2013 is shaping up to be the biggest year for mobile so far, as more consumers than ever shift over to smartphones and tablets: 17.4 million iOS and Android devices were activated on Christmas day alone. These numbers support the trends we saw in 2012 as smartphones overtook feature phones and opened up new opportunities for rich and engaging mobile advertising. There was also the launch of Wi-Fi on the London Underground, and soon we'll see Wi-Fi rolled out across London's iconic black cabs, so the opportunities for mobile advertising to continue to evolve are huge. Two other big trends that will make a big impact in 2013 are 4G, which will become more widely available across the UK, and also more activity around mobile payments, with banks and start-ups pushing cashless payments via mobile.
Mobile advertising is already a lucrative business, worth some $6.43 billion globally in 2012. And it's fast-evolving industry: changes to technologies and consumer habits mean that opportunities to drive greater engagement and new advertising formats are appearing all the time. Facebook is one company that is now benefiting from these opportunities. As reported on The Huffington Post, more of Facebook's users logged onto the site with mobile phones rather than PC bringing in 23% of advertising revenue - up from 14% in the previous quarter. Perhaps the biggest new opportunity has been created by the launch of 4G mobile services by UK operator EE.
The technology behind 4G, LTE, is up to five times faster than 3G. While at the moment EE is the only 4G network, in May the other major networks will launch their own 4G services. This should have a direct effect on the amount of rich media (e.g. video) advertising offered to mobile users. Data from the Internet Advertising Bureau showed that spend in the UK on text ads and display banners was £41 million in the first half of the year, with 20% of this being rich media adverts. Research from Medialets showed consumers spend an average of 20 seconds on mobile rich-media ads increasing to a minute when additional features like games were included. These formats are appealing as they deliver improved metrics to advertisers, which helps create healthier campaigns. The long-term view here is that 4G could usher-in significant changes. The increased speeds delivered 4G has the ability to for retailers to offer high-bandwidth mobile downloads in-store to complement their physical offerings. That means advertisers can get creative.
There will also be a real shift in the devices we see in the hands of consumers in 2013. Perhaps we'll see the iPad losing its iron grip: several analysts say Apple's share of the tablet market has already dipped below 50%. Yes, the iPad is still the market leader, but with the Microsoft Surface, Google Nexus 7, Nook, Kindle Fire HD, Galaxy Tab and more to choose from the sector is more diffused and competitive than when the iPad first launched.
Mobile payments will also be an area to keep an eye on over the course of 2013. Credit card providers and banks are very focused on mobile and 2012 was the year many of them forged alliances in mobile. For example, Telefónica agreed a deal with MasterCard, whilst Vodafone set-up Smart Pass: both smart moves that will no doubt prove to be extremely lucrative down the line. In the UK, all four major UK networks set up Weve, which offers a central hub for buying ads and targeted offers to UK mobile subscribers, and will most likely offer a 'mobile wallet' product in time.
The year ahead will show the strategies behind these deals, and how they will turn into live services and perhaps even some new technologies to drive the payment industry forward. In the same space Apple will probably add more functionality to its Passbook loyalty app to compete with Groupon and Voucher Cloud, and big brands like Starbucks will launch their own loyalty apps directly to consumers. If this includes payment, the knock-on effect will be huge and the market will begin in earnest.
It seems strange to say that these are still early days for mobile, as it's hard to remember a time that we didn't have our phones by our side every minute of the day. But the reality is over half of us have a smartphone in the UK, and the potential is there for growth both in users and also how we use our phones for more of our every day life. Undoubtably in twelve months time we will be talking about how far mobile has expanded in 2013, and how much further it still has to go.
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