Insights

Mobile-Social-Video Convergence

Mobile, Social, and Video are converging in interesting and potentially profound ways. Understanding recent growth trends and the overlap in each area provides insight on how brands and retailers can prepare for and take advantage of this convergence.

Let’s start with some Mobile stats:

  • Smartphone shipments slowing, 3% yoy vs. 10% last year. But, the global installed base is 2.8B devices, so despite slowing growth it’s still a huge and faster growing market than any other device. (KPCB Internet Trends)

  • Mobile now accounts for over 50% of daily digital engagement (3.1 hours out of 5.6 total) (KPCB Internet Trends)

    • Mobile engagement time was <1 hour per day only 5 years ago in US.
    • Time spent on Mobile devices has increased over 2x in just last 2 years.

  • Mobile advertising spend finally eclipsed desktop for first time in 2016 (KPCB Internet Trends). We all knew this would happen eventually, but implications are still great.

    • Mobile is underrepresented in ad spend relative to time spent (especially vs. TV) = $16B opportunity (KPCB Internet Trends). Programmatic and advanced AI behavioral targeting will likely close this gap within a couple years.
  • Total internet ad spend expected to pass TV in 2017, mobile growth is fastest channel (KPCB Internet Trends). TV is still the elephant in the room at many brands and agencies – the biggest, loudest channel, and often a given in annual media budget allocations. Keep an eye on the growing forest, not just the tallest trees. “TV” isn’t going down without a fight – as noted in the Video section below.
  • Smartphone + tablet = 51.3% of internet use. New form factors will likely continue to expand the definition of “Mobile”. (Oct 2016, StatCounter Global Stats)
  • Mobile growth isn’t all B2C. 42% of business buyers research on a mobile device during the purchasing process. Of those, use of mobile throughout the entire purchase funnel has grown 91% over the past two years. B2B behavior lags but mimics B2C advances – we’ve seen this many times over the last 20 years. (ThinkWithGoogle)

Now consider the growth of Video consumption:

  • Mobile TV / Video viewing increased 85% annually from 2010-16. (EDT)

    • 5G infrastructure investment by telcos will push growth even further.
  • In US, video will account for 77% of total mobile data traffic by 2020, up from 61% in 2015. (Tubular Insights)
  • 35% of smartphone US users watch videos daily, 27% weekly. That’s over 60% of users that are choosing Mobile video as a standard info / entertainment source.  (Google Consumer Barometer)
  • 30% of smartphone users are watching full length programs on mobile. (2016 State of the Broadcast Industry Report)
  • Seventy percent of B2B buyers and researchers are watching videos throughout their path to purchase. That’s a 52% jump in only two years. (ThinkWithGoogle)

  • OTT services are expanding rapidly

    • Over-the-top (OTT) content is the delivery of audio, video, images, and other media over the internet and bypasses traditional content distribution services. (PR Newswire) The biggest examples are Hulu and Netflix, but hundreds of smaller OTT channels are coming online every year.
    • The global OTT content market is estimated to be valued at US$ 53.2B by the end of 2016, with a CAGR of 14.5% from 2016–2026. (PR Newswire)
    • Four trends are driving OTT Video: the consolidation of small niche services into larger bundles; the near certainty that these bundles will start replacing cable TV subscriptions; the already substantial spend TV advertising already commands; and the wealth of meaningful data OTT devices can provide. (DM News)
  • YouTube overall, and even YouTube on mobile alone, reaches more 18-49 year-olds than any cable network in the US. (YouTube)

And finally Social, which has morphed into a more powerful channel than anyone not named Zuckerberg could have predicted even 10 years ago:

  • 54% of smartphone users in the US access Social networks weekly (Google Consumer Barometer)
  • Active Social media users in US up 11% to 214M in 2016, ⅔ of population. Active Mobile Social users up 12% to 190M, 58% of population. (WeAreSocial). Just a massive audience reach.
  • Google & Facebook are eating digital audiences with concurrent major growth in ad spend. (KPCB Internet Trends)
  • FB / Instagram / Snap are growing mobile video market share (at expense of others players). (KPCB Internet Trends)
  • Traditional TV players partnering with Social giants to reach audiences (eg. NBC + Snap). (KPCB Internet Trends)
  • Format lengths evolving beyond 30 minutes – turning to short form snackables / sharables that can be easily consumed and shared on Social networks.
  • In less than three years, Musical.ly has become the world’s fastest growing entertainment social network (>200M users) for creating, sharing and discovering short videos. (Tubular Insights)
  • U.S. time spent consuming media in apps grew 38.5% in 2016 to 133 minutes/day (well over two hours every day). The expanded media consumption on Social apps was the critical growth driver. (Flurry Analytics)

Implications

This convergence of Mobile-Social-Video is driving many brands to reconsider their formerly silo-ed approaches to each.

  • Just having a branded Mobile app + occasionally posting content to Social channels + overweighting traditional TV media spend is not a recipe for success. Audiences and consumers are wanting / rewarding brands that take a more holistic and integrated approach.

  • For Retailers, episodic, calendar driven campaigns must evolve to always on 24/7 data-driven personalization.

    • Targeting and measuring ad effectiveness is improving, with a stronger attribution connection to purchase and ROI.
    • Opportunities exist to drive foot traffic with geo / local Mobile campaigns, offer contextual purchases in Social, convert “ads” to digital storefronts or even point of sale, and provide contextual experiences in Mobile (on the go, in-store, etc).
  • As Neil Blumenthal, Co-CEO Warby Parker, has said: “I don’t think retail is dead. Mediocre retail experiences are dead”. (KPCB Internet Trends)

  • Brands and Retailers should also join the Video content wave.

    • 360 video views growing and offer a gateway to future consumer VR experiences
    • Sponsoring live streaming of events, especially on Social channels, can grab the attention of dedicated audiences.
    • Experiment in OTT, whether by creating new user experiences (not ads) on the big platforms like Hulu/Netflix or building unique OTT channels as Redbull and HSN have done.

Next Step

Our teams of creative technologists at Zemoga have been driving Mobile, Social, and Video innovation for clients for over 15 years. We’ve helped firms large and small improve reach, deliver amazing digital experiences, and ultimately delight and convert audiences. If you’d like to learn more about our proven approach, please reach out.

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