J’son & Partners Consulting presents short results of the research: Russian and Global Mobile Advertising Markets, Results of 2014.
Global Mobile Advertising Market
Share of mobile advertising in 2014 was 23,3% and will reach 50,9% of Digital advertising market in the world by 2018 – (Data by emarketer).
In 2014, Mobile advertising market volume increased for 81,8% and was estimated in 32,65 bln.USD, that is almost ¼ of the Global digital advertising market volume in general.
Costs on mobile advertising in long-term perspective will grow, but starting 2014, market growth is slowing down due to the following fact - new mobile opportunities for advertising develop faster than companies’ demand on such type of advertising.
Format of display advertising (on-screen) is leading in the mobile advertising market structure – the largest market segment, which will remain in this status. Due to the increased sales of tablet PCs (key terminal for video advertising), we expect considerable growth of video advertising category.
Advertising format based on search services and maps will be a leader due to the popularity of geolocation services. With the help of such services users’ geolocation information can be received via auto-functions in phones, or thanks to users’ activity, who mark theirs’ location for social networks, via Foursquare and Pinterest.
As a result, advertisers will be more interested in mobile channel for advertising – which facilitates targeted access to the end customer.
Geographical Structure of the Mobile Advertising Market
North America: the most considerable growth due to the large volume of companies’ advertising budgets and high level of mobile world development.
Western Europe: mobile channel will become more integrated in advertising company, historical budgets’ distribution on print and radio advertising will be replaced by distribution on mobile channel.
Pacific Region and Japan: is a mature mobile advertising market – lower growth rates during 2012 – 2018, China and India mainly provide the growth in the region.
On the developing markets – Latin America, Eastern Europe, Far East and Africa – mobile advertising growth will be going step by step after the development of technologies and stabilization of countries’ economies. The growth in these regions is happening thanks to Russia, Brazil and Mexico.
Tendencies on the Global Mobile Advertising Market
- Internet-Surfing Mainly via Mobile Devices and Tablet PCs
According to Cisco’s forecasts: mobile data transfer traffic will grow 11 times in the world by 2018 vs results of 2013, the volume will reach 15,9 Exabyte per month. Increased consumption of internet traffic on mobile devices will follow the exponential tendency. Some of global tendencies facilitate this:
- Increasing penetration of LTE networks;
- Lower tariffs on mobile traffic;
- Smartphones’ prices same or lower than prices on classical phones;
- Expansion of mobile devices’ range: smartphones and tablet PCs;
- Operators sponsor the purchase of mobile devices;
- Fashion on mobile devices (mobile devices became a fashion trend, as glasses or other accessories, that cut devices’ service term);
- Wide penetration of mobile devices with large screens.
- Smartphones Replace General Phones
Price cutting on smartphones and launch of operators (sponsor) smartphones influence the changes in the mobile devices market structure (correlation of smartphones and general mobile phones), which, on the other hand influence mobile advertising market structure – it will lead towards increasing share of media advertising and decreasing share of advertising in messages.
- Increasing Level of Investments into Mobile Project
Many global investments funds actively invest in mobile technologies for the last five years, as this segment will be the key market for content consumption.
- Increasing Importance and Popularity of RTB Advertising
RTB advertising became a mainstream in 2013, according to western experts, this tendency will keep going and market segment will be 7,5 bln.USD by the end of 2014, that is 50% more than in 2013. Costs on RTB advertising will hit 13,9 bln.USD by 2016.
- Increasing Popularity of Rich Media
Rich Media advertising will be focusing on active attraction of the audience, receiving large number of clients and increase the level of sales.
- Synergy of Online and Offline Channels
Advertisers use online and offline channels for advertising distribution. Companies organize campaigns via social media, i.e. dive in the social advertising channel. Advertisers use QR-codes, implement creative expositions in shops’ windows, and also invent interactive scenes on advertising panels.
- Customization of Advertising Apps
Advertising companies are becoming more oriented on certain audience, there is a trend to personalize offers and services for small audience.
- Wearable Devices Market Development
Wearable technologies will soon get its popularity. Exactly now, there are smart devices with the access to Internet and opportunity to install additional external apps – potential channel of mobile advertising distribution.
Russian Mobile Advertising Market
J’son & Partners Consulting: Russian mobile advertising market will be 111,8 mln.USD as of the end of 2014, that is 15% higher than indicator in 2013 – 97,3 mln.USD.
Mobile advertising market in Russia has a positive dynamics, according to J’son & Partners Consulting’s forecast, market will be estimated in more than 243 mln.USD by 2017.
J’son & Partners Consulting’s experts specify three mobile advertising market segment: display (On-screen), advertising in messages and contextual advertising. Display advertising remains the most significant market segment and will be the same in the coming future. Measures against SMS-spam and other government regulations seriously influenced advertising messages market segment, and all of this reflected on the segment’s dynamics.
Tendencies on the Russian Mobile Advertising Market
- Some large advertisers consider mobile advertising as a premium channel and try using targeted advertising. Mobile advertising is spotted more and more often in media-mixes of brands.
- Such instruments as RTB-platforms (mobile advertising market) launched the market and influenced positively.
- The number of downloads increased: Russian users start to download more apps, than before.
- Mobile browsing is growing. Over half of traffic of largest social network – Facebook – is generated by mobile internet users. Monthly audience (active users) of social network is over 1,35 bln.people all around the world, as of October 2014, that is 14% higher than last year indicator. This trend is timely for Russia also.
- Mobile advertising networks in Russia are gaining popularity, now many small companies can carry out advertising campaigns in mobile Internet, i.e. the number of mobile advertising participants is growing, and as a result, the competition is tougher.
- Tablet PCs changed the consumption of mobile Internet, special apps are being developed for such type of devices, which differ from smartphones apps.
Russian Mobile Advertising Market – Drivers and Barriers
- Broader use of mobile phones for web-browsing.
- Increased popularity of mobile advertising auctions in real time (RTB), which allow advertiser to control campaigns and customize settings, simultaneously provide better opportunities for platforms to monetize theirs’ advertising places.
- Smartphones and tablet PCs expansion and wide penetration of mobile devices.
- Expansion of operators’ smartphones range – allows to increase market share, the cost of such phones, in most cases less than $100.
- Distribution of 3G, LTE. Increasing throughput channels’ capacity.
- Smartphones – improvements on technological level.
- Distribution of e-commerce.
- Increasing popularity of the model – pay per click; pay per action. The most popular format of such advertising – is payment per call – user see the advertising message on mobile phone screen and by clicking on it activating the call to advertiser. Such advertising model allows to improve conversion and attract advisers, which do not trust mobile advertising.
- New non-standard advertising platforms (such as – mobile advertising in Moscow metro).
- Synergy of 2 markets – Mobile advertising and Internet advertising.
- Technical restrictions on SMS advertising. Technical messages on mobile phone can include just several words, cannot include multimedia (pictures, audio, video) and is suitable not for every advertising campaign.
- Legislative restrictions (Law about Communication, 2014). Key demand – user should express its consent on receiving mass messages on the phone. Mass messaging obtained bad image in eyes of advertisers and users, due to wide distribution of SMS-fraud and illegal spam.
- Passivity of advertisers – prefer general promotion channels for goods, services or brand (TV, press, Internet).
- Lack of premium platforms – selected high quality platforms, for example, Facebook, with opportunity to cover wide audience.
- Low advertisers awareness about mobile advertising opportunities.
- Negative economic situation in Russia.
WapStart, Managing Director
Mobile advertising market passed the basic development stage and is now launching the active growth stage. Low cost smartphones and tablets with Internet access helped to reach this high. Wider penetration – due to the geography and to the fact that new age groups joined technologies: elderly and children.
Today, in terms of crisis, when marketing budgets are cutting down, growth rates of advertising market can slow down, but general tendency will keep the same. Mobile advertising is still the most budgeted type of placement. Development of focused targeting based on Big Data and creation of new formats make it the most effective channel for communication with the audience. In terms of cutting budgets and increasing importance of mobile internet, advertisers inevitable will pay attention on mobile advertising as the most profitable type of promotion.
VimpelCom, Head of Media Planning Department
Despite the current situation, when share of mobile advertising in media mix is on relatively low level, we understand the importance of this media-channel. Mobile advertising allows to cover active modern audience, which research everything new, sometimes they are being called trend setters.
A lot of advertisers do not understand the importance of this channel, and as a result, it remains relatively free from extra advertising “noise”: small amount of messages, low price because of low demand and efficiency of rare advertising banners in mobile devices – higher. The only thing, technologies are yet constraint advertisers: lack of extended options for targeting, non-unified collection of statistics and, the most important, low opportunities for analytics. But the example of developed countries in this direction showed that technical questions will be earlier or later solved, and will open new efficient channel for communication with audience for advertisers.
QIWI, Manager of Consumers’ Data Analysis Group
Same as major advertising market participants, we forecast decrease in volume of advertising investments in 2015. But, at this point, in the highest demand are those types of advertising, which allow to address to safe and potentially interested clients, with a low cost per contract at the same time. Of course, we are talking about high quality targeted advertising, such as advertising on payment terminals. During many years, they had been used as a media platform, and also play the role of performance marketing instrument.
AdCamp, Marketing and Sales Director
Mobile advertising – not a new media, but rather an inevitable part of digital-strategy for brand promotion in the process of new product market launch, increase of popularity and targeting on performance-marketing – which aimed at increase of sales. Of course crisis influenced the market and all sphere of life.
Especially car industry decreased its activity during winter, due to the volatility of exchange rate of the RUB, at the same time developers and pharmacy became more proactive.
According to the TNS data, as of December 2015, share of mobile devices’ users, who used internet at least once per month, was 68% in Russia and 73% in Moscow (of the total Internet users). Such fact confirms big movements on the mobile market; we are forecasting volumes’ growth in 2015 not less than twice vs 2014, despite sanctions and economical crises. Borders between web and mobile will fade away with the development of multiplatform technologies, as clients are interested in certain results and optimized costs on traffic purchases. Mobile advertising is differ also because it is relevant, always is available for users, relatively low advertising “noise”, higher CTR and low cost per showing, rather than in web. Some large Russian and foreign clients tested and estimated mobile advertising in 2014: P&G, Unilever, Hyundai-Kia, Megafon, FSK Leader etc.
Our company is counting on affordable prices for clients, clearness of mobile traffic, improvement of technologies and targeting in our own AdCamp system, individual approach to every customer, and we also making accent on non-standards and development of creativity, interactive banners and landings. AdCamp is working with western and eastern partners and clients, but Russian market is still a priority. We see perspectives for ourselves and mobile advertising market – increase of turnovers and connection of new resources in 2015.
Detailed Results of the Research are Presented in the Full Version of the Report: Russian Mobile Advertising Market, Results of 2014
Example of the Content
3. Mobile Advertising Market Classification and Terminology
4. Global Mobile Advertising Market Overview
4.1. Mobile Advertising Market Tendencies
4.2. Market Volume and Dynamics, Forecast, 2012-2017
5. Russian Mobile Advertising Market Overview and Analysis, 2014-2017
5.1. Mobile Advertising Market Structure and Participants: Operators, Content-Providers, Large and Independent Agencies
5.2. Russian Mobile Advertising Market, 2012-2017
5.2.1. Russian Mobile Advertising Market Volume, 2012-2014
5.3. Russian Mobile Advertising Market by Distribution Channels: SMS/MMS, USSD, Cell Broadcast, Apps Advertising, Branded Mobile Content, Special Campaigns
5.3.1. Share of Mobile Channels on the Russian Mobile Advertising Market, 2012-2017
5.3.2. SMS/MMS, Cell Broadcast / USSD
5.3.3. Advertising in Apps
5.3.4. Branded Mobile Content
5.3.5. Special and Integrated Campaigns (BTL)
5.4. Russian Mobile Advertising Market in Apps by Platforms
5.5. Cases and Examples of Implementation
5.5.1. Description of Successful Russian Cases of Mobile Advertising and Marketing
5.6. Mobile Advertising Market Development Forecast
5.6.1. Global Trends – Mobile Advertising
5.6.2. Russian Trends on Mobile Advertising market
5.6.3. Market Development Forecast, 2014-2017
6. Characteristics of Targeted Mobile Media Audience
6.1. Mobile Internet Users Volume in Russia, 2012-2014
6.2. Smartphones Users by Platforms, 2012-2014
6.3. Parameters of Use of Different Smartphones and Tablet PCs Functions
6.3.1. Active Users of Mobile Internet on Tablet PCs, Demography, Parameters, 1Q2014
6.3.2. Frequency of Use – Mobile Internet on Tablet PCs, 1Q2014
6.3.3. Frequency of Use – Search Apps on Tablet PCs, 1Q2014
6.3.4. Frequency of Use – Video Apps on Tablet PCs, 1Q2014
6.3.5. Frequency of Use – Social Network on Tablet PCs, 1Q2014
6.3.6. Experience of Tablet PCs Use, 1Q2014
6.3.7. Number of Installed Mobile Apps on Tablet PCs, Share of Paid Apps, Share of Actively Used Apps, 1Q2014
6.3.9. Frequency of Use – Mobile Internet, 1Q2014
6.3.10. Frequency of Use – Search, 1Q2014
6.3.11. Frequency of Use – Video, 1Q2014
6.3.12. Social Networks, 1Q2014
6.3.13. Apps, 1Q2014
6.3.14. The Most Popular Search Apps, Sites for Watching Video and Social Networks, Places to Use Smartphone and Tablet, 1Q2014
6.3.15. Habit to Use Smartphone and Tablet, 1Q2014
6.4. Conclusions about Targeted Mobile Advertising Audience
7. Adjacent Markets
7.1. Cellular Communication and Mobile Internet Market
7.1.1. Key Indicators, 2012-2014
7.1.2. Development Tendencies and Forecast, 2014-2017
7.2. Russian Mobile Phones and Smartphone Market
7.2.1. Key Indicators, 2013-2014
7.2.2. Development Tendencies and Forecast, 2014-2017
List of Figures
Figure 1. Digital advertising global market volume, bln.USD and share of mobile advertising, %, 2012-2018
Figure 2. Global Mobile Advertising Market Volume, bln.USD, 2012-2018
Figure 3. Russian Mobile Advertising, mln.USD, 2012 – 2017
Figure 4. Russian Mobile Advertising Market Structure, mln.USD, 2012 – 2017
Figure 5. Russian mobile Advertising market structure, 2014
Figure 6. Mobile Advertising market structure
Figure 7. Changes in the consumption model
Figure 8. Costs on RTB-advertising, bln.USD, world, 2010-2016
Figure 9. Digital advertising market volume in the world, bln.USD and share of mobile advertising, %, 2012-2018
Figure 10. Mobile advertising market volume in the world, bln.USD, 2012-2018
Figure 11. Kay market participants – mobile advertising in the world, %, 2012-2014
Figure 12. Mobile advertising market share of the total digital advertising market by regions in Russia, %, 2012-2018
Figure 13. Distribution of “clicks” by advertising distribution channels, by regions, 2013
Figure 14. Russian mobile advertising market volume, mln.USD, 2012 – 2014
Figure 15. Mobile advertising market structure, mln.USD, 2014 – 2017
Figure 16. Russian mobile advertising market structure in 2014
Figure 17. Mobile channels share on the mobile advertising market, mln.USD, Russia 2012-2017
Figure 18. Advertising distribution in messages by channels, Russia, mln.USD, 2012-2017
Figure 19. Advertising market volume in apps, mln.USD, Russia, 2012-2017
Figure 20. Shares distribution of advertising broadcast in apps by operational systems, 2014
Figure 21. Shares distribution of advertising broadcast in mobile internet by browsers, 2014
Figure 22. Russian mobile advertising market volume, mln.USD, 2014 – 2017
Figure 23. Russian mobile advertising market structure, mln.USD, 2014 – 2017
Figure 24 Active subscriber base of mobile data transfer, mln.SIM cards, 2012 – 2014
Figure 25 Total installed smartphones base in Russia by operational systems, mln.pcs., 2012 – 2014
Figure 26 General demographic characteristics of Tablet PCs user, Russia, 1Q2014
Figure 27 General demographic characteristics of Tablet PCs user, Russia, 1Q2014
Figure 28 Frequency of use – mobile internet via tablet PCs, Russia, 1Q2014
Figure 29 Frequency of use – search apps via tablet PCs, Russia, 1Q2014
Figure 30 Frequency of use – video apps via tablet PCs, Russia, 1Q2014
Figure 31 Frequency of use – social networks via tablet PCs, Russia, 1Q2014
Figure 32 Experience of tablet PCs use, Russia, 1Q2014
Figure 33 Number of installed apps on tablet PCs, Russia, 1Q2014
Figure 34 Number of installed paid apps on tablet PCs, Russia, 1Q2014
Figure 35 Is your smartphone/tablet PCs your first smartphone/tablet PCs?
Figure 36 Experience of smartphone/tablet PCs use, Russia, 1Q2014
Figure 37 Frequency of use – mobile Internet via smartphone/tablet PCs, Russia, 1Q2014
Figure 38 How many times did you go to the Internet yesterday via smartphone/tablet PCs?
Figure 39 Do you think you will be using mobile Internet for the next 12 months?
Figure 40 Frequency of use – search apps via smartphone and tablet PCs, Russia, 1Q2014
Figure 41 Frequency of use – video apps via smartphone and tablet PCs, Russia, 1Q2014
Figure 42 Frequency of use – social networks via smartphone and tablet PCs, Russia, 1Q2014
Figure 43 Number of installed and actively used (for the last 30 days) apps on smartphones and tablet PCs, Russia, 1Q2014
Figure 44 Number of installed paid apps on smartphones and tablet PCs, Russia, 1Q2014
Figure 45 Use of search apps via smartphones/tablet PCs, Russia, 1Q2014
Figure 46 Visits of sites for watching online video via smartphones/tablet PCs, Russia, 1Q2014
Figure 47 Visits of social networks via smartphones/tablet PCs, Russia, 1Q2014
Figure 48 Places for smartphones/tablet PCs use, Russia, 1Q2014
Figure 49 Places for smartphones/tablet PCs use for the last 7 days, Russia, 1Q2014
Figure 50. At what rate do you agree with each statement?
Figure 51 Number of active subscriber of cellular communication, mln.subscribers, 2012 – 2014
Figure 52 Total traffic of mobile data transfer, trln.Mbyte, 2012 – 2014
Figure 53. Mobile terminals market volume, 2012 – 3Q2014 (quarterly dynamics), mln.pcs.
Figure 54. Mobile terminals market volume, 2012 – 3Q2014 (quarterly dynamics), bln.USD
Figure 55. Share of smartphones in the total sales of mobile terminals, pcs. 2012 – 3Q2014 (quarterly dynamics)
Figure 56. Dynamics of average mobile phone cost, Russia, 2012 – 3Q2014
Figure 57. Smarphones Market Volume, 2012 – 3Q2014 (quarterly dynamics), mln.pcs.
Figure 58. Smarphones Market Volume, 2012 – 3Q2014 (quarterly dynamics), bln.USD
Figure 59. Average Smartphones Cost Dynamics, $, Russia, 2012 – 3Q2014
Figure 60. Smartphones market structure by operational systems, % of sales, 2012 – 3Q2014 (quarterly dynamics) Figure 61. Russian Mobile Terminals Market Forecast, mln.pcs., 2013-2017
Figure 62. Russian smartphones market forecast, mln.pcs., 2013-2017
This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.