International Digital Marketing

Back in 2010 I looked at the mobile market dynamics and OS market share statistics in the US and Europe, as all marketers talked about was Apple, iPhone apps and Apple’s products. In reality, was it all about Apple? Not really.

In those days Android had started eating slowly, but steadily iOS market share, and Symbian OS was still dominating Europe.  2010 seems like a long time ago – things have really changed.

Last year was full of lawsuits, clever advertising, product launches, failed mapping headlines, and a whole lot of drama between Google, Samsung and Apple. But … is it really all about Samsung and Apple?

Samsung vs. Apple – a clever PR stunt?

In 2012 Samsung established a very strong position as an Android developer fighting against Apple and received strong support from the Android community … and from a part of the media as well. But is this battle really that strong or did these two companies take advantage of the tension between Apple and Android fans to fuel the fire and get their names out there? Looking back at the big amount of Samsung vs. Apple law suits and the cocky “apology” to Samsung by Apple, it is possible. And if they did, it worked: for a month or two all media and people talked about was Samsung / Google vs. Apple. You had to make a stand – either you were Android fan or an Apple fanboy. It was all or nothing. All nicely timed with iPhone 5 launch as well as Galaxy launches.

Samsung became almost a symbol of fight against overly-confident Apple, but there are much more great Android developers out there including ASUS (creator of the highly successful Google Nexus 7 and Nexus 4), HTC, Sony, etc. But did anyone talked about them in Google vs. Apple battle? Not really.

So what is really happening behind the scenes?

Constantly changing mobile market dynamics

1.5 billion handsets were shipped in 2012, a 2% increase compared to 2011. 700 million of the handsets were Smartphones, yet even if the global smartphone shipments increased by 490,5 million units (43%), the saturation in Western Europe and North America impacted the slower growth.

Samsung, Apple and Nokia were named the top three vendors with Samsung shipping 30% of the handsets in 2012. Company’s Smartphone sales were mainly fueled by its record sales of the popular Galaxy models (396.5 million) yet the total handsets it sold were 400 million. Apple shipped 135.8 million iPhone units (19%) strengthening its position in North America, but the company failed to reach developing markets such as Africa as well as certain European countries. Meanwhile Nokia’s market share dropped in 2012, but the launch of Asha and Lumia 920 / 800 had a positive impact in Q4 2012 with 86.3 million units sold, in which smartphone accounted for 15.9 million units composed of 9.3 million Ashas, 4.4 million Lumias and 2.2 million Symbian smartphones. Chinese handset manufacturer ZTE settled for fourth place.

Mobile OS market share in 2012

According to Kantar Worldpanel ComTech, Android has shown strong growth in Europe and Australia in 2012 and is holding now 61.1% of the EU5 and 55,8% of Australian market share. The growth has been significant in Britain, France and Spain in the EU5, but increase has been slow in Italy and its market share has decreased – surprisingly – in the USA. What comes to other markets, in Brazil Android increased its market share to 47.1% and in Mexico to  37.3%.

What comes to iOS, despite iPhone 5 and iPad mini launch, iOS market share in the EU5 has increased only 0.2%. The biggest growth in EU5 happened in Italy and France, yet the iOS market share decreased 1.7% in the UK and Spain. The US market share increased 6.3%, while Australian market share shrunk 3,4%.

In Europe Windows Phone’s market share has more than doubled to 5.4%. The strongest market in EU5 for Windows phone is Italy with 13.9% of the market share (11.1% increase from 2011) and Britain with 5.9% market share (up from 2.2% in 2011). However, the growth has been slower in other EU5 countries, Asia and the US. In Brazil the market share has jumped up to 12.2% and to 2.7% in Mexico.

Symbian OS, Bada and Blackberry’s RIM have suffered the market changes most in developed countries.

Mobile market in 2013

Apple seems to be struggling with a falling market share – and shares. The launch of the iPhone 5 in 2012 was a disappointment for many, and especially Apple’s infamous maps have created headlines. iPad mini launch was also the first time when Apple moved from innovator to a follower by comparing openly iPad mini with Google Nexus 7 in the official press conference. Is launching a new model so rarely Apple’s strategy to make the products more special? Or is there perhaps nothing new to publish?

Anyhow, Apple has still a very strong ecosystem and it has done a brilliant job on introducing Apple products in all aspects of user’s life from home stereos and in-car assets to music and apps. Once you have bought Apple related things during years it is very difficult to switch to another Smartphone / tablet. That being said, Apple has made “switching” to other OS a bit easier with the introduction of the new cable, which means the things you bought for your previous iPhone are not compatible with iPhone 5 or any other new model Apple launches.

There has also  been a lot of speculation whether Nokia made the right choice of choosing Windows phone OS instead of Android. Maybe it did. If Nokia would have picked Android as an OS, what would differentiate it from other Android developers in Samsung’s shadow? It will be fascinating to see whether Windows phone platform keeps growing strongly. Other interesting game changers to watch in 2013 are Blackberry 10, and Linux / Ubuntu based devices.

Android is going strong, but we might see a change from a role as a market challenger to a leadership defending OS. And the OS with the biggest market share tend to get challenged by the smaller OS – just what happened to Symbian and Apple. As mobile market is changing so rapidly, it could be possible that in two years time Apple has become a dinosaur, Android / Google the bad guy and Windows phone the new trendy platform … and the fighter of justice.

During the London press conference last Wednesday, the Internet Corporation for Assigned Names and Numbers (ICANN) announced the first 1,930 applications received for the new brand, or generic, domain endings replacing .com. The list includes brands such as L’Oréal, Chanel, Nike, Gucci, Macy’s, Swatch, Target, Zara, Next and Wal-Mart.

Almost 50% of the proposals (911) were from North America, more than 30% of the proposals were from Europe (675) and 16% came from Asia Pacific region (303). Only 1% of the proposals came from Africa (17) and 1,3% came from Latin America and the Caribbean (24).

What is a brand domain?

Brand, or generic, domain means website urls ending .brand, .thing or .idea instead of .com. The idea is to allow businesses that joined Internet later to find alternatives to “dot com”, but in practice these domains would most likely sit alongside established domains such as .com and .org. The possibilities vary from hobbies, demographics, and professions to corporate brand names. Few examples are .lol, .bank, .baby, .music, .doctor, .loreal, .youtube, .google, .coke, .apple and .twitter.

ICANN announced that the companies that have applied for the brand domain names are now going through an independent review process with a 60-day comment period and a 7-month objection period. The organization will review each proposal, make a criminal background check for each applicant, and assure that company’s financial plan is stable and contingencies exist in case a company goes out of business. If there is a conflict between names, ICANN encourages competing bidders to reach an agreement together, but the organization will hold an auction if the parties fail to reach a compromise.

Expensive – but a trend to watch closely.

These domains do not come cheap.  There is a $185,000 fee per application, and so far ICANN has collected about $350 million from the bidders. ICANN states that the main reason for the high cost is the technical complexity as it is not simple to run these top-level domains. The first domains are estimated to go live in the first quarter of 2013.

It is expensive, but most of the brands are registering the domains for defensive reasons to avoid competitors and other public to acquire their brand domains. The application cost now might be $185,000, but if a competitor or counterfeiter registers the domain first, the acquisition cost in the future may become extremely expensive.

End of dot com or a passing trend?

Besides of applying for brand names, some companies such as L’Oréal are also registering generic domains such as .skin, .hair and .makeup. This is expensive, but it may be a very smart move against the competitors if the trend takes off and the brand will receive more traffic and consumer interest. It will be interesting to see what Google’s point of view is regarding the subject, and how this will affect the SEO as the keywords in domain name have a positive impact on ranking. Maybe Google itself will start giving or selling .google domains for businesses and users to increase its prominence in the cyber space?

At the same time, people are used to .com and country specific domains such as .co.uk, .es and .it. When the system is launched, how do you explain people that “doctor” is a website without www or .com? It is also to be seen how the system and new domain endings work in practice. For example, if the user types “doctor” in the browser bar, he is expecting location based search results. Instead, he might end up in the page of whoever owns the domain .doctor, which will most likely only annoy him. This is why the url structure change may result confusing for general public and the adoption rate may be low. If the consumer interest and adoption rate are low, after the first excitement brands may start simply redirecting these brand domains to their  .com site.

It is an expensive game to play and at the moment only the big players can invest in these domains. However, if the technical cost goes down after the first wave of brand domains, it might be the end of the “dot com”. Or then we only end up with a big bunch of 301 redirects.

Facebook has a lot to prove. The much hyped Facebook IPO turned to be a fiasco, as the company and bankers evaluated the social network to be worth $100 billion while investors did not. Despite the little peak ($45 share) during the launch on May 18^th 2012,  the Facebook share price has dropped from the opening price of $38 to about $28 this morning.

So, what went wrong?

Too high and optimistic expectations

First of all, let’s look at the numbers. There is an impressive quantity of users in Facebook and the social network has been predicted to reach billion users this year. But does it justify that Facebook was being valued at almost 100 times last year’s profits? This is much higher than tech companies Apple and Google, who in fact make much more money.

In addition to above, in February 2012 Facebook admitted that it did “not currently directly generate any meaningful revenue” from mobile even if more than 425 million monthly active users, representing 50% of the total MAUs, were utilizing its mobile products in December 2011. This has serious implications, which probably were not bypassed by the investors.

What comes to the launch itself, there were too many shares in the market. Also it did not help either that Facebook insiders, such as Facebook board member Peter Thiel, increased the amount of shares they wanted to sell. This raised suspicions – what did they know, that normal public did not?

Is it time to make Facebook users pay?

Facebook has launched a test in New Zealand to see whether it would be possible to make profit also with the users. According to CNET, the social media platform has recently tested out a new service that permits users to make their status updates more prominent in exchange for some money. The new service works like the premium ads to businesses. By paying $1.80 New Zealand dollars ($1.42 U.S. dollars), Facebook users can promote their status update and assure it remains in their friend’s news feed.

If this business model would result successful, Facebook could possibly make a nice profit and gain investors’ trust back. As the user’s friend base, likes, groups, and applications grow, user’s status updates are likely to get lost in the middle of it all. Facebook users also love friends’ “likes” and comments, especially if we are talking about top influencers, and sometimes they have something important to say that is worth highlighting, such as a lost mobile or an item on sale.

On the other hand, the hidden/not seen status updates are mainly caused by Facebook’s own features, issues and sorting algorithm, that sets up the top stories as default and makes everything very cluttered. It highlights stories such as the games people play, music they listen to, apps they use and articles they read – and do not forget to add the brand communications and ads on top. The social media platform has already been pushing its luck, and it is to be seen if this will provoke users to leave the site.

To be honest, I am interested to see how this works out and what users’ reaction will be. How important showing status update is for users? How much are they ready to pay to be “liked”? And if they are ready to pay to be “liked”, are they ready to pay to access the platform in the future? Maybe this is just the first step towards a Facebook membership fee.

“It sees us”,

Samsung representative, Galaxy S III London Launch

Samsung’s new Galaxy S III is smart … very smart. The mobile manufacturer unveiled last week in London the highly expected addition to its Galaxy S family, after creating a lot of hype around its launch. Even if the launch event itself was not as impressive as Nokia’s Lumia’s, the new Smartphone makes iPhone look a bit “old school”. Maybe the iPhone5 launch is so delayed, because Apple needs to reinvent phone’s features after each Android launch to seem innovative? Who knows…

Very Smart Mobile Technology

Besides its big screen size and 720p resolution, Samsung Galaxy III is differentiating itself from the competition with eye tracking capabilities. The technology called Smart Stay allows the front facing camera to monitor your eyes and know when you are looking at it. This allows the mobile not to “sleep” from inactivity if you are watching a film or reading an e-book, for example.

Other interesting smart feature called Direct Call is well adapted for real life. For example, if you are sending a SMS to someone, but decide it is actually simpler to give him a call, you can move the phone next to your ear to make a phone call to that number. With the Beam sharing function, that combines NFC technology with Wi-Fi Direct, you are able to share movies and music with other phones by simply tapping them. You can also throw content to TVs, as well as make the TVs mirror what is on your Smartphone screen.

The mobile device uses ‘S Voice,’ an advanced natural language user interface, to listen and responds to your words. You are able to use it to command the phone with only your voice to snooze, play songs, turn the volume up or down, send text messages and emails, organise your schedules, or take a photo. It is to be seen whether it understands the Scottish accent better than iPhone’s Siri.

Samsung Galaxy S III Launching First in Europe

Samsung announced that it will launch the 3G version of the Galaxy S III end of this month, and 4G version is arriving later this summer. Surprisingly the manufacturer has decided to launch first in Europe on 29^th May, before launching in the North America in June. There has also been rumours that the phone would be launched before the USA also in Asia, Africa, and Latin America. Interesting choice. One of the reasons might be the objective to strengthen Samsung presence in the other continents as it has a strong presence already in the USA.

According to IDC, the global sales for mobile devices (feature and Smartphones) increased 11.1% in 2011 compared with 2010 with Nokia leading with 27%, Samsung with 21.3%, Apple with 6%, and LG with 5.7% of the global mobile market share. The top device manufacturer by market penetration rather than sales is Nokia in Western Europe, Samsung in the US and Sharp in Japan.

What comes to only smartphones, according to IDC, also smartphone sales showed strong growth worldwide in 2011 the global sales growing 31.8% in 2011 compared with 2010, and Smartphones represented 31.8% of all handsets shipped. Samsung leads the way with 19.1% market share, Apple follows closely with 19%, Nokia is third with 15.7%, RIM with 10.9%, and HTC is fourth with 8.9%

Samsung Galaxy S III to conquer Europe?

It is an interesting phone with interesting features, but it does not seem world changing. It seems more like a refreshed version of their already successful model. However, as the company is planning pop-up stores across Europe to give customers the possibility to play with the Galaxy S III, I am hoping to see a stream of American tech tourists arriving to Europe to get it – just like we used to travel to the USA to get an iPhone.

And yes, I will be happy to go and play with the Galaxy S III as well.

We have been aware of it for almost a one year, but unfortunately the lawyers in EU headquarters are not changing their minds as we secretly hoped. The new EU data cookies law will be effective from 26^th of May 2012 in the UK, but very rare companies have done something about it. Now we only have two months left.

What is a Data Cookie?

Cookie is a small file that is downloaded onto your device when you access a website, and it sends your information back to the site once you access it again. Cookies are used in most of the websites – for example, eCommerce site stores delivery details to fasten the checkout, Google analytics (one of the most common cookies) uses cookies to provide statistics for the website owners, and Google also uses them in Google search to provide more personalized search results and adverts.

The reason why cookies are so important for companies is the statistics and results they provide. These allow website owners to analyze the data and take actions to optimize the website performance. Marketers also need the results to justify the digital investment for the top management and investors.

What is the New EU Data Cookies Law?

The European Union Cookie law – or the Privacy and Electronic Communications (EC Directive) Regulations 2003 – was created to assure that website users have a choice whether the website can collect their information or not.

It means that cookies or similar devices must not be used unless the website subscriber or user:

(a) is provided with clear and comprehensive information about the purposes of the storage of, or access to, that information; and

(b) has given his or her consent.

However, device finger printing as a way of user identification is allowed.

What does the EU data cookies law signify for companies?

From May 26^th 2012 companies must inform users about the cookies on their website, what the cookie is doing and ask actively users permission to use that cookie. Besides websites, devices like mobile phones, internet-connected TVs and gaming consoles require the same level of compliance.

How this is done in real life without spoiling the user experience? Well, that is a good question.

If the user does not give permission to use cookies, companies will have no track record of their visit, which means that visitor numbers are going to drop record low. It will also be extremely difficult to track website and campaign performance. Not only there is a great quantity of own and third party tagging, but do not forget the quantity of embedded YouTube videos, widgets, social log-ins, plug-ins etc. which also want to use cookies. Who will explain the Facebook cookies – the website owner or Facebook?

How to ask users permission to use cookies?

There are not many examples how companies are asking users permission to use cookies in real life. This is most probably because companies do not want to add an annoying message to their website until they absolutely have to. And of course companies prefer seeing what competitors are doing first and then possibly copying the message to their website. Of course the Information Commissioner’s Office (ICO) website had to provide an example. Not a great one to be honest, since if user ignores the message and does not click “accept” you cannot track them. It meant that ICO’s analytics data regarding the unique visitors dropped 90%.

There are however few options, such as:

• Modal dialogue box, which explains in detail what cookies are on the site and what they do. It is shown as a layer and does not allow user to interact with the site until they opt-in or opt-out
• Status bar, which appears in the top or bottom of the page. It informs users that cookies are used on the site and user needs to opt-in or opt-out to close it.
• Warning bar, which appears every time the website wants to use a cookie asking user to either accept or decline it.

How this is implemented in mobile, TV or tablets? I do not know. Maybe one option is to start by having a link advicing users of the new privacy policy, which then leads to a page explaining in more detail what the cookies are, why they are used, how they improve the site functionality, and explaining how the user can disable them in their browser (if they really want to).

Whatever you do, it is not worth waiting for 26^th May 2012 to see what competitors are doing or you might risk a 500,000£ fine. It is better to start thinking and experimenting with AB testing now before it is too late. Of course usually the government does not act until someone complains – but do you really think that some of your competitors would not be happy to tip you off?

Ever dreamed of an app that works in all devices and operating systems? Creating a mobile app requires investment and resources, but with increasing number of players in the mobile space, app development has become even more complicated and expensive. Instead of one iPhone app, you need to decide whether you will also develop the same app for other operating systems, such as fragmented Android and emerging Windows OS.

But there is hope. HTML5.

New technology with increasing potential

According to Michael Mullany, VP of marketing and products at Sencha, already 95% of the functionality of native apps is being delivered by HTML5, and the new technology will emerge competitive on just about every level within two years. Meanwhile, research firm Strategy Analytics forecasts 1 billion HTML5 compatible phones to be shipped in 2013 (up from 336 million in 2011), which has provoked interest among big players such as Facebook and Google.

In addition, Financial Times surprised the market last year by withdrawing FT iPhone app completely from App store, and creating its own HTML5 app instead. Within only few months FT managed to migrate 1 million of its mobile users from its native mobile app to the browser-based version. Currently 20% of total page views and 15% of new B2C subscriptions are coming directly from mobile and tablet devices. Quite impressive.

What is an HTML5 app?

HTML5, also called “the flash killer”, means a fifth generation of coding language that is used to create web pages. It gets to bypass phone’s hidden components that in the past have forced developers to create a specific app for each OS. This means that instead of creating various versions of the apps for different OS and devices (iPhone OS, Android, Windows…), by using HTML5 companies are able to develop one mobile / tablet app that is suitable for any device or operating system.

HTML5 app benefits and challenges

Main benefits: cost savings and accessibility. Besides huge savings on mobile / tablet app development costs, you are not restricted by terms and conditions and do not require anyone’s permission to distribute an HTML5 app. It means that there is no 30% cut of app revenue, which happens with apps sold via native platforms. HTML5 apps are also searchable by search engines such as Google, which expands their reach beyond native app stores such as Apple’s App store and Google’s Android market.

Main web and mobile browsers support HTML5 and most of its features are able to run on low-powered devices such as smartphones and tablets. However, even if HTML5 has been improving fast there are still some limitations such as speed, access to certain phone features such as Bluetooth, and inability to handle the intensity of graphics performance for maps and fast-moving games as well as native app. What also is required for HTML5 to really kick off is an effective distribution channel for the HTML5 apps, user feedback system, and simple and secure payment channel. In general, quality of the apps may also not be up to same standard if there is no central quality control.

Should our business invest in native or HTML5 apps?

If the aim is to develop a graphic fast-moving game or location-based app using maps – maybe not. If the aim is to develop an engaging mobile app that does not require necessarily fast internet connection, HTML5 apps can make life less complicated. Instead of a long process of creating, testing and approving many versions of the native app for different operation systems, company can concentrate on one mobile app that is suitable for most of the devices. This allows us to invest more time and resources in something more important, such as building a proper mobile strategy, instead of running around like headless chickens focusing on small details instead of the big picture.

To be honest. If we have a possibility to produce something that most of the people can access while making considerable time and cost savings – shouldn’t we?

It took a while, but Facebook has finally – at least officially – identified mobile as “critical to maintaining user growth and engagement over the long term.” The global social media platform acknowledged that users are moving from PCs towards mobile Facebook access, and admitted that “if we are unable to successfully implement monetisation strategies for our mobile users, our revenue and financial results may be negatively affected.”

 Growing International mobile advertising market

 According to experts, global mobile advertising market is experiencing an annual growth rate of 64% and is expected to reach 17.6 billion US dollars by 2015. This might be the main reason, instead of the user engagement, why the social networking company is so interested in mobile market. In fact, Facebook’s biggest revenue channel is advertising, generating 85% of sales in 2011. To put it in perspective, Facebook’s revenue accounted for 3.71 billion US dollars in 2011.

Surprisingly, Facebook is not currently generating profit directly through the Facebook mobile products and it has not been advertising via mobile. The social media company revealed that this is going to change and that they “may have potential future monetisation opportunities such as the inclusion of sponsored stories in users’ mobile News Feeds.” I am not sure how the Facebook users are going to react, but users’ reaction seems to be one of platform’s smallest concerns, especially taking in account the recent changes, privacy issues and the polemic regarding the timeline.

 Global Facebook mobile usage

 But how many users are currently accessing Facebook via mobile? According to Facebook, more than 425 million monthly active users (MAU) were utilizing its mobile products in December 2011. This has great significance since in total the platform has 845 million monthly active users and it seems unbelievable that the social networking company has not realized until now the potential mobile marketing has.

Company is forecasting the mobile user rate to grow even faster than the MAU, which has been increasing annually 39%. This may very well be possible. According to a recent ComScore study, 55.1 million European mobile users accessed social networks or blogs via mobile devices in September 2011 only, representing 23.5% of the total mobile audience. Not only did the mobile social media usage nearly double, but 47% of the users accessed social networks and blogs daily.

Challenging global mobile market

 Facebook might have a strong position in International online market, yet the global mobile market is full of competitors and challenges. The social networking company admitted that it is dependent on different mobile operating systems they do not control, such as iPhone OS, Windows OS and of course … Google’s Android.

 Until recently we were experiencing Apple smartphone domination, yet things are changing. Industry analysts are predicting that Windows Phone will increase its market share up to 16.7% by 2015, while Apple’s market share will decrease from 18% percent to 16.6% by 2015. Meanwhile Android is expected to grow from 47.4% to 58.1% by 2015.

 There are several reasons for the change. One is Nokia’s powerful partnership with Microsoft, which has resulted for example in a successful Lumia mobile. Other is Android’s massive volume of devices. Even if the Android OS is fragmented and constantly changing, Apple takes its time to launch a new expensive new iPhone / iPad, while hundreds of Android powered mobiles arrive in stores across the globe in a year … and with a cheap price.

Facebook / Apple mobile partnership?

Facebook has a problem. It is planning to step into the mobile game, however its 425 million MAUs have already an existing Facebook app, there are many competitors in location-based services, social networks, games and deals, and the social networking company does not have any control over mobile OS. Apple on the other hand is losing its market share rapidly while Android OS is growing fast.

One interesting possibility the two companies have is augmented reality. According to Juniper, by 2015 global revenues from AR will reach 1.5 billion dollars. ABI Research estimated that even if in 2010 revenue from Augmented reality was only 21 million dollars, amount might very well increase to 3 billion dollars by 2016. But it gets better: AIB claims that revenues related to Augmented reality will increase from 6 million dollars in 2009 to more than 3.5 billion dollars in 2014 – which signifies a yearly growth of 97%.

What this has to do with Apple and Facebook? Apple has acquired recently Polar Rose, a company which has created facial recognition software and other elements that enable the “automatic creation of events based on visual cues in images.” This brings enormous possibilities in social networking area, which should interest Facebook. Apple has the iPhone OS and technology, and Facebook its Facebook Places and large user base perfect for the newly acquired facial recognition. If these two companies join forces they can very well have a chance to compete with Google. Actually these two combined could possibly even be very, very dangerous for Google.

Facebook and Google do not like each other. Apple and Google do not like each other. What would be a better partnership than ganging against a common enemy?

Back in the days it all seemed very easy. By identifying where people were in the purchase funnel (awareness, familiarity, consideration, purchase and loyalty), marketers were able to identify cool, warm and hot prospects and lead them down the funnel to the sale. Clear step by step customer acquisition journey that made sense. A basic marketing rule that has been respected for decades.

But let’s face it: the world we knew back then has changed. With the exponential growth in technology, mobiles, Internet, social media and search, even the way we look at the world has changed. We marketers have changed, consumers have changed and the ways brands engage with the consumers have changed.

So why the way consumers buy our products would not have changed?

Different consumer decision journey

 According to consulting firm McKinsey, traditional funnel is dead and has been replaced with a different model called Consumer Decision Journey.

“It’s taking a fundamentally different view of what’s going on in consumer behavior”, claims David Edelman, partner and co-leader of McKinsey’s global digital marketing strategy, “What we have seen in sector after sector is that this [funnel] is not what’s going on; we need to reframe the consumer decision journey to something more iterative, circular and more about what the consumer is actually doing. And marketing needs to be about helping customers through that journey.”

Source: McKinsey & Co

Social media, consumer forums and brand advocates play a very important role in this purchase process model. Consumer tries or buys a product, tells the world about it, and triggers other consumers interests who will then evaluate different options on and offline and compare brands before buying the product.

What is interesting in this model is that since consumers are constantly evaluating different possibilities, they are in a continuous journey where they regularly add and drop brands. It is a loop, which means that the communication should not only focus on awareness and end sale, but also in consumer engagement and consumer loyalty. More happy customers the brand has, more advocates, positive comments and evaluations it has. Which then lead to more potential customers.

How to engage with the customers during their journey?

McKinsey has identified four ways companies could use to engage consumers during their journey:

1. Align – instead of using all resources for “consider” and “buy” stages, companies need also to focus on “advocate” and “evaluate” stages. This means that marketers need to stop ignoring consumer forums and encourage clients to rate their product/service or write their opinion about it. Amazon is a great example of the power consumer opinions and data brings.
2. Link – Communication and brand message across all channels from offline to online needs to be consistent. If the core message and brand identity differs, consumers get confused. And confused customers are not happy customers.
3. Lock – Companies should “lock in” a customer’s attention via direct, opt-in channels, such as Twitter, Facebook, email and apps. It does not mean sales talk, people who follow you are usually your fans and deserve interesting and relevant content. Other consumers following you are all potential customers who also deserve engaging content that does not only push sales, but asks their opinion and makes them feel special at every stage of their journey.
4. Loop – As mentioned, the journey is a loop. To improve the loop it is very important to measure data and evaluate the response to the content. If you do not know the results, how can you improve your marketing strategy and communication?

Is traditional purchase funnel dead?

Dead is a strong word. I think the consumer purchase journey has only transformed and become more advanced and adapted to the modern times. The basics steps are similar, but the model highlights the importance brand advocacy has especially on these disloyal times. We are surrounded by excessive choice, have become suspicious and picky, and search for other consumers advice before choosing the right product for us.

Word of mouth and post-purchase customer service have always been important, but often forgotten from the marketing mix. Yet the truth is that ever since consumer was able to speak with the world via Internet and reach not only his family but hundreds of thousands of people, his power has skyrocketed. It would be foolish to ignore it.

Whether you call it customer decision journey or purchase “loop”, this model should be an eye opener for those who stick to the old world and the old models. The world has changed. Welcome to 2012.

The QR codes have been highly popular among users as well as marketers in Japan for past few years, where almost all mobile devices are sold with a QR code reader software. Now QR code usage is growing exponentially worldwide: according to ComScore in June 2011, 14 million mobile users in the U.S., representing 6.2% of the total mobile audience, scanned a QR code on their mobile device. What comes to Europe, in EU5 region (France, Germany, Italy, Spain and UK) 4.6% of mobile users and 9.8% of the smartphone owners scanned a QR code during the same time period.

It seems like QR code is an exciting, effective new marketing tool … or is it?

What is a QR code?

Developed in Japan, a QR “Quick Response” code is a specific two-dimensional code that is readable by Smartphones. The numeric codes are a great way to enhance marketing and content, however QR codes require that users have a QR code reader installed in their Smartphone and they link to a mobile website.

QR code can be read by scanning the code with a Smartphone, which allows the user to access the encrypted content. Users will be then directed to the mobile site in the internet, where they are able to discover additional information or buy the product online.

How to use QR codes in marketing?

There are many ways to use QR codes in your communication campaigns to enhance the user experience and connect with the users:

• Implement QR code in your offline promotions: QR codes are a great way to connect offline with online through for example print ads, TV, magazines, posters, and direct mail, but do not forget usability, for example billboards on highways and underground are not likely to work.
• Implement QR code in your online promotions: implement QR codes to your website, online promotions, microsites, social media, etc. to enhance the content.
• Engage with audience with location-based QR codes: let users interact with you via QR codes on windows, maps and other physical signs. This could be for example used as part of a mobile game or competition linking to reality allowing users to search and discover next steps or locations via QR codes.
• Surprise with QR codes in unusual locations:use QR codes in unexpected locations such as buildings, museums, windows, etc. to provoke users…they have even been used in tombstones. In South Korea one of the supermarket chains created a digital supermarket in a tube station, where users could use their Smartphones to scan the QR codes and put the products in their shopping cart. These were then delivered home when they returned from work.
• Use QR to provide contact information: Add QR code with contact and route information into business cards, flyers, event handouts, event invitations, etc. (but remember to add text contact details as well, since not all prospects have a smarphone or QR reader).
• Give special QR discounts: implement an offer specifically targeted for the QR code readers to give users feeling of exclusivity and to push them to buy the product/service.
• Enhance product and in-store information with QR codes: give additional value for the users by implementing a QR code with additional product information and reviews in product packages and promotional offers. You can also add product usage information such as recipes, manuals, show-and-tell videos, post-purchase information, etc. and product origin information, for example where, when and how the product was made/cultivated, if the pesticides were used, etc. A pioneer in this field is the Japanese food wholesaler Aeon, which has been providing information via QR codes since 2004.

Who uses QR codes?

What comes to the QR usage demographics, according to ComScore study, 60.5% of the users who scanned a QR code in the U.S in June 2011 were male and 53.4% were between 18-34. The usage of QR codes sounds even more interesting when you take in account the income: more than 1 out of every 3 QR user in the US has a household income of at least 100,000$.

How and where mobile users interact with QR codes?

In the US most of the users (49.4%) scanned QR code from a printed magazine or newspaper, product packaging (35.3%) was the second popular QR source, followed by website (27.4%) and poster/flyer/kiosk (23.5%). Interestingly, 13.4% had scanned the QR in business card/brochure, 12.8% had scanned it in the store front, and only 11.7% on TV.

But where do mobile users scan QR codes? According to ComScore, in the US 58% of the mobile users who scanned a QR code did so at home, 39.4% scanned the code in retail store, and 24.5% in grocery store. Almost 20% of the users scanned the QR code at work, 12.6% outside or in public transport, and 7.6% did so in restaurant.

In Europe 57.4% of the mobile users scanned a QR code at home, 22.6% scanned it at work, and 20% scanned the code outside or on public transport. 18% of the users scanned a QR code in retail store, 17.2% scanned it in supermarket and only 5.7% in restaurant.

Increasing global QR code usage

In Q1 2011 worldwide QR code usage grew by 61.9% over Q4/2010. The US (181%), the UK (167%), Netherlands (146%), Spain (94%) and Canada (94%) were the top growing countries.

Top countries QR code usage Q3 2011:

1. Japan
2. US (51%)
3. UK (8%)
4. Netherlands (4%)
5. Colombia (4%)
6. Canada
7. Italy
8. Germany
9. Spain
10. Brazil
11. Mexico
12. Saudi Arabia

What comes to the mobile OS, in Q2 2011 Android phones lead iPhones with more than 8%, but in Q3 iPhones are responsible for 30% of scans while Androids are responsible for 23%.

Exciting for marketers, confusing for users

While the marketing usage of QR codes is increasing globally, the users still need to learn how to use them. According to a new research by Archrival, QR code is an ineffective marketing tool when targeting young people and it lacks attractiveness. When Archrival interviewed more than 500 university students in the US, they found that these have very little interest in QR codes. Mostly QR codes are ignored, even if 81% of the students has a Smartphone and 80% has seen a QR code in some occasion.

Why the lack of interest? According to the study, only 21% of the students had managed to scan a QR code. There were difficulties because some students believed that they only needed a camera to scan the code and were not aware that they would need to upload an app. Many of them got bored during the process because it took a long time and others directly did not want to download a scanning app.

These are important obstacles marketers need to take in account while using QR codes in a strategy directed for young consumers. Let’s remember that what comes to the trends especially in technology, the trends do not spread from old to young consumers, but it is the youth who start the trends that then spread to mainstream.

Even if the QR codes have a lot of potential, the fact people do not know they need to use specific applications to read the codes or how to get the apps to view the content is without a doubt one of the big challenges marketers are facing. However, if the QR code reader would be automatically integrated in mobiles like in Japan, the mobile users would be more likely to adapt the new tool.

Anyhow, QR codes are a great way to link offline to online and enhance the user experience. It might be worth experimenting with the QR codes now when the audience is smaller so by the time QR codes become mainstream you have the experience and knowhow to beat the competition. That is if the users actually learn how to scan them.

Social Media, Social Networks, Social Commerce … there is no escaping social these days especially after the launch of Google+. We communicate with the consumers via wall posts and tweets, build our business network in LinkedIn instead of meeting face-to-face and handle customer service via Twitter. But maybe we are right to become so obsessed with Social Media.

According to an European comScore MobiLens study, the mobile social networking has increased  44% in France, Germany, Italy, Spain and the UK during 2011. What is even more interesting is that more than 40% of the European Mobile Social Networking users are engaging with brands.

 Snapshot of the 2011 European mobile market

•  UK and Spain are leading countries in Smartphone usage with 46.9% and 46.3% penetration respectively, compared to the European average of 40.1%. Germany has the lowest Smartphone penetration with 33%.
• British and Spanish mobile users also use non pre-installed apps above European average of 34.5%, UK with 44.9% and Spain with 35.4%. Germans have the lowest percentage with 30.4%.
• 46.9% of the mobile users in the UK and 35.3% in France use browser, compared to the European average of 35%. Germans users browse the least with 28.4%.
• 33.8% of the British , 30.1% of the Italian and 28.7% of the Spanish users play mobile games, compared to the European average of 26.5%. French users play games the least with 15.6%.
• Sending text messages is the most popular mobile activity across all five European markets, the average reaching 82.9%.
• 32.6% of the Spanish mobile users listen to music, above European average of 25.9%. Only 23.3% of the French use mobile to listen to music.
• 35.1% of the UK mobile users access news, way above European average of 18.5%. Germans are the least interested on news, with 15.7%.
• 35.1% of the UK mobile users access social networks and blogs well above average of 23.5%. Germans were the least social with 17.3%

 Increasing mobile social network addiction

 55.1 million European mobile users accessed social networks or blogs via mobile devices in September 2011 only, representing 23.5% of the total mobile audience. Not only did the mobile social media usage nearly double, but 47% of the users accessed social networks and blogs daily.

“Over the past year we have seen social networking use grow rapidly among mobile users across Europe, driven largely by the growth in smartphone adoption, making it easier than ever for users to stay connected and engage in social activities while on-the-go,” stated Jeremy Copp, comScore Europe vice president for Mobile. “More notably, the rate of growth in daily social networking usage has surpassed even the rate of growth in total social networking adoption among mobile users, suggesting that the behavior is becoming even more ingrained into people’s daily mobile lives. As social networks continue to invest in improving the user experience on mobile devices and tablets, it will be interesting to see how social behaviours on the mobile platform further evolve.”

 Interestingly, while most of the European mobile users accessed social networking sites via browser (31.3 million), the usage of social network mobile apps doubled to 24.2 million.

Mobile Social Networking Activities

Finally good news for marketers: 44% of the mobile social networking users admitted reading posts from brands and about 27% reported receiving offers, coupons or deals on their mobiles.

 What comes to other activities, 74% of the users read posts from people they know and 62% updated their status. Peer recommendation also has an important role with 35% of the users posting links to websites and 49% of the users following posted links to websites.

Leading European mobile social networks

In 2011 Facebook increased its European mobile audience 54% up to 39 million. This represents 71% of the EU5 mobile social networking audience positioning Facebook as a clear leader. However, even if the social network gathered the most users, it did not experience as big growth as its competitors: Twitter grew its mobile audience 115% up to 8.6 million, 2.2 million unique users accessed LinkedIn increasing network’s mobile users by 134% and the Spanish social network Tuenti grew by 60% gathering 2.3 million unique users.

Go social, think local

The results highlight the importance of Social Media in European brand communication strategy. With localized mobile site and social network pages brands can increase user engagement and user referrals, and the little snapshot of the social media activities can provide some insight to the best tactics in each country. While building a game app seems to work in the UK and Spain, a mobile game might not be very successful in France.

Reaching European audience is tricky because of the different languages, cultures and customs, but for brand to engage with the European audience, social media seems like a good starting point.