6%  

2013  
216,931   30,483   186,448   85.9%  

2014  
311,566   39,123   272,443   87.4%  

2015  
400,971   47,764   353,207   88.1%  

*Author  estimates  of  mCommerce  sales  are  calculated  from  estimates  of  eCommerce  and  mCommerce  sales  from   sources  such  as  the  Commerce  Department,  Forrester  Research,  comScore,  and  others.    mCommerce  sales  in  this   table  are  cited  only  for  purposes  of  comparison  and  are  NOT  necessarily  attributable  to  mobile  marketing   communications  using  our  methodology.    See  report  below.  

  By  comparing  mobile’s  total  sales  impacts  reported  here  (which  do  not  distinguish  between   online  and  offline  sales)  to  third-­‐party  reports  of  mCommerce,107  it  is  clear  that  the  great   majority  of  mobile’s  sales  impact  -­‐-­‐  at  least  85%  -­‐-­‐  occurs  in  brick  and  mortar  environments,   whether  a  supermarket,  a  department  store,  a  car  dealership,  a  movie  theatre  or  a  ballpark.           Here’s  why  we  say  this.    We  fully  expect  that  some—possibly  most—mCommerce  transactions   are  realized  through  remote  sales  channels  caused  by  mobile  marketing  communications.    But   since  the  data  supporting  our  model  doesn’t  allow  us  to  make  a  specific  attribution  of  sales  to   specific  channels,  we  use  third  party  mCommerce  numbers  as  the  basis  for  “thought   estimation.”  In  this  hypothetical  calculation,  reported  mCommerce  numbers  set  a  baseline  of   the  minimum  amount—evidently  about  $21  billion  -­‐-­‐  of  total  mobile  marketing  sales  occurring   inside  direct  electronic  channels.    When  these  are  deducted  from  our  channel-­‐neutral  total,  the   balance  represents  the  hypothetical  offline  component  of  our  total,  i.e.  the  minimum  amount   that  can  be  said  to  flow  into  the  brick  and  mortar  accounts  of  apparel  merchants,  restaurants,                                                                                                              
107

 mTransactions  or  mPayments  are  not  to  be  confused  with  mobile  banking,  which  is  for  us  the  management  of   financial  accounts  and  services  via  mobile  devices.         72  

supermarkets,  and  car  dealerships  across  the  country,  even  though  none  of  them  will  ever  have   a  mobile  “conversion”  to  which  these  mShopping  sales  could  ever  be  traced.     In  fact  the  portion  of  brick  and  mortar  offline  sales  within  mobile’s  total  sales  impact  is  almost   certainly  greater  even  than  this.    Not  every  mCommerce  sale  is,  in  our  strict  sense  here,  actually   attributable  to  mobile  marketing.108    Of  course  at  least  some  percentage  of  every  mCommerce   sale  can  be  at  minimum  attributed  to  the  mCommerce  marketer’s  investment  in  creating  a   mobile  commerce  app,  website,  etc.,  and  promoting  it  to  the  consciousness  of  potential   customers.    Yet  for  many  product  sales,  the  primary  trigger  of  the  purchase  may  have  been  a   marketing  communication  the  consumer  encountered  in  a  different  media  altogether.         What  follows  is  our  own  tentative  assessment  of  the  break  out  of  mobile-­‐driven  sales  between   online  and  offline.       Mobile  Commerce  (mCommerce)   In  this  study,  mobile  commerce  encompasses  any  final  purchase  (the  transfer  of  ownership)  is   conducted  via  the  purchaser’s  mobile  device.    It  can  be  accomplished  through  a  click  on  an  SMS   message  that  downloads  a  ringtone;  it  can  be  a  book  order  placed  on  mobile  commerce   website,  or  a  hotel  room  booked  through  a  hotel  aggregator’s  mobile  applications.  It  also   includes  a  mobile  ticket  (if  that  ticket  is  ordered  through  a  mobile  device),  through  a  variety  of   means  including  mobile  coupons,  mobile  ticketing,  in-­‐app  purchases  and  virtual  goods  and   currency.109     • Digital  Content.  This  refers  to  any  media  that  is  downloaded  upon  purchase  onto  the   purchaser’s  mobile  device  for  use.  One  of  the  most  important  categories,  as  one  might   expect,  is  app-­‐based  digital  content.    Other  researchers  have  suggested  that  already  in   2012,  U.S.  consumers  would  be  likely  to  have  spent  $6.7  billion  on  mobile  apps  in  2012,   about  20%  of  the  total  that  U.S.  consumers  will  spend  on  all  forms  of  mobile  media  in   2012.  110      Paid  apps,  and  in-­‐app  purchases,  whether  they  be  “virtual  goods”  like   weapons  upgrades  and  extra  lives  in  mobile  games  or  actual  goods,  such  as  food  for   home  delivery;  videos  that  are  bought  or  rented;  mobile  subscriptions  to  the  digital                                                                                                              
108

 It  seem  plausible  that  some  mCommerce  categories  such  as  digital  content  downloaded  onto  mobile  devices   are  mostly  mobile  driven,  even  if  this  hypothesis  can’t  be  confirmed  within  the  scope  of  data  available  to  our   model.    But  with  other  important  components  of  mCommerce,  such  as  mticketing  of  airline  boarding  passes  or   movie  tickets,  many  of  the  actual  purchases  take  place  via  the  PC  internet,  and  therefore  only  a  portion  of  the   mticket  sale  can  be  seen  as  mobile  driven.       109  A  key  growth  driver  of  mCommerce  is  that  more  and  more  goods  and  services  are  now  being  delivered  or   managed  digitally.    The  first  product  categories  to  be  revolutionized  by  this  trend  were  music,  then  video,  then   magazines,  newspapers,  and  most  recently,  books.    Over  the  next  few  years,  we  anticipate  that  education  and   even  health  will  see  increased  digital  delivery  of  their  services,  creating  significant  growth  prospects  for  sales   impacts  in  these  verticals.       110  http://247wallst.com/2012/04/23/mobile-­‐market-­‐spending-­‐to-­‐reach-­‐150-­‐billion-­‐in-­‐2012-­‐t-­‐vz-­‐vod-­‐znga-­‐p-­‐aapl-­‐ goog-­‐mm/     73  

  •

editions  of  newspapers  or  periodicals;  eBooks;  software;  remote  e-­‐learning  courses;  or   paid  games.   Mobile-­‐Ordered  Non-­‐Digital  Goods  and  Services.  In  this  category  mCommerce  mobile   consumers  use  their  devices  to  purchase  goods  or  services  that  are  not  consumed   directly  on  the  device  itself.      This  includes  “hard-­‐copy”  content,  such  as  print  books,   DVDs  and  BluRay  discs,  and  physical  goods  for  shipment,  as  with  Fresh  Direct.  This   category  of  mCommerce  includes  a  considerable  portion  of  sales  realized  via  call   centers,  as  when  the  mobile  consumer  orders  from  a  catalog  via  a  mobile  call  to  an  800   number.     Mobile  Banking.    Though  technically  (in  our  model,  at  least)  part  of  the  previous   category  of  mobile-­‐ordered  non-­‐digital  goods  and  services,  we  thought  it  worthwhile  to   treat  it  separately,  given  the  scale  of  its  impact.  In  the  U.S.,  15  percent  of  online  adults   were  active  mobile  bankers  in  2011,  up  from  five  percent  in  2008.111    U.S.  consumers   who  opened  financial  products  reported  that  they  opened  37  percent  of  these  products   online,  two  percent  by  mobile  and  36  percent  in  a  branch.112    Furthermore,  studies  have   been  published  suggesting  that  up  to  one  third  of  all  product  reviews  in  social  are  about   financial  products.    

  •

Mobile  Shopping  (Offline,  Physical  Location  Sales  Impact)   In  this  category  we  find  all  “offline”  sales  influenced  by  mobile  marketing  communications  of   any  kind.         What  does  the  at  least  85%  of  mobile’s  impact  is  offline  mean  for  brick  and  mortar  vendors  of   whatever  stripe?         Showrooming.    The  answer  comes  down  to  the  issue  of  so-­‐called  “showrooming,”  the  heavily   documented  habit  that  Americans  now  have  of  browsing  in  physical  locations,  mobile  apps  in   hand,  to  comparison  shop,  and  often  place  an  order  with  a  remote  retailer.  To  us,  the   implication  seems  obvious:  there  are  literally  billions  of  dollars  “up  for  grabs”  between  the   mShopping  and  mCommerce  sales  outlets.    The  proprietors  with  the  right  mix  of  sales   assistance,  socially  enhanced  product  and  experience  information,  location  sensitive  delivery   options,  and  of  course,  price,  all  within  the  most  convenient  and  clever  app,  has  much  to  win.       Retailers,  hoteliers,  and  others  are  eager  to  capture  as  much  of  this  offline  activity  as  they  can     via  apps  that  protect  the  customer  in  the  brick  and  mortar  environment,  protecting  them  from   being  “conquested”  by  the  showrooming  sales  temptation.  Much  of  their  strategy  focuses  pre-­‐ purchase  mobile  shopping  activity;  for  example  app  utilities  like  shopping  lists,  or                                                                                                              
111

 Forrester  Research  cited  in  Chantal  Tode,  “Banks  Pour  One  Third  of  Digital  Investments  Into  Mobile  –  Forrester,”  June  21,  2012.  Mobile  Commerce  Daily,  http://www.mobilecommercedaily.com/banks-­‐pour-­‐one-­‐third-­‐ of-­‐digital-­‐investments-­‐into-­‐mobile-­‐report   112 Chantal  Tode,  ibid.       74  

recommendations  reviewed  in  social  media  via  mobile  can  drives  sales  by  making  up  minds,   finding  stores  and  products  quicker,  while  consumer  still  want  to  purchase,  and  by  making   purchase  suggestions  and  helping  ensure  they  drive  to  a  location  where  the  product  is  in  stock.           Some  of  this  consumer-­‐initiated  pre-­‐purchase  “mobile  shopping”  activity  happens  off-­‐site,   some  of  it  happens  on-­‐site  in  a  physical  location  –  car  dealer,  retail  outlet,  shopping  mall,  etc.     The  expectation  of  mobile  marketing  expenditure  is  therefore  in  facilitating  such  activity  in  a   way  that  conversion  to  sales,  whether  online  or  off,  is  as  smooth  as  possible.    For  example,  a   mobile  shopping  list  created  on  a  generic  note-­‐taking  app  is  one  thing;  but  a  dedicated   shopping  list  app  created  by  a  big  box  retailer  and  used  by  a  large  portion  of  its  customers  could   be  monitored  in  real  time  by  the  merchandisers  to  ensure  that  items  appearing  in  these  lists   were  in  stock,  so  that  sales  would  not  be  lost.     Promotions:    mCoupons,  Sweepstakes,  Loyalty  and  Wallets.  Millions  of  dedicated  coupon   users  in  the  US  appear  to  be  now  hooked  on  the  utility  of  mobile  media  for  finding,  storing,  and   redeeming  promotions  and  marketing  incentive  services,  with  location-­‐aware  mobile  passports   now  able  to  trigger  coupon  reminders  automatically  whenever  he  passes  within  the  perimeter   of  a  participating  retail  outlet.    In  our  view,  loyalty  includes  mobile  pre-­‐paid  credit.  These  are   “pre-­‐paid”  loyalty  cards,  where  funds  are  debited  into  loyalty  accounts  and  controlled  through   native  applications  on  the  device.    The  adoption  and  usage  among  consumers  can  be   benchmarked  by  noting  the  2  million  highly-­‐caffeinated  patrons  who  use  the  Starbucks   payment  app  with  its  “Square”  functionality.113     Mobile  Payments   Not  every  purchase  in  which  the  mobile  device  is  the  payment  mechanism  has  been  “driven  by”   that  mobile  device.    (At  least  not  wholly  so.    If  that  were  the  case,  then  we  would  say  that   money  itself  were  the  “cause”  of  the  purchases  made  using  it.)    Instead,  we  only  count  the   value  of  mobile  payments  to  the  extent  they  are  attributable  to  mobile  marketing   communications  -­‐-­‐  i.e.  transaction  that  could  have  taken  place  using  good  old  fashioned  cash  or   plastic  credit.           The  table  below  is  our  estimate  of  mobile  payments  using  both  NFC  and  non-­‐NFC  methods,   based  on  third-­‐party  sources.    It  is  an  category  of  activity  that  overlaps  both  mobile-­‐driven   offline  sales,  and  off-­‐line  sales  that  are  not  attributable  to  mobile.    It  is  estimated  and  included   here  only  for  possible  future  reference.        

                                                                                                           
113

 Chantal  Tode,  “Starbucks  caffeinates  mobile  payments  with  over  2M  mobile  transactions  per  week.”   Mobile  Commerce  Daily,  November  5,  2012.    http://www.mobilecommercedaily.com/starbucks-­‐caffeinates-­‐ mobile-­‐payments-­‐with-­‐over-­‐2m-­‐mobile-­‐transactions-­‐per-­‐week     75  

    Table  46  Mobile  Payments  Estimates  

  TOTAL   NFC   Non-­‐NFC  

2011    7,020     300    6,720    

2012    18,000      1,200      16,800    

2013    28,980      2,100      26,880    

2014    41,660      4,700      36,960    

2015    56,340      9,300      47,040    

Source:  mLightenment  estimates  from  various  sources  

The  Performance  of  Mobile:    The  Value  of  Dollars  Spent  and  Beyond…  
The  Marketing  Impact  Ratio  (MIR)—simply  total  sales  divided  by  expenditure—is  expected  to   decline  slightly  over  the  forecast  period,  falling  to  $20.25  in  2015  from  a  high  of  $20.77  in  2012.       However,  not  all  marketing  categories  will  have  falling  MIR.  Mobile  CRM  is  projected  to  grow  at   an  annual  rate  of  4%,  growing  from  $18.53  in  2012  to  $20.81  by  2015.  Where  is  this  growth   coming  from?    The  answer  should  be  clear:    mobile  empowers  consumers  as  marketers.      
Figure  3:  Mobile’s  Marketing  Impact  Ratio  
$30   $25   $20   $15   $10   $5   $0   2010   2011   2012   2013   2014   Mobile  Media  Adv   Mobile  CRM   2015   Total  Mobile  Marke}ng   Mobile  DR  Enhanced  Trad'l  Adv  

 

    Source:    mLightenment     The  confluence  of  mobile  local  and  social  makes  measurement  of  performance  difficult,   especially  for  individual  marketers  who  are  under  pressure  to  nail  down  very  precise  dollar-­‐for-­‐ dollar  measures  of  sales.    We  are  aware  individual  marketers  struggle  with  ROI  “proxies”  like   the  number  of  Twitter  followers,  retweets,  or  likes  on  their  Facebook  page.    Especially  with  
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mCommerce  transactions  such  a  tempting  source  of  data,  it  is  hard  to  avoid  asking  “is  our   mobile  social  media  marketing  driving  conversions?”         Yet  with  the  incredible  mobile  enabled  sharing  of  pictures,  comments  and  ideas  on  social   networks,  Twitter,  Facebook,  Pinterest,  etc.,  exploding  as  they  are  this  may  be  the  wrong   question.    The  right  question  may  be:  is  our  mobile  social  media  marketing  listening  to  the   conversation?       Indeed,  the  value  of  mobile-­‐enabled  relationship  marketing  goes  well  beyond  top-­‐line  financial   results,  not  only  for  the  company  but  mobile  marketers’  customers  and  the  wider  society  of   which  they  are  a  part.     We  believe  the  apps  economy  will  lead  marketers  to  think  beyond  features  and  benefits,  and   think  about  consumers’  goals  and  social  goods.    Yes,  many  consumers  are  motivated  by  price  or   habit;  but  a  growing  number  of  consumers  want  to  feel  that  their  product  preference,  brand   loyalties,  buying  decisions  and  content  consumption  is  meaningfully  related  to  their  higher   social  and  personal  agendas.    In  other  words,  marketers  need  to  realize  mobile  consumers  are   relating  their  brand  relationships  to  purposes  that  go  beyond  “consumption.”           This  will  lead  to  more  enriching  and  empowering  products  and  brands,  and  better—or  at  least   broader—ways  of  measuring  mobile’s  performance,  as  we  describe  in  the  next  section.    

Marketing  Impact  Ratio  by  Industry:  No  Diminishing  Returns?  
We  would  have  expected  to  see  strong  evidence  of  diminishing  returns  when  comparing  figures   for  mobile  marketing  spending  by  industry  and  the  corresponding  marketing  impact  ratios  (see   Tables  43  and  44  below).  Surprisingly,  however,  the  MIR  for  the  top  and  bottom  four  mobile   marketing  spenders  by  industry  does  not  seem  to  reflect  diminishing  returns.    On  the  contrary:   the  highest  spending  quartile  of  industries  sees  the  highest  MIR,  while  the  lowest  quartile  sees   the  lowest  MIR.    While  by  no  means  conclusive,  this  observation  is  sufficiently  counter-­‐intuitive   as  to  deserve  further  exploration.       If  further  investigation  confirms  this  pattern,  the  question  would  then  be:  why  might  mobile  be   exempt  from  the  law  of  diminishing  returns?    The  strongest  hypothesis  is  that  mobile  marketing   does  not  function  alone  but  serves  as  a  catalyst  for  all  other  marketing  platforms.  There  are   several  points  that  explain  this  role  of  catalyst.  Among  them  is  mobile  marketing’s  near   ubiquity,  with  mobile  devices  accompanying  most  people  throughout  the  day,  together  with   mobile  device  penetration  currently  equal  to  that  of  television.  And  hand  in  hand  with  this   ubiquity  is  the  viral  power  of  mobile.  The  ease  with  which  users  can  tweet,  retweet,  post  on   Facebook,  and  share  YouTube  clips  is  all  the  more  valuable  since  users  do  this  at  little  to  no  cost   to  marketers.      

 

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We  find  further  support  for  a  catalyst  effect  in  mobile  marketing’s  versatility.  Unlike  most  other   media  that  offer  specific  and  limited  uses,  mobile  can  be  used  for  search,  shopping,  surfing,   learning,  locating,  and  other  activities  that  complement  various  marketing  platforms  and   strategies.  In  particular,  mobile  shows  high  effectiveness  for  branding  as  seen  in  the  MIR  figures   and  brand  lift  scores.  It  could  also  be  said  that  the  highly  personal  nature  of  mobile  presents   potential  for  better  targeting  and  personal  relevance.  And,  finally,  mobile  represents  the  “final   yard  of  marketing:”  mobile  devices  often  accompany  consumers  throughout  the  purchase   consideration  cycle,  including  every  point  of  sale,  whether  online  or  off.  Crucially,  then,  mobile   gives  marketers  the  ability  to  influence  purchases  right  up  to  the  moment  consumers  reach   even  the  brick  and  mortar  cash  register.      
Table  47:  Total  Mobile  Marketing  Spending  ($  Millions)  
Industry  Group   Resources     Manufacturing,  CPG   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  CPG   Retail  Trade,  Other   Transportation  and  Warehousing     Information     Finance,  Insurance,  Real  Estate   Professional  and  Business  Services     Educational  Services     Health  Care  and  Social  Assistance     Arts,  Museums,  Sports,  and  Recr.     Accommodation  and  Food  Services     Other  Services   Government   Total   2010   42   139   269   72   107   397   93   240   470   152   20   56   17   68   145   116   2,405   2011   74   227   471   119   171   648   156   389   784   245   36   95   27   110   227   179   3,957   2012   132   382   842   202   281   1,082   266   648   1,332   407   64   164   44   181   371   294   6,693   2013   218   597   1,373   322   433   1,676   422   991   2,080   632   105   265   67   281   562   432   10,456   2014   323   867   2,023   473   625   2,425   612   1,401   3,032   903   156   396   95   403   807   622   15,162   2015   446   1,123   2,691   630   804   3,164   814   1,778   4,017   1,163   204   539   120   512   1,028   771   19,806   CAGR   2010-­‐2015   61%   52%   59%   54%   50%   51%   54%   49%   54%   50%   59%   57%   48%   50%   48%   46%   52%  

Source:  mLightenment    

 

 

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Table  48  Marketing  Impact  Ratio  for  Mobile  by  Industry  
Industry  Groups   Resources  (Agriculture,  Mining,   Utilities,  Construction)   Manufacturing,  Consumer   Packaged  Goods   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  Consumer  Packaged   Goods   Retail  Trade,  Other   Transportation  and  Warehousing     Information     Finance,  Insurance,  Real  Estate   Professional,  Scientific,  and   Business  Services     Educational  Services     Health  Care  and  Social  Assistance     Arts,  Museums,  Sports,  and   Recreation     Accommodation  and  Food   Services     Other  Services   Government   TOTAL  MIR   2010   10.03   9.47   29.07   15.75   11.28   23.54   20.63   19.91   24.94   18.87   36.37   17.43   14.24   11.22   13.58   4.70   20.71   2011   9.84   10.10   30.45   16.66   12.18   25.46   22.40   20.96   26.26   19.94   35.32   17.98   15.18   12.07   14.59   5.00   22.06   2012   8.72   10.08   28.13   15.86   12.62   25.30   20.77   19.88   24.49   19.86   32.99   16.95   15.16   12.23   14.79   5.12   21.20   2013   8.15   10.29   27.25   15.63   13.15   25.72   20.66   19.83   23.99   20.21   32.55   16.61   15.47   12.54   15.24   5.26   21.14   2014   7.78   10.53   26.49   15.33   13.70   25.85   20.14   19.69   23.14   20.46   31.83   16.42   15.78   12.84   15.66   5.44   20.92   2015   7.24   11.12   25.14   15.06   14.77   26.30   19.01   19.13   21.78   20.34   34.22   15.98   16.19   13.46   16.51   5.79   20.56  

Source:  mLightenment  

 
 

 

 

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Employment  Impact    
Our  research  shows  that  every  worker  directly  employed  in  mobile  marketing  supports  23.6   other  workers  in  non-­‐mobile  occupations.  Below,  we  explain  what  we  have  included  in  our   estimate  of  mobile  marketing’s  employment  impact,  and  how  we  arrived  at  this  estimate.  In   the  following  pages,  we  also  provide  more  detailed  employment  figures  with  breakdowns  by   state  and  industry.       To  calculate  the  volume  of  mobile-­‐marketing–driven  employment,  we  begin  with  the  value  of   sales  by  industry  caused  by  mobile  marketing  expenditure  established  in  Step  2  (see   Methodology),  which  is  broken  out  by  our  16  major  industry  groups.     Using  national  employment  statistics,  we  calculate  ratios  of  output  per  employee  by  industry   that  represent  coefficients  predicting  the  number  of  additional  employees  that  an  increase  in   sales  in  a  given  industry  will  require  at  prevailing  wage  and  benefit  costs,  taking  other  supply   factors  into  consideration.       Seller  employment  represents  those  personnel  in  non-­‐mobile  marketing  occupations  employed   in  major  industries  needed  to  produce  transport,  handle,  or  supervise  increased  sales  resulting   from  the  successful  use  of  mobile  marketing  to  raise  demand  among  end-­‐customers  for  that   industry’s  products  or  services.     Advertiser  employment  represents  employees  directly  involved  in  creating,  executing,  or   supervising  mobile  marketing  communications.  Direct  mobile  marketing  employment  may  be   found  among  either  mobile  marketing  providers  or  buyers.  This  figure  is  based  upon  the  wage   and  benefit  costs  incurred  as  part  of  mobile  marketing  communications  expenditure,  and  on   related  mobile  marketing  services.  In  other  words,  advertiser  employment  includes  in-­‐house   mobile  marketers  employed  within  the  16  major  industry  categories,  as  well  as  mobile-­‐ marketing–relevant  staff  employed  by  publishers,  ad  networks,  advertising  and  PR  agencies,   audience  analytics  and  metrics  providers,  network  access  providers,  handset  and  peripherals   manufacturers,  consultants,  and  other  service  providers  whom  industries  may  involve  in   developing  their  mobile  marketing  communications.       Together,  these  two  types  of  employment  represent  total  mobile  marketing  employment.         Crucially,  these  employees  represent  employment  that  would  not  exist  but  for  the  expenditure   on,  and  increased  demand  arising  from,  mobile  marketing  communications,  since  the  wages   and  benefits  of  both  categories  ultimately  depend  on  the  prospect  of  accelerated  industry   revenues—  in  other  words,  mobile  marketing’s  net  sales  impact.      
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Finally,  we  use  the  same  statistical  procedures  to  estimate  the  share  of  each  of  these  categories   of  mobile  marketing  employment  found  within  each  of  our  mobile  media  channels,  marketing   categories,  and  in  our  51  geographies  (50  states,  plus  Washington,  DC).        

Total  Employment  
Advertiser  Employment   Mobile  advertiser  jobs  are  the  most  direct  form  of  employment  generation  employing  a   number  of  people  in  activities  such  as  ad  designing,  programming,  analytics,  marketing,   administrative  staff,  etc.  In  2012,  mobile  advertisers  directly  employed  over  21,000  persons,   and  the  industry  is  projected  to  employ  64,000  people  by  2015,  growing  at  an  average  rate  of   44%  per  year.  The  mobile  direct-­‐response  (DR)  category  is  expected  to  grow  the  fastest,   employing  over  9,000  people  by  2015.      
Table  49:  Mobile  Marketing  Advertiser  Employment  
2010     Total  Advertiser  Employment   Mobile  Media  Adv   Mobile  DR  Enhanced  Trad'l  Adv   Mobile  CRM   7,983   3,265   549   4,169   2011   12,672   5,540   1,073   6,059   CAGR     2010-­‐2015   52%   55%   76%   43%  

2012   21,275   9,655   2,123   9,497  

2013   33,453   15,465   4,190   13,798  

2014   48,744   22,568   6,978   19,197  

2015   64,053   29,512   9,402   25,139  

Source:  mLightenment       The  number  of  mobile  advertiser  jobs  by  industry  is  proportional  to  the  amount  of  investment   in  advertising.  Thus,  finance,  retail,  and  manufacturing  industries  are  also  the  largest  markets   for  advertiser  jobs.  About  3.3  jobs  were  created  in  2010  for  every  million  dollars  spent  on   mobile  advertisement.    This  was  3.18  in  2012  and  is  projected  to  stay  close  to  3.2  during  the   forecast  years.  As  mobile  marketers  continue  to  use  more  advanced  database  marketing   strategies  involving  predictive  analytics  and  automation,  labor  deployment  rates  will  likely   remain  low.  
 

 

 

 

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Table  50:  Mobile  Marketing  Advertiser  Employment  by  Industry  ($  Millions)   CAGR   2010-­‐ 2015   60%   51%   58%   53%   49%   51%   54%   49%   52%   50%   58%   57%   47%   49%   47%   46%   52%  

Industry  Group   Resources     Manufacturing,  CPG   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  CPG   Retail  Trade,  Other   Transportation  and  Warehousing     Information     Finance,  Insurance,  Real  Estate   Professional  and  Business  Services     Educational  Services     Health  Care  and  Social  Assistance     Arts,  Museums,  Sports,  and  Recr.     Accommodation  and  Food  Services     Other  Services   Government   Total  

2010   141   449   878   223   359   1,342   316   780   1,522   520   71   192   58   236   501   397   7,983  

2011   241   704   1,476   354   556   2,113   511   1,220   2,449   809   122   315   90   367   756   590   12,672  

2012   428   1,176   2,617   598   909   3,502   868   2,016   4,128   1,336   214   543   146   603   1,228   964   21,275  

2013   711   1,852   4,296   955   1,412   5,465   1,386   3,109   6,463   2,093   353   884   223   942   1,875   1,432   33,453  

2014   1,058   2,697   6,365   1,408   2,047   7,957   2,023   4,429   9,436   3,010   526   1,328   316   1,361   2,707   2,075   48,744  

2015   1,473   3,512   8,522   1,880   2,655   10,459   2,712   5,667   12,522   3,912   693   1,822   406   1,747   3,478   2,594   64,053  

Source:  mLightenment     Seller  Employment   The  incremental  product  sales  resulting  from  successful  deployment  of  mobile  advertising  will   require  hiring  additional  workers  by  the  product  sellers,  manufacturers,  or  the  service  providers   in  order  to  scale  up  the  production.  In  2012,  the  seller  employment  attributed  to  mobile   advertising  is  502,562  persons.  This  is  projected  to  grow  at  a  rate  of  40%,  employing  about  1.38   million  persons  by  2015.  While  the  advertising  spending  is  highest  in  the  mobile  media   category,  the  seller  employment  impact  is  highest  in  the  mobile  CRM  category.    
Table  51:  Mobile  Marketing  Seller  Employment  
CAGR     2010-­‐ 2015   49%   47%   63%   49%  

2010     Mobile   Marketing   Investment   Mobile  Media  Adv   Mobile  DR  Enhanced   Trad'l  Adv   Mobile  CRM   188,913   84,055   11,557   93,301  

2011   312,914   145,013   23,010   144,891  

2012   502,562   222,885   40,438   239,239  

2013   773,685   340,840   72,766   360,079  

2014   1,091,017   468,767   113,173   509,077  

2015   1,379,587   570,239   134,068   675,280  

Source:  mLightenment  
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  Mobile  marketing  seller  employment  by  industry  is  driven  by  incremental  sales  demand   generated  in  each  industry  as  a  result  of  successful  mobile  marketing  strategies.    In  2012,  75   seller  jobs  were  created  for  every  million  dollar  of  mobile  advertising  spending.    However,  this   is  projected  to  fall  by  2%  annually,  reaching  70  jobs  per  million  dollar  of  advertising  spending.     Industry  wise  seller  employment  impact  show  that  retail  (other),  finance,  and  professional   services  are  the  largest  job  creators.    Seller  employment  in  retail  trade  (CPG)  will  grow  the   fastest,  followed  by  professional  services  industry.      

 

 

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Consumer  Data  Best  Practices  and  Privacy114      
With  millions  of  dollars  to  spend  and  tens  of  millions  in  sales  at  stake,  mobile  marketers—like   all  marketers—are  under  tremendous  pressure  to  make  their  communications  “work.”  In  its   simplest  terms,  marketers  look  for  efficiency,  attempting  to  identify  prospective  customers  who   are  most  likely  to  buy  and  then  persuade  them  to  purchase.  Doing  so  successfully  requires   collecting  and  using  information  while  ensuring  that  consumer  privacy  standards  are  respected.     In  the  following  pages  we  hope  to  provide  the  reader  with  an  overview  of  the  broad  set  of   policies,  best  practices,  and  technologies  that  shape  mobile  marketers’  use  of  consumer  data.  It   is  meant  to  be  a  kind  of  “policy  snapshot,”  taken  during  the  time  of  our  economic  impact   analysis,  and  a  look  at  how  privacy  can  affect  both  the  return  on  investment  for  mobile   marketers  as  well  as  associated  employment.  We  assume  this  snapshot  won’t  change  much—if   at  all—during  the  forecast  period,  even  if  we  recognize  that  political  pressures  could  lead  to   changes  from  legislators,  regulators,  or  private  sector  bodies.    

Balancing  Customer  Knowledge  and  Privacy  Concerns  in  Mobile  
No  matter  which  medium  one  considers,  the  imperative  to  collect  and  use  consumer  data   begins  with  a  simple  fact  of  life:  every  marketer’s  “prospects”—likely  buyers  of  her  product— are  tiny  needles  of  gold  scattered  within  giant  media  “haystacks”  containing  heaps  of  non-­‐ prospects  who  will  likely  never  spend  money  with  her.       For  a  marketer  seeking  to  find  her  “gold,”  every  media  haystack  offers  its  own  opportunities   and  challenges  as  a  place  to  look.  Knowledge  about  the  mix  of  prospect  and  non-­‐prospects  in   any  media  audience,  and  how  to  reach  as  many  prospects  as  possible  with  persuasive   marketing  messages  while  avoiding  wasting  messages  and  money  on  reaching  non-­‐prospects  is   the  heart  of  the  marketer’s  profession.       While  the  “know  thy  customer”  challenge  is  not  unique  to  marketing  via  mobile  media,  mobile   media  present  marketers  and  consumers  alike  with  unique  opportunities  and  risks.  In   particular,  the  always-­‐on,  always-­‐present  personal  character  of  the  mobile  device  calls  for   particular  attention  to  privacy  concerns.     Types  of  Data  and  Methods  of  Collection  &  Use  Involved   Relevant  conditions  for  data  collection  practices  include  the  conditions  under  which  data  is   collected,  what  type  of  data  is  collected,  who  it  is  made  available  to,  and  how  it  is  used.  The                                                                                                              
114

 Disclaimer:  Some  of  the  material  contained  herein  describes  legal  and  regulatory  issues.  We  cannot  stress   enough:  we  are  not  lawyers,  and  nothing  herein  is  intended  as  legal  advice,  nor  should  be  construed  as  such.       84  

types  of  data  that  can  cause  the  greatest  concerns  are  sensitive  data  (e.g.,  financial  account   information,  medical,  or  as  we  shall  see,  geolocation  information).       Mobile’s  Special  Concern:  Hyper-­‐local  Geolocation  Data     Mobile  location  data  offers  marketers  a  powerful  new  set  of  data  tools  for  tracking  and   targeting  individuals  with  geographic  precision.  Consumers  generally  can  control  the  use  of   location  through  settings  provided  by  platforms  and  must  expressly  agree  to  provide   information  to  apps  that  they  download.    Some  apps  provide  the  location  information  they   receive  to  ad  networks  who  can  then  tailor  the  ads  they  deliver  based  on  geography.       Other  Mobile-­‐Specific  Sensitive  Information.  Native  mobile  apps  can  also  access  other  kinds  of   information  stored  on  the  mobile  device  including  contacts,  calendar  appointments,  photos  and   music,  etc.  The  Android  platforms  displays  to  consumers  the  relevant  permissions  requested  by   an  app  for  consumer  approval.    The  iOS  platform  requires  that  users  approve  individually  a   number  of  the  permissions  sought  by  apps,  including  location,  contacts,  photos  and  others.    

Costs  and  Benefits  of  Privacy  Regulation  
Consumer  trust  in  marketers  and  media  depend  on  many  things  aside  from  privacy  alone,   including  issues  ranging  from  quality  of  service  to  fraud.  For  a  marketing  medium  as  dependent   on  data  as  mobile  clearly  is,  trust  in  the  integrity  of  the  ecosystem  is  vital  to  many  consumers’   willingness  to  use  the  media.  Violations  of  that  trust  by  even  a  single  bad  actor  can  often   impose  a  considerable  cost  to  the  entire  industry,  and  indeed,  the  economy  as  a  whole,  by   discouraging  consumers  from  engaging  in  mutually  beneficial  commercial  transactions  with   other  more  reputable  parties.     Marketing  and  media  trade  associations,  along  with  other  business  organizations,  recognize  the   need  for  trust-­‐affirming  practices  so  that  consumers  continue  to  participate  in  the  media  and   digital  marketing  companies  can  continue  to  thrive.    

Current  State  of  U.S.  Consumer  Privacy:  A  Hybrid  Approach  
In  the  United  States  consumers  are  protected  by  a  combination  of  sectoral  legislation  and   industry-­‐self  regulation.    The  Federal  Trade  Commission  has  played  a  lead  role  in  providing   guidance  to  industry  as  to  its  views  about  mobile  best  practices.115  The  Attorney  General  of   California  has  published  guidance  on  mobile  app  best  practices,  as  have  business  and  advocacy   groups.                                                                                                              
115

 Interested  readers  can  probably  do  no  better  than  to  visit  the  Federal  Trade  Commission’s  website  to  immerse   themselves  more  thoroughly  in  this  topic.  The  best  and  most  current  document  with  which  to  start  is  the  FTC  Staff   Report  of  February  2013  entitled,  “Mobile  Privacy  Disclosures:  Building  Trust  Through  Transparency.”  Available  at   http://www.ftc.gov/os/2013/02/130201mobileprivacyreport.pdf     85  

Industry  Self-­‐regulation  through  Trade  Associations   Within  the  framework  of  public  policy  on  privacy,  trade  associations  play  a  particularly   important  role  in  transforming  the  broad  sweep  of  privacy  protection  legal  and  regulatory   provisions  into  more  detailed  and  nuanced  “best  practices”  documents  directly  applicable  to   the  specifics  of  each  individual  industry.  These  describe  acceptable  privacy  behavior  for  firms   sharing  that  industry’s  business  models  and  technologies.  Industry  self-­‐regulation  promotes  a   level  playing  field  among  competitors  in  the  same  industry.     Best  practices  and  guidelines  typically  protect  consumers  in  a  variety  of  ways.  First,  they   directly  provide  clear  direction  and  education  to  industry  practitioners  as  to  what  they  should   or  should  not  do  with  their  marketing.  Second,  associations  often  enforce  these  regulations   among  their  members  through  staff  investigations  that  may  lead  to  loss  of  membership  and   sometimes  public  shaming.       Promoting  privacy  through  technology,  platforms,  and  education     Platforms  providers,  such  as  mobile  operating  systems,  browsers,  and  social  media  platforms,   can  and  do  play  an  important  role  in  ensuring  consumer  trust  about  privacy,  insofar  as  they  set   the  technical  ground  rules  by  which  third  parties  can  obtain  access  to  consumer  information   using  these  platforms.  Platforms  also  require  third  parties  to  agree  to  privacy  requirements  as   part  of  the  Terms  of  Service  they  must  agree  to  operate  on  the  platform.    However,  the  primary   responsibility  for  privacy  compliance  rests  on  the  actions  of  companies  that  consumers  interact   with  directly,  including  app  developers,  websites  and  other  third  parties.  

Privacy  Issues  Specific  to  Consumer  Mobile  Data    
Mobile  Voice   It  is  against  the  law  in  the  U.S.  to  place  unsolicited  commercial  calls  to  a  mobile  phone  when   the  call  is  made  by  using  an  automated  random-­‐digit  dialing  generator  or  if  the  caller  uses  a   pre-­‐recorded  message.116     SMS  /  MMS   Legislation  /  Regulation   It  is  illegal  for  commercial  parties  to  send  unsolicited  texts  to  cell  owners  who  have  placed  their   mobile  device  on  the  National  Do  Not  Call  registry.  In  addition,  governmental  regulations  forbid   the  sending  of  text  messages  from  Internet  domain  names,  even  to  those  not  listed  on  the  FTC                                                                                                              
116

 See  FTC  Report  “Truth  about  Wireless  Phones  and  the  National  Do-­‐Not-­‐Call  List,”   http://www.fcc.gov/guides/truth-­‐about-­‐wireless-­‐phones-­‐and-­‐national-­‐do-­‐not-­‐call-­‐list     86  

registry.  Further  regulations  prohibit  the  sending  of  texts  to  contacts  generated  through  an   automatic  dialing  system.117     Industry  self-­‐regulation   SMS  marketing  is  characterized  by  extensive  industry  self-­‐regulatory  efforts,  including  tight  best   practices  for  marketing  campaigns  that  are  reviewed  in  advance  (“advance  provisioning”)  by   carrier-­‐controlled  or  carrier  affiliated  industry  groups,  especially  the  Mobile  Marketing   Association  and  the  Common  Short  Code  Administration  (CSCA),  which  are  industry  gate-­‐ keepers  of  short  codes.118  Marketers  who  violate  these  principles  or  the  terms  of  their   provisioning  agreements  with  the  carriers  can  have  their  marketing  program  cancelled,  or  their   short  code  taken  away,  either  by  CSCA,  or  by  the  owner  of  their  shared  short  code  (usually  a   platform  provider  or  mobile  aggregator).     The  intent  of  such  policies  has  been  to  make  SMS/MMS  as  much  a  completely  “opt-­‐in”   marketing  medium  as  possible.  For  marketers,  this  means  texting  is  primarily  used  to  enhance   non-­‐mobile  marketing  response  or  CRM  campaigns,  as  reflected  in  our  expenditure  data,   above.       We  do  not  detect  any  significant  pressure  from  consumer  groups  or  public  officials  for  changes   to  this  policy  framework  during  the  forecast  period.  Industry  policy  appears  to  have  largely   prevented  any  extensive  proliferation  of  SMS-­‐spam,  contributing  to  relatively  high  consumer   satisfaction  with  the  overall  quality  of  their  texting  services,  and  a  positive  sentiment  regarding   SMS  marketing  for  those  consumers  prepared  to  give  their  opt-­‐in  consent.       If  anything,  pressure  for  policy  changes  are  more  likely  to  come  from  mobile  marketers  who   find  the  advance  provisioning  processes  time  consuming  and  economically  burdensome.   However,  as  carriers  have  too  much  at  stake,  we  expect  the  industry  status  quo  will  continue.     Mobile  Email   In  matters  of  privacy,  mobile  email  is  subject  to  the  same  standards  as  other  email.  At  the   Federal  level  the  CAN-­‐SPAM  Act119  establishes  rules  and  requirements  for  commercial  e-­‐mail   and  gives  individuals  the  right  to  opt  out  of  commercial  mailings  with  individual  businesses.                                                                                                                  
117

 See  FCC  Report  “Spam:  Unwanted  Text  Messages  and  Email”  available  at  http://www.fcc.gov/guides/spam-­‐ unwanted-­‐text-­‐messages-­‐and-­‐email   118  The  essential  criterion  for  provisioning  is  that  the  consumer  opts  in  to  the  campaign.  The  mobile  operators   demand  a  double  opt-­‐in  from  the  consumer  and  the  ability  for  the  consumer  to  opt  out  of  the  service  at  any  time   by  sending  the  word  STOP  via  SMS.  These  guidelines  are  established  in  the  MMA  Consumer  Best  Practices   Guidelines,  which  are  required  of  all  short-­‐code  based  mobile  marketers  in  the  United  States.  See  MMA,  Best   Practices:  http://www.mmaglobal.com/bestpractice     119  Bureau  of  Consumer  Protection,  “CAN-­‐SPAM  Act:  A  Compliance  Guide  for  Businesses,”  September  2009,   http://www.business.ftc.gov/documents/bus61-­‐can-­‐spam-­‐act-­‐compliance-­‐guide-­‐business       87  

Among  other  things,  the  act  disallows  false  or  misleading  header  information  or  subject  lines,   and  requires  marketers  to  identify  commercial  messages  as  an  ad.  Messages  must  also  provide   the  sender’s  location  and  an  option  to  opt-­‐out  of  future  mailings.  Furthermore,  the  act  holds   businesses  responsible  for  promptly  honoring  opt-­‐out  requests  and  makes  them  responsible  for   the  actions  of  others  acting  on  their  behalf,  such  as  marketing  agencies  or  other  vendors.     Mobile  Web   Ad  Targeting         Due  to  the  challenges  of  separate  web  and  app  ad  inventory  that  is  not  linked,  the  cookie   targeting  limits  of  the  Apple  Safari  browser  and  other  challenges,  data  use  for  ad  targeting  is   still  in  the  early  stages  of  development.  Nonetheless,  many  companies  are  succeeding  as  they   leverage  the  opportunities  that  are  available  to  use  data  to  provide  reporting,  attribution  and   targeting.       It  will  be  important  that  these  companies  continue  to  develop  their  business  models  and   technology  with  privacy  standards  in  mind,  as  regulators  will  continue  to  scrutinize  practices  in   this  area.  As  we  noted,  in  February  2012,  the  FTC  issued  general  recommendations  that  digital   marketers  increase  transparency  and  tighten  privacy  policies,  and  provide  consumers  the   opportunity  to  opt  out  of  ad  network  tracking  on  smartphones.120    In  addition,  it  also  issued  a   Privacy  Report  in  May  2012  on  best  consumer  privacy  practices  for  businesses,  which  included   guidance  on  marketing  through  mobile  devices.121  Finally,  in  February  of  2013,  the  FTC  released   its  most  detailed  and  mobile-­‐specific  set  of  recommendations  thus  far,  its  “Mobile  Privacy   Disclosures”  report.       In  response  to  calls  for  industry  to  advance  mobile  privacy  practices,  the  Digital  Advertising   Alliance  (DAA)  will  soon  release  guidance  on  how  its  Self-­‐Regulatory  Code  will  apply  to  mobile   companies.     Mobile  Apps   A  principal  source  of  industry  self-­‐regulation  for  apps  comes  from  app  platform  providers.   Apple,  Google,  Microsoft,  RIM,  Facebook  and  other  platforms  all  require  app  developers  to   meet  baseline  privacy  standards  before  these  digital  products  may  be  offered  for  sale  through   their  app  stores.        

                                                                                                           
120

 Danny  Yardon,  “FTC  Suggests  Privacy  Controls  for  Mobile  Devices.”  February  2,  2012.   http://online.wsj.com/article/SB10001424127887324610504578280061546792322.html?mod=googlenews_wsj   121  FTC  Report:  In  Short:  Advertising  &  Privacy  Disclosures  in  a  Digital  World.  FTC  Workshop  May  30,  2012.   http://www.ftc.gov/bcp/workshops/inshort/index.shtml     88  

Notice  and  Choice   The  principles  of  notice  and  choice  established  in  other  marketing  channels  are  gradually   making  their  way  into  mobile,  as  shown  by  recent  milestones.         In  February  2012,  the  California  Attorney  General  announced  an  agreement  with  the  six  leading   mobile  app  platforms  requiring  that  those  platforms  enable  apps  to  easily  post  privacy  links  for   consumers  in  the  app  stores.122    In  June  2012,  the  U.S.  Department  of  Commerce  announced  a   privacy  multi-­‐stakeholder  process  to  address  mobile  app  transparency,  so  that  stakeholders   would  develop  voluntary,  enforceable  codes  of  conduct.123      In  August  2012,  the  FTC  published   guidelines  that  mobile  app  developers  should  observe  and  comply  with  truth-­‐in-­‐advertising  and   privacy  principles.124     Part  of  the  challenge  of  implementing  notice  and  choice  in  mobile  is  the  confined  space  (and   sometimes  time)  available  in  the  mobile  form  factor  to  convey  the  appropriate  level  of   disclosure.       Apps  and  Children   With  evidence  accumulating  that  children  and  teens  are  the  fastest  growing  group  of   smartphone  users,  the  role  of  app  collection  and  sharing  of  children’s  data  has  moved  to  the   forefront  of  policy  concern.       In  February  2012,  the  FTC  issued  a  report,  “Mobile  Apps  for  Kids:  Current  Privacy  Disclosures   Are  Disappointing,”  which  expressed  that  little  or  no  information  was  available  to  parents  about   the  privacy  practices  and  interactive  features  of  the  mobile  apps  surveyed  prior  to  download.       A  follow-­‐up  report  in  December  2012125  tested  apps’  practices  and  compared  them  to  the   disclosures  made.  Specifically,  the  new  survey  examined  whether  the  apps  included  interactive   features  or  shared  kids’  information  with  third  parties  without  disclosing  these  facts  to  parents.   The  FTC  staff  concluded  that  parents  were  not  given  adequate  information  about  the  privacy   practices  and  interactive  features  of  mobile  apps  aimed  at  kids,  particularly  with  regard  to  the   amount  and  types  of  information  collected  about  their  children.                                                                                                                  
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 Attorney  General  Kamala  D.  Harris  Secures  Global  Agreement  to  Strengthen  Privacy  Protections  for  Users  of   Mobile  Applications  (Feb.  22,  2012).  Press  Release,  State  of  California  Department  of  Justice.   http://oag.ca.gov/news/press-­‐releases/attorney-­‐general-­‐kamalad-­‐harris-­‐secures-­‐global-­‐agreement-­‐strengthen-­‐ privacy   123  Press  Release,  National  Telecommunications  &  Information  Administration,  Department  of  Commerce,  First   Privacy  Multistakeholder  Meeting:  July  12,  2012  (June  15,  2012)   http://www.ntia.doc.gov/otherpublication/2012/first-­‐privacy-­‐multistakeholder-­‐meeting-­‐july-­‐12-­‐2012.   124  FTC  Report,  “Marketing  Your  Mobile  App:  Get  It  Right  From  the  Start,”  August  2012,   http://business.ftc.gov/documents/bus81-­‐marketing-­‐your-­‐mobile-­‐app.   125  FTC  Report,  “Mobile  Apps  for  Kids:  Disclosures  Still  Not  Making  the  Grade,”  December  2012,   http://www.ftc.gov/os/2012/12/121210mobilekidsappreport.pdf       89  

The  FTC  called  on  all  members  of  the  kids’  app  ecosystem  to  provide  greater  transparency   about  the  data  practices  and  interactive  features  of  children’s  apps  and  proposed  modifications   to  the  Commission’s  Children’s  Online  Privacy  Protection  Rule  (COPPA),  in  part  to  clarify  the   consumer  protections  that  should  apply  when  children  use  mobile  devices.126  The  new  COPPA   rule  restricts  collection  of  location  from  children  without  parental  permission,  and  restricts   behavioral  advertising  to  children,  among  other  new  requirements.   Medical,  Health,  Wellness  and  Therapeutic  Apps   This  type  of  app  has  the  potential  to  dramatically  improve  our  health  and  lower  costs  but  could   presents  privacy  risks,  due  to  the  use  of  some  sensitive  personal  or  medical  information.     To  encourage  their  development  while  promoting  privacy,  the  Department  of  Health  and   Human  Services  (HHS)  recently  launched  an  initiative  to  identify  privacy  and  security  best   practices  for  using  mobile  devices  in  health  care  settings.127     Apps  Commerce   As  the  market  for  mobile  payments  developments,  companies  will  need  to  be  cognizant  of   sector  specific  banking  and  credit  laws.   General  Digital  and  Marketing  Privacy  Issues  Relevant  to  Mobile   Data  Enhancement  and  Data  Brokers   This  is  when  a  company  appends  data  obtained  from  third-­‐party  sources  such  as  data  brokers   (see  above)  to  the  information  it  collects  directly  from  consumers.  Because  data  brokers  are   relatively  inaccessible  and  invisible  to  consumers,  the  FTC  has  gone  on  record  supporting   legislation  that  would  provide  consumers  with  transparency  into  the  enhancing  information   that  data  brokers  hold  about  them.  The  FTC  has  also  encouraged  brokers  of  marketing  data  to   consider  a  centralized  website  where  data  brokers  could  identify  themselves  to  consumers  and   explain  how  they  collect  and  use  consumer  data  as  well  as  explain  consumers’  access  rights  and   other  choices  regarding  data  they  hold.  The  FTC  has  suggested  that  this  approach  should  apply   to  both  online  and  offline  data.      

                                                                                                           
126

 Press  Release,  FTC,  “FTC  Seeks  Comments  on  Additional  Proposed  Revisions  to  Children’s  Online  Privacy   Protection  Rule,”  August  1,  2012,  http://www.ftc.gov/opa/2012/08/coppa.shtm.   127  HSS  Report,  “Mobile  Devices  Roundtable:  Safeguarding  Health  Information,”   http://healthit.hhs.gov/portal/server.pt/community/healthit_hhs_gov__mobile_devices_roundtable/3815     90  

Conclusion:  Assumptions  for  Current  Market  and  Forecast  Period  
For  the  current  and  forecast  period,  we  assume  that  subscriber-­‐level  consumer  tracking  and   targeting  will  continue  to  be  significantly  less  pervasive  among  marketers  than  device  or   demographic  targeting  or  content  contextualization.  Nonetheless,  throughout  our  forecast   period  we  expect  that  publishers  of  mobile  social  sites,  organically  location-­‐based  applications,   search  engines,  and  ad  networks  will  continue  to  experiment  with  technologies  by  which  to   offer  relevant  “audience”  targeting  incrementally  more  attractive  to  marketers  without   alienating  their  growing  audience  base.       We  assume  that  industry  self-­‐regulation  will  continue  to  evolve  in  the  direction  of  further   standardization  across  self-­‐regulatory  groups,  and  the  progressive  incorporation  of  established   self-­‐regulatory  principles  into  their  self-­‐regulation  of  emergent  media  or  practices.  Ultimately,   we  assume  existing  policies  and  incremental  improvements  will  further  communicate  trust  and   value  to  customers  in  a  manner  that  sustains  the  massive  shift  underway  to  consumer  media   consumption  and  commercial  activity  via  smartphones  and  tablets.       That  said,  our  report  does  not  factor  in  any  major  or  minor  economic  external  shocks  arising   from  material  changes  to  the  public  regulatory  environment,  including  those  herein  flagged  as   potentially  being  on  the  regulatory  horizon,  whether  from  Federal  agencies  or  legislators  or   elsewhere.128  While  the  economic  impact  of  alternative  policy  scenarios  can  be  calculated  using   our  model,  such  calculations  lie  outside  the  scope  of  work  for  this  report.      

Sources  of  Industry  Self-­‐Regulation  Reviewed  for  the  Economic  Impact   Model  
The  following  are  the  principal  sources  of  marketing  self-­‐regulation  reviewed  by  our   researchers  and  whose  policies  as  of  December  2012  were  assumed  for  the  mobile  marketing   economic  impact  model.       Mobile  Marketing  Association  (MMA) The  Mobile  Marketing  Association  is  the  premier  global   non-­‐profit  trade  association  representing  all  players  in  the  mobile  marketing  value  chain.  With   more  than  700  member  companies,  the  MMA  is  an  action-­‐oriented  organization  with  global   focus,  regional  actions  and  local  relevance.  The  MMA's  primary  focus  is  to  establish  mobile  as   an  indispensable  part  of  the  marketing  mix.  The  MMA  works  to  promote,  educate,  measure,   guide  and  protect  the  mobile  marketing  industry  worldwide.  Its  best  practices  and  guidelines   documents  may  be  found  here:   http://www.mmaglobal.com/bestpractice                                                                                                                
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 Such  as  might  result  from  privacy  policies  similar  to  Europe’s  sweeping  data  regulations.  See  Avi  Goldfarb  and   Catherine  E.  Tucker,  “Privacy  Regulation  and  Online  Advertising”  (2010)   http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1600259.     91  

CITA  –  The  Wireless  Association.  Founded  in  1984,  an  international  nonprofit  membership   organization  primarily  comprising  U.S.  wireless  communications  access  providers  (mobile   operators)  and  related  services  providers,  suppliers,  and  equipment  manufacturers.  Among   numerous  other  public  policy  and  self-­‐regulatory  issues  of  concern,  CTIA  co-­‐ordinates  the   wireless  access  industry’s  self-­‐regulatory  efforts  that  do  the  following  with  regard  to  mobile   marketing  /  privacy:   • Provide  consumers  with  a  variety  of  choices  and  information  regarding  their  wireless   products  and  services.   • Develops  voluntary  industry  guidelines.     CTIA  Best  Practices  and  Guidelines  for  Location  Based  Services,  available  at   http://www.ctia.org/consumer_info/service/index.cfm/AID/11300.       GSMA.  The  GSMA  represents  the  interests  of  mobile  operators  worldwide.  Spanning  more  than   220  countries,  the  GSMA  unites  nearly  800  of  the  world’s  mobile  operators  with  more  than  230   companies  in  the  broader  mobile  ecosystem,  including  handset  makers,  software  companies,   equipment  providers  and  Internet  companies,  as  well  as  organizations  in  industry  sectors  such   as  financial  services,  healthcare,  media,  transport  and  utilities.     Common  Short  Code  Association  (CSCA).  An  extension  of  CTIA,  the  CSCA  is  the  sole   administrator  of  common  short  codes  (CSC)  for  the  entire  wireless  industry,  thus  making  them  a   coordinating  gatekeeper  for  SMS-­‐  or  MMS-­‐based  marketing  programs.  The  CSCA  oversees  the   technical  and  operational  aspects  of  Short  Code  functions  and  maintains  a  single  database  of   available,  reserved,  and  registered  Short  Codes.  All  service  providers  who  wish  to  register  Short   Codes  for  use  in  mobile  marketing  campaigns  or  publishing  or  selling  mobile  content  via  SMS   must  register  and  obtain  their  Short  Code  via  the  CSCA.       Direct  Marketing  Association,  (DMA)  The  Direct  Marketing  Association  (www.the-­‐dma.org)  is   the  world’s  largest  trade  association  dedicated  to  advancing  and  protecting  responsible  data-­‐ driven  marketing.  Founded  in  1917,  DMA  represents  thousands  of  companies  and  nonprofit   organizations  that  use  and  support  data-­‐driven  marketing  practices  and  techniques.     The  IAB  (Interactive  Advertising  Bureau)  The  Interactive  Advertising  Bureau  (IAB)  is  comprised   of  more  than  500  leading  media  and  technology  companies  that  are  responsible  for  selling  86%   of  online  advertising  in  the  United  States.  On  behalf  of  its  members,  the  IAB  is  dedicated  to  the   growth  of  the  interactive  advertising  marketplace,  of  interactive’s  share  of  total  marketing   spend,  and  of  its  members’  share  of  total  marketing  spend.  The  IAB  educates  marketers,   agencies,  media  companies  and  the  wider  business  community  about  the  value  of  interactive   advertising.  Working  with  its  member  companies,  the  IAB  evaluates  and  recommends   standards  and  practices  and  fields  critical  research  on  interactive  advertising.  Founded  in  1996,   the  IAB  is  headquartered  in  New  York  City  with  a  Public  Policy  office  in  Washington,  D.C.       Digital  Advertising  Alliance,  The  Digital  Advertising  Alliance  (DAA)  is  a  consortium  of  the   leading  national  advertising  and  marketing  trade  groups  who  together  deliver  effective,  self-­‐ regulatory  solutions  to  online  consumer  issues.    
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  AAAA.  The  4A's  is  the  national  trade  association  of  the  advertising  agency  business.  It   represents  more  than  1,100  member  agency  offices  in  the  U.S.  that  employ  over  65,000  people,   offer  a  wide  range  of  marketing  communications  services,  and  place  80  percent  of  all  national   advertising.  The  management-­‐oriented  association  helps  its  members  build  their  businesses,   and  acts  as  the  industry's  spokesman  with  government,  media,  and  the  public  sector.       AAF.  The  American  Advertising  Federation,  headquartered  in  Washington,  D.C.,  acts  as  the   "Unifying  Voice  for  Advertising."  The  AAF  is  the  oldest  national  advertising  trade  association,   representing  40,000  professionals  in  the  advertising  industry.  The  AAF  has  a  national  network   of  200  ad  clubs  located  in  ad  communities  across  the  country.  Through  its  226  college  chapters,   the  AAF  provides  8,000  advertising  students  with  real-­‐world  case  studies  and  recruitment   connections  to  corporate  America.  The  AAF  also  has  nearly  100  blue-­‐chip  corporate  members   that  are  advertisers,  agencies  and  media  companies,  comprising  the  nation's  leading  brands   and  corporations.       ANA.  The  Association  of  National  Advertisers  leads  the  marketing  community  by  providing  its   members  insights,  collaboration  and  advocacy.  ANA's  membership  includes  400  companies   with  9,000  brands  that  collectively  spend  over  $100  billion  in  marketing  communications  and   advertising.  The  ANA  strives  to  communicate  marketing  best  practices,  lead  industry  initiatives,   influence  industry  practices,  manage  industry  affairs  and  advance,  promote  and  protect  all   advertisers  and  marketers.       NAI.  The  NAI  (Network  Advertising  Initiative)  is  a  coalition  of  more  than  70  leading  online   marketing  companies  committed  to  building  consumer  awareness  and  reinforcing  responsible   business  and  data  management  practices  and  standards,  and  which  includes  the  fifteen  largest   online  advertising  networks  in  the  United  States.  As  increasingly  sophisticated  online   advertising  technologies  evolve,  the  NAI  works  to  enhance  consumer  confidence  through   effective  self-­‐regulatory  practices  and  user  choice.       The  Software  &  Information  Industry  Association  is  the  principal  trade  association  for  the   software  and  digital  content  industry.  SIIA  provides  global  services  in  government  relations,   business  development,  corporate  education  and  intellectual  property  protection  to  the  leading   companies  that  are  setting  the  pace  for  the  digital  age.     Association  for  Competitive  Technology  –  ACT  ACT  is  an  international  grassroots  advocacy  and   education  organization  representing  more  than  5,000  small  and  mid-­‐size  app  developers  and   information  technology  firms.  It  is  the  only  organization  focused  on  the  needs  of  small  business   innovators  from  around  the  world.  ACT  advocates  for  an  environment  that  inspires  and  rewards   innovation  while  providing  resources  to  help  its  members  leverage  their  intellectual  assets  to   raise  capital,  create  jobs,  and  continue  innovating.  In  addition  to  its  small  business  membership,   ACT  has  several  Sponsor  Members  including  eBay,  Microsoft,  Oracle,  Intel  and  VeriSign.    

 

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W3C  Group.  The  World  Wide  Web  Consortium  (W3C)  is  an  international  community   where  Member  organizations,  a  full-­‐time  staff,  and  the  public  work  together  to  develop  Web   standards.  Led  by  Web  inventor  Tim  Berners-­‐Lee  and  CEO  Jeffrey  Jaffe,  W3C's  mission  is  to  lead   the  Web  to  its  full  potential.       Application  Developers  Alliance.  The  Alliance  works  to  provide  developers  the  resources  they   need  to  continue  to  innovate  and  build  the  software  economy.  The  Alliance  is  the  voice  of  the   development  industry.  It  educates  legislators  and  regulators,  speaks  on  behalf  of  the  industry,   and  represents  the  millions  of  coders  and  thousands  of  companies  working  and  innovating   today.                  

 

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Social  Benefits  from  Mobile  Marketing  
The  impact  of  mobile  marketing  extends  well  beyond  headline  sales  and  employment  impacts.   The  mobile  device  and  its  commercial  possibilities  are  an  electronic  magic  wand,  presenting   previously  unimagined  tools  for  solving  social  problems,  reallocating  social  resources  more   efficiently  (resources  that  society  often  did  not  realize  it  had,  or  were  under-­‐utilized)  and   generally  delighting  smartphone  users  with  the  opportunity  to  reinvent  or  at  least  reimagine   many  aspects  of  their  daily  lives.       Through  the  fusion  of  location  data  and  social  media,  mobile  has  already  created  revolutionary   opportunities  for  on-­‐the-­‐spot,  real-­‐time  information  sharing  and  value  creation.  It  has  already   created  a  wide  variety  of  new  tools,  including  sharing  of  user-­‐generated  content  and  photos,   sensing  of  weather  conditions,  local  restaurant  recommendations  complete  with  photos  of   diners’  actual  meals,  or  locating  gas  stations  for  almost-­‐on-­‐empty  travelers.  Now,  location-­‐ based  apps  are  helping  mobilize  what  one  might  call  “user-­‐owned  goods  and  services”  such  as   private  apartments  or  private  cars,  new  last-­‐minute,  low-­‐cost  bed-­‐and-­‐breakfast  opportunities,   or  informal  taxi  services  in  big  cities  where  regular  cabs  can  be  hard  to  find.  Mobile  phones’   sensors  and  networks  can  also  help  city  traffic  departments  manage  traffic  through  congestion-­‐ monitoring  traffic  lights,  and  they  can  speed  traffic  flows  through  seamless  mobile  ticketing  and   toll-­‐taking  in  public  and  private  transit.       Smart  device  apps  are  increasingly  being  “baked  in”  to  non-­‐mobile  products  as  a  product   benefit  and  added  functionality.  The  latest  car  models  offer  their  owners  smartphone  apps  with   which  they  can  locate  nearby  electric  recharging  stations  (if  a  hybrid  or  all-­‐electric  vehicle,  for   example),  or  remotely  lock  and  unlock  the  car’s  doors.  There  are  even  apps  to  help  find  the  car   itself  in  a  large  parking  lot.  Likewise,  the  builders  of  tomorrow’s  smart  homes  are  drafting  apps   that  will  be  digital  house-­‐keys  intrinsic  to  the  central  nerve  system  that  controls  security,   climate  control,  energy  efficiency  and  entertainment,  from  wherever  the  homeowner  may  be.       In  the  following  paragraphs  we  look  at  just  a  few  examples  and  try  to  quantify  some  of  the   possible  hidden  social  benefits  that  the  mobile  marketing  revolution  is  making  possible.     Mobile’s  Digital  “Paper  Route”  for  Branded  News  Publishers   Mobile  advertising  plays  a  significant  role  in  helping  to  maintain  widespread  access  to   information.  Today,  most  publishers  of  branded  content  make  their  digital  editions  available   free  of  charge  because  PC-­‐based  readers  simply  wouldn’t  pay  for  online  content,  thinking  they   could  find  as  good,  or  better,  on  another  free  website.  It  was  hard  to  sell  fickle  PC  eyeballs  to   skeptical  advertisers.  With  the  smartphone,  tablets,  and  tailored  publisher  apps,  all  that  has   begun  to  change.  The  publisher  app  creates  a  digital  “paper-­‐route”  turning  anonymous   consumers  into  loyal  daily  (or  weekly  or  monthly)  readers.  And  though  the  tablet  app  hasn’t  yet   solved  the  industry’s  problems  or  stopped  some  publishers  from  charging  for  access  to  their  
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digital  content  (i.e.,  building  paywalls),  recent  developments  do  give  us  insight  into  what  the   growing  tide  of  tablet  and  app-­‐based  mobile  content  consumption—and  eventually  mobile   advertising—may  be  worth  to  consumers  themselves.       Among  the  most  notable  major  publishers  to  have  recently  erected  a  digital  paywall  is  the  New   York  Times,  which  permits  visitors  a  certain  number  of  articles  per  month,  after  which  they   must  purchase  a  subscription  for  further  access.129  To  begin  to  ballpark  the  value  of  mobile   advertising’s  subsidy,  we  note  that  the  Times’  advertising  revenue  for  2012  was  $898.1  million,   and  ad  revenue  makes  up  slightly  less  than  half  of  the  Times’  total  revenue,  on  the  basis  of   which  the  paper  does  slightly  better  than  break-­‐even.130  Newspaper  industry  data  suggests  that   on  average,  roughly  14%  of  industry  ad  revenue  is  digital.131  If  that  conservative  figure  applies   to  the  Times,  that  would  put  its  digital  revenue  for  2012  conservatively  at  $125.7  million,  of   which  about  $16.3  million,  or  13%,  is  likely  due  to  mobile  ad  sales,  based  on  conservative   industry  assumptions.       To  calculate  the  implications  of  this  figure  for  digital  readers,  we  note  that  access  to  the   NYTimes.com  paywall  costs  $15  per  month.132  Thus,  for  this  one  publication,  mobile  advertising   expenditure  is  conservatively  equivalent  to  the  Times  being  able  to  give  away  at  least  some  of   its  content  to  a  minimum  of  90,808  readers  each  month—potentially  over  a  million  readers  per   year—who  might  otherwise  have  to  purchase  a  subscription.  Thought  of  another  way,  a   publisher  who  lost  even  existing  mobile  ad  revenue  would  need  to  make  up  the  loss  by  raising   its  paywall  even  higher,  or  cut  visitors  off  after  only  a  few  pages  of  content.  This  would   represent  a  solution  that  would  not  only  reduce  the  number  of  paying  digital  subscribers  by   thousands,  or  reduce  free  site  visitors  by  the  tens  of  thousands,  but  also  in  all  likelihood,  it   would  leave  the  Times  with  even  less  money  to  cover  the  costs  of  its  expensive  print  editions,   ultimately  putting  some  number  of  print  subscribers  in  jeopardy.       The  digital  paper  route  that  is  the  mobile  app  may  not  save  the  “newspaper”  industry  but  it   may  help  reincarnate  the  news  business.  Mobile  advertising’s  benefit  to  the  consumers  and   publishers  of  other  content  formats  could  be  even  higher.  Consider  the  magazine  industry,   where  some  well-­‐known  publications  have  recently  secured  much  higher  shares  of  digital   advertising  in  overall  ad  revenue,  thanks  in  no  small  measure  to  smartphones  and  tablets.   Wired  magazine,  for  example,  recently  broke  through  the  50/50  barrier  between  print  and                                                                                                              
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 We  recognize  that  The  New  York  Times  is  not  representative  of  the  entire  newspaper  industry.  However,  it  has   an  enormous  readership,  and  for  this  reason  we  suspect  it  is  not  hugely  different  from  other  nationally  recognized   titles  such  as  the  Wall  Street  Journal,  the  Chicago  Tribune  or  USAToday  in  the  newspaper  industry,  or  the  Atlantic,   Sports  Illustrated,  or  Vanity  Fair  in  the  magazine  industry.  More  importantly,  data  about  the  Times  example  is   relatively  accessible.     130  Christine  Haughney,  “Asset  Sales  Help  Lift  Profit  at  New  York  Times  Company,  but  Ad  Revenue  Declines,”   February  8,  2013,  http://www.nytimes.com/2013/02/08/business/asset-­‐sales-­‐help-­‐quarterly-­‐profit-­‐at-­‐times-­‐ company.html,     131  Newspaper  Association  of  America,  March  2012,  http://stateofthemedia.org/2012/newspapers-­‐building-­‐digital-­‐ revenues-­‐proves-­‐painfully-­‐slow/newspapers-­‐by-­‐the-­‐numbers/   132  The  benefit  in  access  to  readers  rather  than  subscribers  is  likely  even  higher,  since  the  terms  of  the  digital   subscription  entitles  the  subscriber  to  share  access  with  one  other  person.  www.NYTimes.com       96  

digital  ad  revenues,  and  other  titles,  such  as  The  Atlantic,  reportedly  do  even  better.133  If  the   Atlantic’s  storied  tradition  of  literate  and  informative  essays  survives  into  another  century,  the   tablet  may  be  the  reason.     Mobilizing  City  Traffic   The  benefit  of  mobile  marketing  is  most  obvious  in  providing  access  to  digital  content.  But  in  a   whole  host  of  ways,  smart  mobile  devices  are  enabling  Americans  to  achieve  levels  of   convenience  and  efficiency  never  before  possible.  Consider  the  problem  of  limited  parking  and   traffic  congestion  in  major  urban  centers  such  as  San  Francisco.    
 

According  to  published  reports,  the  number  of  available  spaces  for  on-­‐street  parking  in  San   Francisco  is  about  320,000.134  The  average  number  of  vehicles  in  San  Francisco  during  the  week   is  505,733,135  and  San  Francisco  drivers  spend  approximately  20–30  minutes  looking  for   parking.136       Thus,  a  half  hour  spent  looking  for  an  open  parking  spot  at  an  assumed  city  driving  speed  of  20   mph  could  result  in  10  miles  of  wasted  travel.  Assuming  gas  consumption  at  29  miles  per   gallon137  for  10  miles  of  driving  results  in  0.35  gallons  used,  or  about  $1.40  worth  of  gas  wasted   while  looking  for  parking  at  2012  gas  prices.138  Generalized  to  505,733  vehicles  in  San  Francisco,   that  could  mean  up  to  $720,000  worth  of  gas  spent  needlessly  on  one  of  life’s  more  annoying   tasks.       Fortunately,  city  officials  and  mobile  app  developers  have  begun  to  step  into  this  breach,  using   location-­‐based  mobile  technologies  to  help  drivers  locate  open  spots  faster.  Assume  the  time   spent  looking  for  a  space  in  San  Francisco  with  a  parking  finder  app  is  cut  in  half,  totaling  15   minutes.  Assuming  nothing  else  changes,  the  savings  in  gas  alone  would  be  70  cents,  which  if   applied  to  all  505,733  vehicles  cruising  the  streets  of  San  Francisco  each  day,  would  save  about   $360,000  worth  of  gas.      

                                                                                                           
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 Nat  Ives,  “Digital  Cracks  50%  of  Ad  Revenue  at  Wired  Magazine,  First  for  the  Title  Is  an  Encouraging  Sign  for   Industry”,  January  03,  2013,  http://adage.com/article/media/digital-­‐cracks-­‐50-­‐ad-­‐revenue-­‐wired-­‐ magazine/238986/.   134  David  LaBua,  “Parking  Quiz  Answer:  SF  cars  vs.  Parking  Spaces.  Who  Wins?”,  February  4,  2011,   http://www.7x7.com/travel-­‐active/parking-­‐quiz-­‐answer-­‐sf-­‐cars-­‐vs-­‐parking-­‐spaces-­‐who-­‐wins.   135  Ibid.   136  Matt  Ritchtel,  “Now,  to  Find  a  Parking  Spot,  Drivers  Look  on  Their  Phones,”  May  7,  2011,   http://www.nytimes.com/2011/05/08/technology/08parking.html?pagewanted=all.   137  Bill  Vlasic,  “U.S.  Sets  Higher  Fuel  Efficiency  Standards,”  August  28,  2012,   http://www.nytimes.com/2012/08/29/business/energy-­‐environment/obama-­‐unveils-­‐tighter-­‐fuel-­‐efficiency-­‐ standards.html   138  http://www.sanfrangasprices.com/Prices_Nationally.aspx     97  

Again,  looking  only  at  San  Francisco,  city  officials  estimate  that  drivers  cruising  for  parking  spots   generate  30  percent  of  all  downtown  congestion.139  This  congestion  substantially  increases  the   volume  of  airborne  pollutants  spewed  by  all  traffic  into  the  Bay  Area  atmosphere.  The  time   savings  to  Bay  Area  drivers  could  potentially  reach  over  125,000  person-­‐hours  per  day.     In  practice,  the  daily  savings  across  these  dimensions  will  likely  be  lower  than  those  we  have   just  hypothesized:  not  all  drivers  would  have  a  parking  locator  app,  and  even  for  those  that  did,   studies  have  yet  to  be  done  that  reveal  whether  they  would  save  30  minutes  or  only  3  minutes.   Yet  our  postulated  savings  in  time,  gas,  congestion,  and  environmental  damage  applies  only  to   drivers  in  a  single  US  city  for  a  single  day.  Whatever  the  results  of  mobile  initiatives  like  San   Francisco’s  turn  out  to  be,  they  still  point  to  eventual  savings  in  the  range  of  hundreds  of   millions  of  dollars  when  considered  for  the  entire  nation  over  an  entire  year—and  just  from  an   app  that  lets  a  driver  “see”  an  open  parking  spot  down  a  side  street  that  she  might  otherwise   have  driven  right  by.   The  24/7  Pharmacy  in  Your  Pocket     Medication  errors—particularly  missed  doses  of  prescribed  medication  or  prescriptions  that  go   unfilled  or  unrefilled—are  a  frequent  cause  of  what  the  medical  profession  calls  “adverse  drug   events”  or  ADEs.  An  ADE  may  cause  the  sufferer  a  sufficiently  severe  complication  as  to  require   an  emergency  room  visit,  a  hospital  stay,  further  health  set-­‐backs,  even  death.  Published   studies  suggest  that  roughly  30%  of  ADEs  may  be  attributable  to  missed  does  of  prescription   medications,  leading  to  700,000  avoidable  emergency  room  trips  each  year,  and  well  over   100,000  avoidable  hospitalizations.140  Needless  to  say,  such  events  cost  the  patient,  the   hospitals,  insurers,  and  taxpayers  enormous  sums:  almost  $300  billion  by  one  NEHI  estimate.141   Thus  if  something  could  be  done  to  address  the  fact  that  50%  of  the  3.2  billion  prescriptions   dispensed  annually  in  the  U.S.  are  not  taken  as  prescribed,  the  tangible  and  intangible   improvements  to  people’s  lives  and  pocketbooks  could  be  truly  meaningful.142     That  “something”  may  involve  smartphone  technology.  A  recent  report  by  Juniper  Research   estimates  that  there  will  have  been  44  million  downloads  of  health-­‐related  apps  to  mobile   devices  in  2012.  The  report  predicts  that  the  number  of  mobile  health  app  downloads  will  reach  

                                                                                                           
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 Matt  Ritchtel,  “Now,  to  Find  a  Parking  Spot,  Drivers  Look  on  Their  Phones,”  May  7,  2011,   http://www.nytimes.com/2011/05/08/technology/08parking.html?pagewanted=all. 140  Center  for  Disease  Control  and  Prevention,  http://www.cdc.gov/MedicationSafety/basics.html  and  U.S.  Agency   for  Healthcare  Research  and  Quality,  http://www.ahrq.gov/qual/aderia/figure2.htm   141 NEHI  press  release,  “NEHI  Research  Shows  Patient  Medication  Nonadherence  Costs  Health  Care  System  $290   Billion  Annually,”  August  11,  2009,   http://www.nehi.net/news/press_releases/110/nehi_research_shows_patient_medication_nonadherence_costs_ health_care_system_290_billion_annually   142  Hayden  B.  Bosworth,  Ph.D.,  and  the  National  Consumers  League,  “Medication  Adherence:  Making  the  Case  for   Increased  Awareness,”  http://scriptyourfuture.org/wp-­‐ content/themes/cons/m/Script_Your_Future_Briefing_Paper.pdf     98  

142  million  by  2016;143  many  of  these  are  prescription-­‐related.  Our  own  search  for   “prescriptions”  in  the  Apple  apps  store  produced  several  hundred  apps,  many  of  which  were   published  free  of  charge  by  leading  pharmacy  chains.  On  inspection,  it  turned  out  that  quite  a   number  of  these  apps  had  very  high  average  ratings  across  thousands  of  users  (very  close  to  the   maximum  score  of  5  stars—at  least  one  popular  pharmacy  app  we  looked  at  had  higher  ratings   than  Angry  Birds,  the  world’s  most  popular  mobile  game.)       These  prescription  reminder  apps  are  not  only  being  downloaded,  they  are  being  relied  upon.   Walgreens,  for  example,  has  apps  whose  prescription  adherence  resources  are  the  most   popular  features,  including  allowing  the  consumer  to  refill  prescriptions  for  pickup  or  delivery,   simply  by  using  the  mobile  phone  to  scan  the  label  of  the  prescription  bottle.  Walgreens  claims   that  such  features  helped  increase  use  of  its  mobile  pharmacy  apps  by  nearly  500  percent  last   year.144       What  could  such  free  mobile  apps  mean  for  individual  categories  of  mobile  subscribers  with   different  diseases?  One  report  summarized  research  findings  suggesting  that  an  additional   dollar  spent  helping  patients  adhere  to  their  prescribed  medication  would  reduce  medical  costs   by  $7.00  for  people  with  diabetes;  $5.10  for  people  with  high  cholesterol;  and  $3.98  for  people   with  high  blood  pressure.145  If  we  assume  conservatively  that  less  than  1%  of  Americans  with   each  of  these  diseases  has  downloaded  and  is  using  these  enormously  popular  apps,  (the   percentages  of  the  American  adult  population  taking  medication  for  each  of  these  diseases  is  in   the  mid  to  high  double-­‐digits),  the  return  in  health  savings  for  just  these  three  conditions  is   likely  already  in  the  tens  of  millions  of  dollars  annually.    

 
 

 

                                                                                                           
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 DK  New  Media,  “Mobile  Technology  in  Healthcare,”  http://healthx.wpengine.com/wp-­‐ content/uploads/2013/01/Mobile_Infographic.pdf   144  Brian  Dolan,  Walgreens  app  adds  pill  reminders,  Rx  transfer,”  March  12,  2012,   http://mobihealthnews.com/16594/walgreens-­‐app-­‐adds-­‐pill-­‐reminders-­‐rx-­‐transfer/ 145  Hayden  B.  Bosworth,  Ph.D.,  and  the  National  Consumers  League,  “Medication  Adherence:  Making  the  Case  for   Increased  Awareness,”  http://scriptyourfuture.org/wp-­‐ content/themes/cons/m/Script_Your_Future_Briefing_Paper.pdf     99  

Conclusion:  From  Mobile-­‐Enhanced  Media     to  a  Mobile-­‐Enhanced  Economy  
For  all  the  large  and  quantifiable  impacts  on  expenditure,  sales,  and  employment  directly   arising  from  mobile  marketing  shown  in  this  report,  another  impact  cannot  be  quantified:  it  is   the  one  occurring  silently  and  invisibly  in  the  heads  of  marketers,  product  designers  and  even   end  customers,  as  they  start  to  envision  a  mobile-­‐enhanced  economy.       As  one  of  the  marketing  experts  with  whom  we  consulted  put  it,  “The  adoption  rates  and   power  of  a  device  that  combines  communication  capabilities,  content  creation,  content   consumption,  search,  endless  apps,  navigation  and  commerce  on  one  platform  are  exciting  and   daunting.”     Daunting  though  the  challenge  may  seem  to  some,  mobile  is  inspiring  the  most  creative   marketers  to  rethink  their  discipline  for  a  world  that  is  no  longer  static;  they  must  reimagine  it   for  a  world  where  marketing  communications  can  occur,  anywhere,  anytime,  via  anything  that   can  be  enhanced  by  being  connectable  to  a  smart  mobile  device.  In  this  new  mobile-­‐enhanced   economy,  the  world  will  no  longer  be  sharply  divided  between  production,  distribution  and   marketing  communications.       Marshall  McLuhan  said  that  the  medium  is  the  message.  In  the  mobile-­‐enhanced  economy  we   see  coming  into  focus,  mobile  transforms  every  object  into  a  medium  and  every  place  into  an   opportunity  for  a  message.       The  challenge  with  mobile  is  the  same  challenge  that  the  Internet  faced  in  the  early  days  (and   to  some  degree  still  faces).    We  believe  it  was  Alan  Schulman  who  said,  "the  plumbing  [is]   ahead  of  the  poetry."  By  mobile’s  poetry,  we  mean  the  mental  equipment  marketers  need  to   envision  marketing  objectives  that  do  justice  to  the  most  versatile,  popular,  and  ubiquitous   communications  platform  the  world  has  ever  seen.  We  hope  now  to  write  an  opening  line  or   two  of  the  poetry  needed  for  tomorrow’s  mobile  marketing  enhanced  world.     Today  though,  the  gap  between  the  “is”  of  mobile  marketing  prose  and  the  “ought”  of  mobile   marketing  poetry  seems  enormous.  Are  many  US  marketers  overlooking  mobile?  Yes.  Are   others  under-­‐utilizing  or  misusing  mobile?  Yes.  Is  that  because  both  groups  of  marketers  are   overlooking  mobile’s  individuality  and  personality?  YES.       Can  we  change  this?  We  certainly  hope  and  believe  so.  Fortunately,  for  all  those  who  are   daunted  by  the  challenge,  many  are  equally  as  excited.  And  these  are  the  marketers  who  are   already  trying  to  imagine  and  define  a  mobile-­‐marketing  enhanced  future.  And  they  are  looking   here  at  home  as  well  as  beyond  our  borders  for  inspiration  from  likeminded  marketers  who  
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have  already  demonstrated  mobile’s  power  in  South  Korea,  Japan,  Singapore,  and  elsewhere.   Advanced  as  we  in  some  ways,  we  still  can  play  catch-­‐up  in  others.     Bringing  about  real  change  will  take  a  more  evolved  view  of  marketing  than  is  found  in  many   CMO  suites  today.  The  dominant  roadmaps  we  have  about  how  brands  are  built  were  drafted   when  the  old,  analog  channels  of  marketing  communication  were  the  only  games  in  town.  To   change  that  will  require  marketers  to  upload  a  new  picture  of  what  the  mobile  device  is  for   marketing:    delete  “screen”  and  replace  it  with  “camera.”       The  mobile  device  jostles  along  with  every  step  in  the  journey  the  consumer  takes  in  daily  life,   from  the  moment  they  wake  until  they  retire  at  night.    Mobile  inputs  like  the  camera,   microphone,  and  content  creation  apps  mean  consumers  possess  powerful  tools  with  which   they  can  co-­‐create  and  co-­‐distribute  product  value  and  messaging.    Marketers  must  learn  how   to  tap  this  resource,  to  be  invited  to  participate  in  this  tremendous  opportunity,  not  stifle  it.     Mobile  is  challenging  marketers  to  build  new  mental  models  of  what  a  medium  is  and  what  it   can  do,  and  why  it  does  it.  The  ones  who  realize  how  mobile  is  erasing  the  old  boundaries  of   what  a  medium  is,  will  be  the  ones  who  use  mobile  to  reinvent  marketing  communications  and   help  usher  in  the  coming  mobile-­‐enhanced  consumer  world.  They  will  not  just  continue  down   the  “screen-­‐based”  highway  that  has  been  the  reflexive  marketing  model  for  the  past  several   generations.       On  the  bright  side,  many  already  know  that  "enabling  the  mobile  camera”  is  the  wave  of  the   future.  We  see  young,  innovative  companies  and  designers  borrowing  creative  models  from   gaming  and  social  connections  to  figure  out  the  new  ways  that  mobile  will  achieve  its  potential   for  all  constituents—the  consumer,  the  marketer,  the  retailer,  and  media  publishers  and   distributors.  Such  visionaries  understand  that  they  will  have  the  best  of  both  worlds  if  they  let   the  consumer  use  mobile  as  it  ought.    They  will  have  create  deep,  imaginative  “value  adding”   communications  and  data  enhancements  to  products  and  services  that  are  so  personalized,  so   local,  so  interactive,  and  so  engaging  that  consumers  will  find  collaboration  irresistible.  And   they  will  use  these  mobile-­‐enhanced  goods  and  services  to  build  a  long-­‐term  relationship  with   consumers  over  time,  thus  building  brand-­‐devotion.       Marketers  may  object  that  our  claim  that  mobile  is  different  and  a  far  more  challenging   phenomenon  than  even  the  traditional  Internet  (to  speak  nothing  of  traditional  offline  media)  is   either  wrong,  or  sets  the  bar  too  high.    We  know  there  are  those  who  question  whether  mobile   really  is  a  "medium"  unto  itself,  and  debate  whether  mobile  is  the  first,  second  or  third   “screen”  for  advertising  seem  to  us  to  be  all  too  common.    Yes,  the  tablet  does  seem  to  be   seducing  some  marketers  wishing  to  replicate  the  “lean  back  on  the  sofa”  attributes  of   television  advertising,  and  ignore  the  smartphone  as  too  different  culturally  and   technologically.      Yes,  purchasing  platforms  for  placing  marketing  onto  "mobile"  are  still  very   nascent  and  evolving.  Yes,  mobile  ad  formats  aren’t  as  standardized  as  buying  agencies  would   like.    

 

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And  yet,  please  forgive  us,  this  seems  like  an  excuse  for  “dumb”  marketing.  The  very  term   "mobile"  in  the  singular  muddies  the  waters,  because  it  obscures  appreciation  of  the   democratic  and  creative  riches  offered  by  mobile’s  different  media,  connections,  sensing,  and   input  capabilities.    Without  seeing  what  these  combine  to  offer  marketers  and  consumers  alike   in  terms  of  versatility,  power  and  personality,  marketers  aren’t  likely  to  re-­‐allocate  and  rethink   investments  and  resources  for  this  coming  popular  marketplace  revolution.   Smart  Marketing  and  the  Social  Contract  of  the  Mobile-­‐Enhanced  Economy   With  commercial  TV,  we  tolerate  advertising  as  part  of  the  price  of  free  entertainment  on  a   device  commonly  known  as  the  “boob”  tube.  With  the  Internet,  we  wised  up  a  bit,  and   acquiesced  to  advertising  that  subsidized  the  cost  of  information.  What  social  contract  can  be   devised  for  the  new  smart  devices?  Will  we  tolerate  advertising  on  mobile  for  faster  sports   scores?  More  amusing  cat  videos  at  our  fingertips?       Recently,  it  was  observed  that  mobile  has  changed  the  communications  landscape  because  of   its  ability  to  “create  a  fluid  means  of  marketing  to  the  changing  situations  and  contexts  as  the   consumer  moves  through  their  daily  life.”146    We  would  agree  completely  if  the  author  had   written  “marketing  IN”  rather  than  marketing  “to.”      Prepositions  can  be  so  important:  Mobile   cannot  be  simply  an  opportunity  to  chase  the  consumer  from  touch-­‐point  to  touch-­‐point  and   pester  them  with  come-­‐ons  and  offers.  We  think  the  mobile  enhanced  consumer  wants  more   than  that.  The  mobile  smart  consumer  will  look  for  reimagined  products  and  services  that  help   them  lead  mobile-­‐enhanced  lives.       Marketers  need  to  appreciate  the  smart  mobile  device  is  an  extension  of  our  person,  its  behind   the  human  shift  to  a  new  always-­‐on,  always-­‐connected,  I  can  enhance-­‐this-­‐moment  HERE  and   NOW  set  of  expectations.  The  mental  revolution  in  mobile  means  brands  must  expect  to   discover  value  for  themselves  and  consumers  in  spaces  that  previously  didn’t  exist  as   communication  opportunities.    We  believe  that  means  the  product  or  service  itself,  and  the   contexts  in  which  they  will  be  used.       The  old  world  of  marketing  separated  mass  broadcasting  from  mass  manufacturing.    That   paradigm  completely  overlooks  what  mobile’s  unique  value  proposition  of  mobility,  portability,   individuality  and  personality  means  today,  and  its  untapped  capacity  to  integrate  with   tomorrow’s  custom-­‐built  3-­‐D  printer  world  of  home-­‐built  products,  services,  and  experiences.   The  most  exciting  opportunity  is  to  empower  individuals  and  brand  communities  to  create   value  for  themselves  for  by  starting  with  the  distinctive  nature  of  the  various  mobile  platforms   and  open  them  up  to  create  a  valued  relationship  between  the  persons,  the  brand  and  the   acquisition,  usage  and  sharing  (and  even  disposing)  of  the  product  or  service.    Go  from  thinking   “from  studio  to  screen”  to  thinking  “from  mobile  camera  to  design  app  to  3D  printer”  bake                                                                                                              
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 “Think  BR:  Why  mobile  is  the  next  big  super  power.”  Justin  Gibbons,  brandrepublic.com,  January  11,  2013.   http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1166273/think-­‐br-­‐why-­‐mobile-­‐next-­‐ big-­‐super-­‐power/?DCMP=EM     102  

mobile  in  all  its  diversity  and  versatility  into  the  product  or  service.  Marketers  will  learn  to  say   to  themselves  and  their  colleagues  “how  can  we  give  consumers  an  app  with  that?”  (or  a  QR   code  or  an  NFC  tap-­‐and-­‐go  connection,  or  a  mobile  social  community,  or…..)       We  believe  that  as  mobile  drives  marketers  towards  smart  marketing  they  will  begin  with  and   borrow  from  cutting  edge  mCRM  already  seen  today.  The  trend  to  mCRM  is  being  created  by   the  confluence  of  big  data,  smart  apps,  and  the  networked  smart  device.  In  the  best  of  these   relationships  the  marketer  doesn’t  “own”  the  media,  much  less  “own”  the  customer.  Instead   they  “own”  the  communications  relationship,  in  the  sense  of  ‘taking  responsibility  for’  whatever   attention  and  interest  the  customer  is  prepared  to  pay  to  the  brand  and  its  mobile  marketing   communications.  The  challenge,  in  a  sense,  will  be  for  marketers  to  envision  mobile  marketing   as  true  conversations  among  equals  building  a  relationship  that,  more  than  ever,  is  two-­‐way   and  truly  peer-­‐to-­‐peer.     Such  relationship  practices  and  mindsets  will  need  to  be  engineered  into  products  and  services   from  the  outset,  not  added  in  after  the  product  “horse”  has  already  raced  out  the  barn  door.   This  marriage  of  mobile  marketing  communications  within  product  design  and  service  delivery   will  need  to  involve  developing  a  new  level  of  trust,  a  new  brand  promise  that  the  marketer   won’t  waste  their  scarce  attention,  creativity  and  passion:  in  other  words,  a  social  contract  in   which  the  marketer  must  agree  to  take  direction  from  the  mobile  “street”  about  how  their   customers  expect  products  to  enhance  their  lives,  and  respond  to  that.    Mobile  is  Madison   Avenue’s  Tahrir  Square  moment.  This  new  responsibility  will  require  reclaiming  the  customer   relationship  from  the  publisher,  retailer,  the  agency,  the  engineers,  the  statisticians,  the  brand   managers  -­‐-­‐  to  let  the  smart  consumer  participate,  even  lead.     Co-­‐creating  engaging,  interactive,  socially  enabled,  folkway-­‐sensitive  and  mobile  micro-­‐climate   respectful  consumer-­‐centric  brand  communications  with  the  next  generation  of  smart  products   and  services  via  the  mobile  device  will  involve  a  curatorial,  service  orientation  for  which   marketing  doesn’t  yet  have  a  proper  language.         Or  does  it?         Mobile’s  true  value  as  a  marketing  communications  platform  may  in  the  end  be  achieved  when   all  of  mobile  access  to  and  engagement  with  marketing  is  thought  of  as  “earned”  moment  by   moment  from  smart  consumers,  including  “bought”  media  of  advertising  and  the  “owned”   media  of  1:1.         After  all,  in  tomorrow’s  mobile-­‐enhanced  economy,  what  will  separate  a  consumers  upload  of  a   photo  of  a  smart  new  use  for  your  product  that  becomes  a  viral  sensation,  and  the  same   consumer  deleting  your  dumbly-­‐designed  product  app  from  their  desktop?    Nothing,  except  a   tap  or  two  on  a  touchscreen.      

 

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Methodology:  Measuring  and  Modeling  US  Mobile   Marketing  Communications  
MLightenment’s  method  for  determining  mobile  marketing’s  economic  impact  on  the  US   economy  involves  its  proprietary  approach  to  modeling  expenditure  and  policy  drivers  of   marketing  communications,  together  with  IHS  Global  Insight’s  econometric  model  of  overall  US   economic  output.147       The  steps  involved  boil  down  to  measuring  the  cause-­‐and-­‐effect  relationship  among  several   basic  quantities,  as  follows:     1. Expenditure  on  mobile  marketing  communications  (in  dollars).   2. Mobile  Marketing  Communication’s  Sales  Impact.  This  is  the  share  of  total  US  Sales   (measured  in  dollars)  that  our  econometric  analysis  reveals  to  be  statistically   attributable  to  (1).   3. Mobile  Marketing  Employment.  This  is  the  share  of  total  US  employees  whose  salaries   and  benefits  are  either  directly  supported  by  expenditure  on  mobile  marketing  (1),   called  “advertiser”  employees,  together  with  the  number  of  employees  necessary  to   fulfill  the  increased  orders  caused  by  mobile  marketing  sales  (2),  called  seller   employees.   4. Marketing  Impact  Ratio  (MIR).  This  compares  the  relative  efficiency  of  mobile   marketing  per  dollar  of  expenditure  within  each  category  of  mobile  marketing  activity   by  industry.  In  simple  terms,  the  calculation  is:  
   

         $  Total  Net  Sales  by  Industry      $  Total  Expenditure  by  Industry   Step  1:  Measuring  Mobile  Marketing  Expenditure   The  analysis  begins  with  a  compilation  of  primary  data  to  determine  the  dollars  spent  on   mobile  marketing  throughout  the  economy  over  multiple  years,  broken  out  by  16  major   industry  groups.     In  gathering  data  for  this  stage  of  our  model,  we  look  for  expenditures  by  marketers  in  order  to   distribute,  exchange  or  receive  marketing  communications  with  prospects  and  end-­‐customers’   via  their  mobile  devices:  in  other  words,  the  variable  costs  of  the  media  buy.  However,  owing  to                                                                                                              
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 The  principal  author  has  worked  with  Global  Insight  to  design  and  conduct  economic  impact  analyses  of  various   aspects  of  the  US  marketing  industry  since  2002.  These  economic  impact  analyses  provided  the  basis  of  his   testimony  to  the  US  Congress,  an  amicus  brief  to  the  US  Supreme  Court,  presentations  to  state  legislators  and   governors,  and  appearances  on  expert  panels  with  members  of  Federal  regulatory  bodies  such  as  the  Federal   Trade  Commission.       104  

the  different  natures  of  the  marketing  activities  and  media  potentially  involved  in  mobile   marketing,  we  recognized  that  some  mobile  media  costs  would  include  creative  costs   (especially  if  it  is  intrinsic  to  the  media  buy);  some  production  costs,  like  printing,  that  are   directly  attributable  to  a  mobile  enhancement  such  as  a  QR  code;  and  certain  technical  costs,   such  as  licensing  of  SMS  platforms,  the  costs  of  mobile  website  programming,  content   management,  etc.  We  do  NOT  include  costs  like  management  time,  cost  of  sales,  cost  of  goods   sold,  billing  and  payment  costs,  shipping  and  handling  costs,  hardware,  etc.  as  part  of  marketing   communications  cost.     To  estimate  the  expenditure  on  mobile  marketing,  we  began  with  Global  Insight’s  baseline   historical  data  and  forecasts  of  total  advertising  expenditure  across  all  media  in  the  US   economy,  including  Internet,  of  which  mobile  was  originally  a  part.  We  then  used  first-­‐  and   third-­‐party  primary  research  to  disaggregate  and  adjust  the  baseline  Internet  expenditure  into   its  component  mobile  media—primarily  mobile  web  and  mobile  email—and  distribute  each  of   these  among  advertising  and  CRM  activities.  Primary  research  was  also  used  to  collect  data  on   expenditure  in  those  mobile  media  not  included  in  mobile  Internet:  mobile  voice,  SMS/MMS,   and  mobile  apps.       For  our  remaining  two  mobile  media  categories,  proximity  and  recognition  media,  we  used   first-­‐  and  third-­‐party  research  to  estimate  shares  of  expenditure  in  Global  Insight’s  reported   expenditures  on  advertising  in  non-­‐mobile  media  that  were  “mobile  enhanced.”  (For  example,   to  estimate  the  share  of  mobile-­‐enhanced  magazine  advertising  within  overall  magazine   advertising  expenditure,  we  developed  conservative  procedures  for  attributing  the  costs  of   enhancing  ads  with  a  QR  code  by  estimating  the  incidence  of  QR  codes  per  100  magazines;  the   incidence  within  magazines  per  100  advertisements;  the  ratio  of  QR  code  size  to  overall  ad  size;   the  average  square  inch  cost  of  magazine  ads,  etc.,  then  repeated  the  exercise  for  SMS  calls  to   action,  etc.)     Step  2:  Modeling  Mobile  Marketing’s  Net  Sales  Impact  on  the  US  Economy   Calculating  the  amount  of  national  sales  caused  by  mobile  marketing  essentially  involves  using   Global  Insight’s  underlying  econometric  model  of  US  economic  growth  and  refining  it  to   statistically  correlate  variations  in  US  and  industry  output  with  variations  in  marketing   communications  expenditure  over  time  and  across  sectors  of  the  economy.         National  Economy  Analysis.  Mobile’s  overall  US  economic  impact  is  calculated  using  the  same   procedure  Global  Insight  uses  for  estimating  the  economic  contribution  of  all  categories  of   industry  investment  to  the  growth  of  industry  output  as  they  flow  through  all  sectors  of  the  US   economy.  To  begin  its  economy-­‐wide  analysis,  Global  Insight  compiles  data  from  US  and  state   government  and  industry  sources,  which  it  transforms  into  a  model  that  represents  a  highly   detailed  flow  of  expenditures  and  sales  through  the  economy,  from  raw  materials  and  energy   inputs  to  plant  and  equipment,  to  factory  employment,  product  transportation  &  warehousing;   office  overhead  and  administration;  until  finally  the  flow  of  goods  and  services  reaches  the   retail  level  and  other  forms  of  final  consumption  by  business  or  consumers.  These  inter-­‐
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industry  sales  and  purchases  flows  produce  a  final  demand  matrix  whose  variation  over  time,   geography,  industry  and  end-­‐customer  segment  is  analyzed  statistically  to  specify  correlation   coefficients  that  connect  categories  of  intermediate  or  final  expenditure  with  output  across  and   within  all  categories  of  sales  activity.       Advertising  Industry  Analysis.  Once  sales  data  have  been  obtained  for  both  the  national  and   industry  levels,  and  the  linkages  between  them  have  been  established,  the  next  step  is  to   statistically  estimate  the  top-­‐level  sales  impact  of  US  advertising.  This  is  done  by  treating  all   other  sales  in  the  model  as  the  dependent  variable  against  which  variation  in  all  demand   factors,  including  advertising  expenditure,  will  then  be  compared.  Using  this  approach,  the   direct  contribution  to  US  output  from  non-­‐advertising  factors  of  production  can  be  identified   and  subtracted  from  the  total;  the  balance  necessarily  represents  the  output  statistically   attributable  exclusively  to  advertising  in  those  media.  In  other  words,  these  are  sales  that   would  not  exist  but  for  advertising  expenditure.  These  advertising  sales  impacts  naturally  vary   for  each  industry  and  state,  based  on  correlations  of  the  relative  weight  of  investment  in   various  categories  of  media  and  advertising,  relative  to  all  other  possible  inputs;  however,  the   overall  model  is  designed  to  ensure  the  sum  of  these  industry  and  state-­‐level  sales  totals  equal   the  national  sales  impact  total  exactly,  thus  ensuring  that  the  resulting  sales  impact  neither   over-­‐counts  nor  under-­‐counts.       Internet  vs.  Traditional  Advertising  Media  Analysis.  The  third  level  involves  establishing   principles  for  re-­‐allocating  overall  advertising  sales  impact  to  individual  digital  and  non-­‐digital   media,  and  performing  a  similar  allocation  for  direct  response  (DR),  and    customer  relationship   management  (CRM)  sales  impacts,  in  order  to  determine  the  “mobile”  component  of  each.   Similar  sales  impact  estimates  were  made  for  the  sales  impact  of  direct  marketing  and  CRM   from  earlier  work  done  by  IHS  Global  Insight.  These  weights  were  adjusted  by  mLightenment  as   necessary  to  eliminate  extreme  values  or  non-­‐conservative  results.       Mobile  Device  Level  Analysis.  The  next  level  involved  ascertaining  the  portion  of  the  net  sales   impacts  attributable  to  marketing  communications  within  individual  digital  and  non-­‐digital   media  to  the  overall  mobile  media  platform.  The  chief  task  was  to  collect  data  that  would  allow   us  to  apportion  a  share  of  “pre-­‐existing”  digital  and  non-­‐digital  sales  impacts  to  the  principal   mobile  device  platforms  (basic  phones,  feature  phones,  smartphones,  and  tablets/e-­‐readers)  to   the  extent  supported  on  each  class  of  device,  and  that  device’s  adoption  rate  among  end-­‐ customers  (both  consumers  and  employees).  (The  DR  and  CRM  adjustments  were  made  using   Global  Insight’s  baseline  sales  impact  totals  estimates  of  direct  response  marketing  (including   CRM)  in  non-­‐mobile  media.)  In  doing  so,  we  looked  at  current  trends  in  underlying  drivers  of   marketing  media  impacts  across  all  media,  such  as  shifting  expenditure  on  media  access  (rising   sales  of  mobile  devices  vs.  declining  expenditure  on  such  important  drivers  of  media  impacts  as   share  of  expenditure  on  media,  differences  in  the  weighting  of  disposable  income  among  key   media  segments,  and  related  factors.  We  made  small  adjustments  for  factors  such  as  share  of   operating  system  (e.g.,  iOS  vs.  Android  vs.  Windows,  etc.)  as  well  as  the  portion  of  devices  with   different  network  access  types  and  speed  (tablets  with  cellular  broadband  vs.  Wi-­‐Fi  only;   smartphones  on  3G  networks  vs.  4G/LTE;  estimate  of  NFC  enabled  smartphones,  etc.,  and  
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several  other  variables.)  The  historical  data  for  mobile  device  adoption  and  expenditure  among   end  customers  was  primarily  sourced  from  Global  Insight.       Individual  Mobile  Media  Level  Analysis.  The  final  level  of  analysis  involved  estimating  the  share   of  overall  sales  impact  from  the  mobile  devices  level  to  the  seven  component  types  of  mobile   media  and  connectivity  technologies  (mobile  voice,  mobile  SMS/MMS,  mobile  email,  mobile   web,  apps,  recognition  technologies,  and  proximity  media).  Here  again,  we  necessarily  began   with  data  describing  the  extent  to  which  each  media  type  was  supported  by  in-­‐market  devices,   and  augmented  it  with  what  was  publicly  available  from  third-­‐party  sources  about  consumer   usage  of  those  various  media  (app  downloading  activity,  data  traffic  from  mobile  web  vs.   traditional  PC  web,  share  of  mobile  consumers  using  shopping  apps,  etc.)       It  is  important  to  note,  however,  that  this  sequence  of  modeling  steps  applies  only  to  the  three   categories  of  marketing  communications  that  represent  variable  (media  buy)  costs:  advertising,   direct  response,  and  CRM;  we  do  not  model  sales  impacts  for  our  fourth  category  of  mobile   marketing  expenditure,  namely  supplemental  services  associated  with  mobile  marketing   communications,  since  they  are  regarded  as  fixed  (overhead)  costs  within  our  model.   Nonetheless,  as  explained  below,  marketer  expenditure  on  supplementary  internal  and   external  services  expenditure  is  included  in  our  model  for  estimating  total  direct  employment  in   mobile  marketing.     Step  3:  Calculating  Mobile  Marketing’s  Employment  Impacts   To  calculate  the  volume  of  incremental  employment  caused  by  mobile  marketing,  (the  second   area  in  which  we  describe  mobile  marketing’s  economic  impact)  we  begin  by  noting  that  there   are  two  categories  of  employees  whose  numbers  we  seek  to  estimate:  employees  directly   involved  with  creating  and  executing  and  supervising  mobile  marketing  communications,  whom   we  call  advertiser  employees,  and  employees  in  non-­‐mobile  marketing  occupations  who  are   employed  exclusively  as  a  result  of  the  successful  use  of  mobile  marketing  to  generate  increase   sales  of  goods  or  services  within  their  industries.       On  the  basis  of  national  employment  statistics,  it  is  possible  to  determine  ratios  of  output  per   employee  by  industry  for  both  categories  of  workers  within  the  Global  Insight  model.       First,  the  number  of  employees  directly  involved  in  creating,  producing,  delivering,  analyzing,   and  managing  mobile  marketing  communications  is  calculated  by  estimating  the  share  of   mobile  marketing  expenditure  devoted  to  salaries  and  wages  at  prevailing  compensation  rates,   after  overhead,  profits,  taxes,  and  so  forth,  are  accounted  for.  This  figure  represents  mobile   marketing  advertiser  employment,  and  includes  both  in-­‐house  mobile  marketers  employed  by   buy-­‐side  client  firms  within  the  16  industry  categories  themselves,  as  well  as  mobile  marketing   staff  employed  on  the  provider  side,  such  as  by  publishers,  digital  ad  networks,  marketing   agencies  and  other  suppliers  to  whom  industries  may  contract  their  mobile  marketing   programs.    
   

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Second,  to  calculate  directly  supported  non-­‐mobile  occupation  employment,  the  model  begins   with  the  net  sales  impact  by  industry  arising  from  mobile  marketing  as  calculated  in  step  2,   above.  Then,  using  average  output-­‐to-­‐wage-­‐rate  ratios  specific  to  each  major  industry  group,   the  model  calculates  the  number  of  employees  required  within  each  industry  in  order  to  meet   the  demand  for  goods  and  services  in  that  industry  represented  by  its  mobile  marketing  sales   impact.  These  employees  represent  a  weighted  distribution  of  incremental  employees  in  non-­‐ mobile  marketing  occupations  across  all  activities  necessary  to  meet  the  incremental  demand   for  that  industry’s  products  arising  from  its  successful  use  of  mobile  marketing,  and  includes   occupational  categories  such  as  those  involved  in  direct  production  (as  in  a  factory)  supervision   and  management,  or  other  production  support  positions,  such  as  personnel  in  delivery,   accounting,  etc.    
 

Combined,  the  sum  of  expenditure  based  (advertising  employment)  and  incremental  sales-­‐ based  (seller)  employees  comprise  total  mobile  marketing  employment.  All  such  employees   represent  total  incremental  employment  that  would  not  exist  but  for  expenditure  on  mobile   marketing  and  its  resulting  increase  to  sales  output  within  each  industry.    
 

Primary  Data  Sources   Each  of  the  steps  above  involves  both  some  primary  data  (whether  obtained  from  government   statistics,  industry  associations,  publicly  available  corporate  information,  the  trade  press,   private  sector  third-­‐party  research  firms,  or  proprietary  first-­‐party  survey  work)  and  modeled   data  (economic  data  derived  from  calculations  performed  on  primary  data).  Step  1  relies  most   heavily  on  primary  data,  while  the  other  two  steps  are  primarily  modeled.  The  following  are  the   principal  data  sources  used  in  the  models:   U.S.  Bureau  of  the  Census,  Census  of  Manufacturing,  Wholesale  and  Retail  Trade,   Transportation  Industries,  Service  Industries   U.S.  Bureau  of  the  Census,  Annual  Survey  of  Services   U.S.  Bureau  of  the  Census,  County  Business  and  ZIP  Business  Patterns   U.S.  Bureau  of  Labor  Statistics,  Industry  Output,  Costs,  and  Profitability   U.S.  Bureau  of  Labor  Statistics,  Industry  and  Occupation  Employment   U.S.  Bureau  of  the  Census,  Population  Census   U.S.  Bureau  of  the  Census,  Current  Population  Survey   U.S.  Bureau  of  Economic  Analysis,  Inter-­‐industry  Transactions   U.S.  Bureau  of  Economic  Analysis,  Capital  Stocks  and  Flows   IHS  Global  Insight,  Inc.,  U.S.  Economic  Service,  Industry  Analysis  Service,  and  Regional  Economic   Service   IHS  Global  Insight,  Business  Market  Insights  and  IT/Telecom  Market  Data  and  Forecasts  

 

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Interpretation   Expenditure.  This  is  the  first  time  that  the  economic  impacts  of  the  mobile  marketing  industry   have  been  estimated.  The  reader  should  be  aware  that  owing  to  the  newness  of  the  industry,   the  data  presented  here  are  subject  to  larger  than  usual  statistical  variability.  This  arises  from   several  factors,  including  scarcity  of  reliable  third-­‐party  data  for  some  segments  of  the  industry;   short  historical  time  frame  for  all  data  sets;  rapidly  changing  technologies  and  business  models;   and  finally,  rapidly  evolving  consumer  media  consumption  habits.       Sales  Impacts.  Interpreting  the  significance  of  the  sales  impact  depends  on  knowing  the  size  of   the  original  base  from  which  it  is  derived.  In  the  Global  Insight  model  used  here,  the  base  is   total  US  sales  (also  known  as  total  nominal  US  output.)  Total  US  sales  differs  from  the  other   principal  measure  of  national  economic  activity,  GDP,  in  that  it  includes  all  intermediate  (B-­‐to-­‐ B)  sales,  whereas  GDP  is  much  smaller  because  only  those  final  sales  representing  final  demand   are  included.  (At  roughly  $33.3  trillion  in  2012,  total  US  sales,  is  somewhat  more  than  twice  as   high  as  2012  US  GDP  of  $15.7  trillion.)  Note  that  some  sales  impact  within  each  media  arises   from  marketing  communications  or  marketing  relevant  information  that  is  generated   organically  within  that  media,  i.e.,  without  expenditure  by  marketers.  Such  sales  are  sometimes   attributed  to  “earned”  or  “word  of  mouth”  media  (in  contrast  to  the  “bought”  media  of   advertising  and  the  “owned”  media  of  1:1  CRM).  Such  marketing  communications  are  created   more  or  less  “free  of  charge”  by  consumers  themselves  (e.g.,  information  created  and  shared   virally  using  mobile  peer-­‐to-­‐peer  (P2P)  media  or  mobile  social  networks)  or  by  bloggers  or   journalists  in  the  normal  course  of  reporting,  etc.   Employment  Impacts.  Our  reliance  on  mobile  marketing  expenditure  to  calculate  the  number   of  mobile  marketing  advertiser  employment  means  that  our  report  likely  understates  the  actual   amount  of  employment  in  this  segment  of  the  industry.  As  many  firms  are  startups,  employees’   salaries  are  often  paid  for  by  VC  funding,  which  our  report  does  not  measure.  Another  likely   source  of  funding  for  employment  is  hidden  subsidies  from  established  firms  developing  new   lines  of  business  within  the  mobile  ecosystem.  An  example  of  this  would  be  a  “branded”  offline   publisher  who  opens  a  new  division  focused  on  creating  mobile  content.  In  this  example,   marketing  communications  expenditure  received  via  the  publisher’s  traditional  media  (which   we  do  not  measure)  implicitly  underwrite  employment  in  the  new  mobile  divisions  until  such   time  as  sufficient  revenues  arrive  to  make  it  self-­‐supporting,  or  the  firm  discontinues  it.     MIR:  When  interpreting  mobile  marketing’s  MIR,  it  is  important  not  to  make  direct   comparisons  to  ROI  metrics  of  individual  firms.  In  our  report,  expenditures  and  sales  impacts   (and  hence  MIR,  which  is  simply  the  latter  divided  by  the  former)  are  measured  for  entire   industry  groups,  and  across  the  entire  economy,  rather  than  at  the  level  of  the  individual   product,  brand,  or  firm.  This  difference  in  level  of  measurement  means  that  the  MIR  figures  

 

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shown  in  our  report  will  normally  be  significantly  higher  than  those  seen  by  marketers  who   calculate  them  for  their  particular  organizations.148     To  see  why  difference  in  measurement  perspective  produces  difference  in  MIR  numbers,  it  is   important  to  remember  that,  all  other  things  being  equal,  marketing  communications   undertaken  by  a  given  firm  or  brand  will  have  both  concentrated  product  sales  lift  effects  and   broader  category  or  generic  sales  lift  effects.  Such  generic  or  category  effects  boost  sales  of   competitors’  products  in  the  category,  even  when  those  products  are  not  advertised.  In   addition,  marketing  communications  can  also  be  expected  to  boost  sales  in  complementary   product  categories  whether  in  the  same  or  different  industries  –  again,  even  benefiting   products  that  do  no  advertising.  149  Because  our  model  is  designed  to  measure  the  sales  impact   of  the  media  as  a  whole,  measuring  industry  and  economy-­‐wide,  our  methodology   automatically  includes  all  external  or  spillover  category  sales  in  our  measure  of  total  sales   driven  by  mobile  marketing.  This  is  not  the  case  for  the  sales  and  ROI  metrics  of  an  individual   firm,  which  are  designed  to  measure  only  sales  accruing  to  themselves  from  their  marketing,   not  those  generated  for  competitors,  much  less  unrelated  industries.                                                                                                                
148

 Economists  Boland,  Crespi,  Silva,  and  Tian  used  IRI  panel  data  representing  over  80%  of  all  prune  sales  in  the  US   to  study  the  ROI  of  TV  advertising  by  Sunsweet  on  behalf  of  its  new  brand  of  “One”  prunes.  This  was  done  from   2008  to  2010,  a  period  when  Del  Monte’s  competitors  did  no  TV  advertising  of  their  own  prune  brands.  The   authors’  principal  finding  was  that  “…the  benefits  [to  Sunsweet]  of  the  advertising  on  average  exceeded  the  costs   on  the  order  of  $1.26  to  $4.35  for  every  dollar  expended  advertising  the  new  product.”  [By  way  of  comparison,  the   mLightenment-­‐Global  Insight  model  indicates  that  the  average  MIR  for  all  advertising  for  2010  for  the  entire   Resources  category  (which  includes  agricultural  products)  was  $3.34  –  remarkably  enough,  squarely  within  Crespi   et  al’s  range  estimate.]  The  authors  go  on  to  note  that,    
 

“firms  selling  homogeneous  products  under  either  perfect  competition  or  under  oligopoly…  forgo  most  advertising   because  of  the  free-­‐rider  effect  noted  by  Alston  et  al.  (2007).  Firms  in  oligopolies  with  differentiated  products,  on   the  other  hand,  create  large  barriers  to  entry  when  those  few  firms  all  advertise  (e.g.,  Coke  and  Pepsi  in  the   carbonated  beverage  industry).”  p.  148-­‐149.  [Emphasis  added.]     In  other  words:  the  need  to  overcome  the  category  free-­‐rider  problem  in  advertising  explains  why  firms  in  certain   industries  with  weakly  differentiated  products  like  agricultural  and  dairy  products  typically  band  together  to   support  “generic”  advertising,  e.g.,  “Got  Milk?”  See  Michael  A.  Boland,  John  M.  Crespi,  Jena  Silva,  and  Tian  Xia   “Measuring  the  Benefits  to  Advertising  under  Monopolistic  Competition.”  Journal  of  Agricultural  and  Resource   Economics  37(1):144–155.     149  This  is  a  very  brief  summary  of  a  heavily-­‐researched  and  theoretically  rich  field  of  academic  inquiry.  For  a  fuller   discussion  and  further  literature,  see  Ulrich  Doraszelski  and  Sarit  Markovich,  “Advertising  Dynamics  And   Competitive  Advantage.”  RAND  Journal  of  Economics  Vol.  38,  No.  3,  2007  pp.  557–592;  Rutz,  Oliver  J.  and  Bucklin,   Randolph  E.,  “From  Generic  to  Branded:  A  Model  of  Spillover  Dynamics  in  Paid  Search  Advertising.”  (May  8,  2008).   Social  Science  Research  Network:  http://ssrn.com/abstract=1024766;  P.  B.  Seetharaman,  Siddhartha  Chib,  Andrew   Ainslie,  Peter  Boatwright,  Tat  Chan,  Sachin  Gupta,  Nitin  Mehta,  Vithala  Rao,  and  Andrei  Strijnev,  “Models  of  Multi-­‐ Category  Choice  Behavior.”  Marketing  Letters.  December  2005,  Volume  16,  Issue  3-­‐4,  pp  239-­‐254;  “An  Empirical   Investigation  of  the  Spillover  Effects  of  Advertising  and  Sales  Promotions  in  Umbrella  Branding.”  Tülin  Erdem  and   Baohong  Sun.  Journal  of  Marketing  Research,  Vol.  39,  No.  4  (Nov.,  2002),  pp.  408-­‐420:   http://www.jstor.org/stable/1558554;  Subramanian  Balachander  and  Sanjoy  Ghose,  “Reciprocal  Spillover  Effects:   A  Strategic  Benefit  of  Brand  Extensions.”  Journal  of  Marketing  Vol.  67,  No.  1  (Jan.,  2003),  pp.  4-­‐13:   http://www.jstor.org/stable/30040507;  among  many  others.       110  

To  illustrate:  suppose  Manufacturer  A  advertises  its  mattress  brand  A.  Such  advertising  will  lift   sales  for  its  own  mattress,  but  will  also  lift  sales  for  mattress  brands  B,  C,  D,  and  E,  even  if  those   brands  do  not  undertake  any  advertising;  later  in  the  year  perhaps,  advertising  on  behalf  of   brands  B,  C,  D,  and  E,  will  lift  sales  for  Brand  A  also.  These  spillover  category  benefits  are  largely   invisible  to  the  individual  firms,  but  are  observable  in  our  model.  In  addition,  mattress   advertising  will  also  lift  sales  in  complementary  product  categories  such  as  bed  linens  (since   some  people  who  have  bought  a  new  mattress  may  purchase  fresh  sheets  to  go  with  it)  or  in   adjacent  industries  (such  as  retailing,  as  when  Brand  A’s  advertising  induces  some  consumers  to   visit  department  stores  with  the  intent  to  buy  some  kind  of  mattress,  but  who  purchase   children’s  clothing  or  a  nightstand  instead.)     In  addition,  many  marketers  construct  their  ROI  metrics  using  different  rules  than  ours.  One   important  difference  involves  the  definition  of  “return.”  As  noted  above,  our  model  defines   “return”  as  total  sales  (top-­‐line  industry  revenue)  attributable  to  mobile  marketing   communications.  Many  private-­‐sector  marketers  construct  ROI  using  narrower,  profit-­‐based   definitions  of  revenue,  such  as  gross  profit  (top-­‐line  revenue  minus  cost  of  goods  sold),  or  net   profit  (gross  profit  minus  marketing  expenses  and  overhead.)  These  narrower  definitions  of   return  also  contribute  to  lower  ROI  results  than  those  reported  in  our  study,  and  by  definition   are  non-­‐comparable  measures,  despite  the  apparently  similar  names.  Another  important   difference  involves  the  time  period  covered  by  ROI:  while  our  model  reports  data  on  an  annual   basis,  some  ROI  constructs  used  by  marketers  expect  the  return  from  advertising  to  accrue   during  a  much  shorter  time  window  –  often  a  quarter  or  two,  or  even  the  few  weeks  of  a   particular  campaign.  Such  approaches  necessarily  exclude  any  sales  with  a  high  latency.  Finally,   of  course,  many  marketers  have  not  yet  adapted  their  measures  to  include  “organic”  sales   arising  from  ‘unearned’  user-­‐generated  communications  in  each  media,  as  discussed  above  on   the  interpretation  of  sales  impacts.   Direct  vs.  Indirect  Impacts  (Sales  and  Employment).  While  the  impacts  of  mobile  marketing   reported  using  this  methodology  are  very  substantial,  our  approach  is  inherently  conservative.   Our  first  reason  for  saying  this  has  to  do  with  the  narrow  focus  of  our  modeling  approach.  We   purposefully  chose  to  quantify  only  the  directly  attributable,  industry-­‐wide  demand-­‐generating   effects  that  are  the  business  logic  of  any  type  of  marketing  communications.  Unlike  many  other   economic  impact  studies,  our  approach  excludes  most  of  the  wider  mobile  media  ecosystem’s   expenditure  and  revenues,  including  most  of  the  multi-­‐billion  dollar  cellular  provider  industry   and  its  related  employers.  We  also  exclude  mobile  marketing  indirect  or  “cascade”  economic   impacts,  whether  measured  as  sales  or  employment.  Such  omitted  indirect  impacts  would   comprise  additional  billions  of  dollars  spent  on  non-­‐mobile  related  inputs,  household   consumption  items  bought  by  mobile  marketing  employees,  etc.       So  while  such  “traditional”  secondary  impacts  are  real,  measurable,  and  very  much  a  part  of   mobile  marketing’s  contribution  to  national  economic  activity,  we  do  not  think  that  such   secondary  impacts  would  paint  a  clear  or  accurate  picture  of  mobile  marketing’s  fundamental   value  to  the  US  economy  as  the  industry  itself  best  understands  it.    

 

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APPENDIX  I:   Summary  Tables  for  Expenditures,  Sales,     and  Employment  Impact  by  Industry  
Table  52:  Total  Mobile  Marketing  Spending  ($  Millions)  
Industry  Group   Resources     Manufacturing,  CPG   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  CPG   Retail  Trade,  Other   Transportation  and  Warehousing     Information     Finance,  Insurance,  Real  Estate   Professional  and  Business  Services     Educational  Services     Health  Care  and  Social  Assistance     Arts,  Museums,  Sports,  and  Recr.     Accommodation  and  Food  Services     Other  Services   Government   Total   Source:  mLightentment   2010   42   139   269   72   107   397   93   240   470   152   20   56   17   68   145   116   2,405     2011   74   227   471   119   171   648   156   389   784   245   36   95   27   110   227   179   3,957     2012   132   382   842   202   281   1,082   266   648   1,332   407   64   164   44   181   371   294   6,693     2013   218   597   1,373   322   433   1,676   422   991   2,080   632   105   265   67   281   562   432   10,456     2014   323   867   2,023   473   625   2,425   612   1,401   3,032   903   156   396   95   403   807   622   15,162     2015   446   1,123   2,691   630   804   3,164   814   1,778   4,017   1,163   204   539   120   512   1,028   771   19,806     CAGR   2010-­‐2015   61%   52%   59%   54%   50%   51%   54%   49%   54%   50%   59%   57%   48%   50%   48%   46%   52%    

 

 

 

 

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Table  53:  Total  Mobile  Marketing  Sales  Impact  ($  Millions)  
Industry  Group   2010   2011   2012   2013   2014   2015   CAGR   2010-­‐ 2015   50%   57%   54%   53%   58%   55%   52%   48%   49%   52%   57%   55%   52%   55%   54%   49%   52%    

Resources     Manufacturing,  CPG   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  CPG   Retail  Trade,  Other   Transportation  and   Warehousing     Information     Finance,  Insurance,  Real   Estate   Professional  and  Business   Services     Educational  Services     Health  Care  and  Social   Assistance     Arts,  Museums,  Sports,  and   Recr.     Accommodation  and  Food   Services     Other  Services   Government   Total   Source:  mLightentment  
 

419   1,563   7,819   1,134   1,203   9,352   1,916   4,783   11,735   2,877   743   973   242   762   1,975   1,129   48,627    

729   2,735   14,331   1,980   2,083   16,501   3,489   8,161   20,580   4,887   1,285   1,706   410   1,322   3,315   1,788   85,300    

1,151   4,670   23,680   3,208   3,548   27,362   5,528   12,883   32,634   8,082   2,125   2,784   671   2,214   5,493   2,971   139,003    

1,777   7,488   37,405   5,029   5,701   43,092   8,710   19,653   49,893   12,778   3,431   4,407   1,041   3,519   8,572   4,437   216,931    

2,511   11,124   53,587   7,256   8,559   62,690   12,323   27,590   70,181   18,472   4,975   6,508   1,492   5,168   12,633   6,497   311,566    

3,230   15,120   67,650   9,494   11,885   83,214   15,470   34,021   87,492   23,657   6,995   8,621   1,949   6,897   16,964   8,314   400,971    

 

 

 

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Table  54  Mobile  Marketing  Advertiser  Employment  by  Industry    
Industry  Group   Resources     Manufacturing,  CPG   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  CPG   Retail  Trade,  Other   Transportation  and  Warehousing     Information     Finance,  Insurance,  Real  Estate   Professional  and  Business  Services     Educational  Services     Health  Care  and  Social  Assistance     Arts,  Museums,  Sports,  and  Recr.     Accommodation  and  Food  Services     Other  Services   Government   Total   Source:  mLightentment   2010   141   449   878   223   359   1,342   316   780   1,522   520   71   192   58   236   501   397   7,983     2011   241   704   1,476   354   556   2,113   511   1,220   2,449   809   122   315   90   367   756   590   12,672     2012   428   1,176   2,617   598   909   3,502   868   2,016   4,128   1,336   214   543   146   603   1,228   964   21,275     2013   711   1,852   4,296   955   1,412   5,465   1,386   3,109   6,463   2,093   353   884   223   942   1,875   1,432   33,453     2014   1,058   2,697   6,365   1,408   2,047   7,957   2,023   4,429   9,436   3,010   526   1,328   316   1,361   2,707   2,075   48,744     2015   1,473   3,512   8,522   1,880   2,655   10,459   2,712   5,667   12,522   3,912   693   1,822   406   1,747   3,478   2,594   64,053     CAGR   2010-­‐2015   60%   51%   58%   53%   49%   51%   54%   49%   52%   50%   58%   57%   47%   49%   47%   46%   52%    

   

 

 

114  

 

Table  55  Mobile  Marketing  Seller  Employment  by  Industry  
Industry  Group   2010   2011   2012   2013   2014   2015   CAGR   2010-­‐ 2015   46%   53%   49%   46%   55%   51%   47%   45%   42%   54%   47%   49%   47%   51%   48%   49%   49%    

Resources     Manufacturing,  CPG   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  CPG   Retail  Trade,  Other   Transportation  and   Warehousing     Information     Finance,  Insurance,  Real  Estate   Professional  and  Business   Services     Educational  Services     Health  Care  and  Social   Assistance     Arts,  Museums,  Sports,  and  Recr     Accommodation  and  Food   Services     Other  Services   Government   Total   Source:  mLightentment  

1,913   3,101   18,581   1,497   5,280   33,630   11,053   10,696   24,675   18,482   9,461   9,007   2,037   12,454   19,396   7,649   188,913    

3,185   5,143   30,488   2,333   8,796   55,863   18,644   17,116   41,895   31,274   15,888   15,167   3,315   20,385   31,378   12,045   312,914    

4,913   8,546   49,274   3,701   14,872   90,182   29,018   26,532   63,826   53,237   25,346   24,249   5,304   33,277   50,237   20,049   502,562    

7,259   13,730   78,655   5,695   23,607   141,563   45,060   39,632   92,826   85,235   38,395   37,360   7,859   51,640   75,408   29,761   773,685    

9,817   20,003   110,428   7,970   35,103   202,120   62,754   55,294   121,680   124,648   51,301   52,722   10,960   74,828   107,822   43,568   1,091,017    

12,531   26,160   135,741   10,054   47,074   262,042   76,690   68,656   143,321   159,493   66,057   66,171   13,787   97,492   139,066   55,253   1,379,587    

 

   

 

 

115  

Table  56  Marketing  Impact  Ratio  for  Mobile  by  Industry  
Industry  Groups   Resources  (Agriculture,  Mining,   Utilities,  Construction)   Manufacturing,  Consumer   Packaged  Goods   Manufacturing,  Other   Wholesale  Trade     Retail  Trade,  Consumer  Packaged   Goods   Retail  Trade,  Other   Transportation  and  Warehousing     Information     Finance,  Insurance,  Real  Estate   Professional,  Scientific,  and   Business  Services     Educational  Services     Health  Care  and  Social  Assistance     Arts,  Museums,  Sports,  and   Recreation     Accommodation  and  Food   Services     Other  Services   Government   TOTAL  MIR   Source:  mLightentment   2010   10.03   9.47   29.07   15.75   11.28   23.54   20.63   19.91   24.94   18.87   36.37   17.43   14.24   11.22   13.58   4.70   20.71     2011   9.84   10.10   30.45   16.66   12.18   25.46   22.40   20.96   26.26   19.94   35.32   17.98   15.18   12.07   14.59   5.00   22.06     2012   8.72   10.08   28.13   15.86   12.62   25.30   20.77   19.88   24.49   19.86   32.99   16.95   15.16   12.23   14.79   5.12   21.20     2013   8.15   10.29   27.25   15.63   13.15   25.72   20.66   19.83   23.99   20.21   32.55   16.61   15.47   12.54   15.24   5.26   21.14     2014   7.78   10.53   26.49   15.33   13.70   25.85   20.14   19.69   23.14   20.46   31.83   16.42   15.78   12.84   15.66   5.44   20.92     2015   7.24   11.12   25.14   15.06   14.77   26.30   19.01   19.13   21.78   20.34   34.22   15.98   16.19   13.46   16.51   5.79   20.56    

 
 

 

 

116  

APPENDIX  II:   Definitions  of  Major  Industry  Groups  
For  more  detailed  information,  please  see  the  “Industry  Groups”  workbook  in  the   accompanying  spreadsheets.    
Industry   Code   i11t23   Industry  Title   Resources  (Ag.,  Mining,  Util.,  Constr.)   NAICS  Codes   11,  21,  22,   and  23   311,  3254,   3256,  31211,   and  31212   Industry  Description   Includes  establishments  engaged  in   agriculture,  mining,  utilities   services,  and  construction   Includes  establishments  engaged  in   manufacturing  of  consumer   packaged  goods  (CPG)  

i3cpg  

Manufacturing,  CPG                                      

i3oth  

Manufacturing,  Other  Products                

3  excl.  CPG   Includes  all  manufacturing   manufacturing   establishments  other  than   consumer  packaged  goods   42   Includes  establishments  engaged  in   wholesale  trade  

i42   i44cpg  

Wholesale  Trade                                             Retail,  CPG                                                    

4451,  44529,   Includes  establishments  engaged  in   44611,  44612,   retail  trade  of  consumer  packaged   44619,  and   goods  (CPG)   4542   44,  45  excl.   CPG  retail   48  and  49   Includes  all  establishments  engaged   in  retail  trade  other  than  consumer   packaged  goods   Includes  establishments  providing   transportation  of  passengers  and   cargo,  warehousing  and  storage  for   goods,  pipeline  transportation,  and   support  activities  related  to  modes   of  transportation   Includes  publishing  industries   (including  software  publishing),   motion  picture  and  sound  recording   industries,  telecommunication   industries,  web  search  portals,  data   processing  industries,  and   information  processing  industries  

i44oth  

Retail,  Other  Products  and  Services    

i48a49  

Transportation  and  Warehousing              

i51  

Information                                                    

51  

 

117  

i52a53  

Finance,  Insurance,  Real  Estate            

52  and  53  

Includes  establishments  engaged  in   banking  and  other  financial  services,   insurance,  and  real  estate  rental   and  leasing  

i54t56  

Prof,  Scientific,  Business  Services    

54,  55,  and  56   Includes  establishments  engaged  in   professional,  scientific,  and   technical  services;  management  of   companies;  administrative  and   waste  management  services   61   Includes  establishments  engaged  in   instruction  and  training  and   includes  schools,  colleges,   universities,  and  training  centers   Includes  establishments  providing   health  care  and  social  assistance  for   individuals;  includes  offices  of   physicians  and  dentists,  hospitals,   diagnostic  centers,  child  day  care   services  etc.   Includes  establishment  that  operate   facilities  or  provide  services  to  meet   varied  cultural,  entertainment,  and   recreational  interests  of  their   patrons;  includes  theater   companies,  dance  companies,   sports  clubs,  agents  and  managers   of  artists,  museums,  zoos,  parks,   casinos  etc.   Includes  establishments  providing   customers  with  lodging  and/or   preparing  meals,  snacks,  and   beverages  for  immediate   consumption   Includes  establishments  providing   services  not  classified  elsewhere   such  as  equipment  and  machinery   repair,  personal  care,  death  care,   pet  care,  photofinishing  etc.   Includes  federal,  state,  and  local   government  establishments  

i61  

Educational  Services                                  

i62  

Healthcare  and  Social  Assistance          

62  

i71  

Arts,  Entertainment,  and  Recreation    

71  

i72  

Accommodation  and  Food  Services            

72  

i81  

Other  Services                                              

81  

i92  

Government                                                      

90  

 

 
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