Explosive Growth in Mobility and Location-based Marketing

It’s exciting to watch the explosive growth of mobile and hyper local based services. Mobile location based services and marketing is rapidly becoming BIG business, with an estimated $4.5B of mobile advertising being location based (rising to over $10B by 2017).

Let’s look at some of the fundamental factors, drivers and numbers behind this growth to put it into context.

Growth is Scary

Global mobile data traffic grew 81 percent in 2013 (Cisco, VNI 2014), with  the numbers of smart phones outpacing all others and predicted to continue to increase through 2018.

 

 

 

 

Regionally the US is expected to have a massive 93% of smart connected phones and devices by 2018 (followed closely by Europe on 83%). In fact, almost half a billion smartphone devices and connections were added in 2013 alone.

 

Context is Key (or King!)

The importance of context in mobile advertising cannot be understated. It enables consumers engaged in richer, more personalized and faster ways than before. The growth and success for early innovative organizations will be in capitalizing on customer interactions in real-time, with a highly context-based approach. What are your mobile customers’ key characteristics? Preferences, locations, and usage trends  will blend together to deliver services and promotions that are highly appealing and valuable to your customer in that moment. Being able to engage in a smart manner using real context provides is now a key differentiator when it comes to making an impression on customers.

Mobile Location Data

If context is king, then data is definitely the queen!

It’s important to note that the biggest single benefit of location bases services is gathering data and analytics from users. Given the numbers of mobile devices and users milling about, the volumes of this data can grow very quickly, which means more patterns and trends to tease out. Location data can be used by organizations to make informed adjustments to the business that can improve the user experience and customer service. Furthermore as data volumes grow it can be uses for a variety of purposes such as:

• predicting future trend based upon historical facts
• making better operational decisions
• developing new products and services based upon location and demographic data

Mobile Advertising Growth Trends

The growth in devices, the growth in data and the engagement capabilities is resulting in explosive growth in the mobile advertising marketplace.

The hype is real and some interesting statistics, predictions and data points are now available to support this:

Mobile Advertising Predictions

• $10.15B will be spent on US mobile advertising in 2014, with $4.35B (or over 40%) spent on location-based US mobile advertising.
• US mobile advertising spending will increase by 75% in 2014
• 52% of mobile ad spending, or $10.8B, will be associated with location-targeted campaigns by 2017
• $6.6B will be spent on location-based US mobile advertising in 2015, compared to $7.34B for non-location-based

Consumer Acceptance on Mobile Advertising

• 47% of mobile consumers want retailers to send coupons to their devices when they are in or near the store
• 53.2M US consumers will use mobile coupons by 2014
• 49% of US smartphone owners have used mobile coupons on their devices, compared to 10% for tablet owners

Clearly this is booming and despite what we may think intuitively consumers are fairly receptive to mobile advertising – especially when it is contextual.

Follow our upcoming series of how this is starting to play, what businesses and consumers are doing and where the value is emerging across various industries from Retail to Hospitality to Campus’s to Cities over the coming weeks and how Cisco’s location-based Connected Mobile Experiences (CMX) solution is a key enabling technology within this revolution.

For more information on CMX visit: www.cisco.com/go/cmx.

Sources: BIA/Kelsey, 2014; Flurry, 2014; Loyalty360; Business Insider