International Digital Marketing

With more than 425 million monthly active users utilizing Facebook mobile products in December 2011 only, the social networking platform is finally focusing on mobile and tablets in 2012. Wise decision, since not only Smartphone market is increasing, but according to a research by BI Intelligence global tablet sales will reach 500 million units per year by 2015 – exceeding the number of PCs currently sold per year (~360 million).

Facebook has mentioned that as part of its mobile monetisation strategy it will start using “sponsored stories” in mobile users news feed. But is that really all?

Facebook – more than a simple platform

Until now Facebook has been focusing on normal web strategy and constant updates that seem to make its users’ life more difficult. But hate Facebook or not, the social network is becoming much more than just a platform. Facebook is on its way to become its own Internet portal by using Facebook IDs as an online passport to various products and services hosted on its own developer platform.

Facebook’s inter-connected business model has worked well and the company has created its own successful ecosystem. The social network has made great progress especially with social gaming, and its close relationship with Zynga (FarmVille, Mafia Wars) has been very beneficial for both.  F-commerce is also blooming with companies trying to get more touchable return on their social media investment and Facebook has even launched its own online virtual currency called Facebook credits. They allow Facebook developers to offer in-app purchases with Facebook cutting 30% of the revenue. A similar model Apple uses in its App store.

Facebook mobile monetisation strategy

Now there is the problem. Facebook needs to establish a proper mobile monetisation strategy, yet the native app store model is very restrictive. For example, Apple takes off 30% revenue of the apps sold, and insists on maintaining control of the iOS payments process. This means that Facebook cannot take advantage of ‘in-apps payments’: a revenue generated by its current ecosystem.

What comes to f-commerce, according to a study by Shopatron, most of the tablet owners find shopping with the tablet engaging, and the conversion rate from tablets is much higher than conversion rate from mobiles or even PCs. If Facebook wants to expand its F-commerce business, it needs to offer companies a way to create a tablet optimized social shopping experience, and lure them away from iPad apps.

Will Facebook abandon App store?

Probably not. The social network is not likely to ditch the existing native apps, because they already have a large user base and work well with the different OS. However, Facebook has a team (so called Project Spartan) playing with HTML5 technology, which is a coding language that allows companies to develop one mobile / tablet app that is suitable for any device or operating system. According to a research firm Strategy Analytics, 1 billion HTML5 compatible phones are to be shipped in 2013(up from 336 million in 2011), which brings interesting possibilities.

If the company starts creating its own apps without registration fees and payment restrictions, it is free to monetise via Facebook Credit and in-apps payments. Quite a significant move, since if Facebook starts developing HTML5 apps many companies and its partners are likely to follow. Which certainly will not make Apple happy.

We will see. There are many other possibilities for Facebook in mobile space, such as augmented reality with facial recognition, and the company also needs to consider very well whether it is worth making another powerful enemy, especially when iPad3 is coming up. If Facebook starts competing with Apple’s App store, their relationship status is likely to become “complicated”.

According to a research firm IDC, tablet market in Europe, the Middle East and Africa (EMEA) made up about 33% of last year’s global sales. The company also estimates that the EMEA media tablet market will more than triple in 2011 to reach 22 million units.

However, research firm Forrester predicts that tablet market in EMEA will account for 14.5 million units, or 30%, of worldwide consumer tablet sales in 2011. Not as positive prediction as 22 million units, yet the research firm indicates that more than 43 million Europeans say they are interested in buying a tablet in the future.

Apple, not Android, dominates Europe

Despite recent Android launches in Europe, Apple still has 70% market share for tablet sell-through to consumers in Europe. It means that other tablet makers have product in retail channels, but it is not moving nearly as quickly as Apple’s iPad. Main reason is that non-iPad tablet competitors’ content ecosystem, applications and channel strategy are not as effective as Apple’s and their tablets’ prices are perceived too high.

Apple’s weakness outside the UK

However, Apple has a smaller number of Apple store outlets across Europe (52) compared to its more extensive network in the U.S.(240). What makes this even more interesting is that 30 of these Apple stores are located in the UK, leaving 22 for the rest of the Europe. It means that Apple could be vulnerable to competition outside the UK, since Apple’s brand and channel presence is not as strong in the continental Europe. For example, Mac ownership is lower in all EU-7 countries than it is in the U.S.

This weakness could give Samsung, HP, Acer and Research in Motion a chance to gain more market share in Europe yet if the prices remain the same, there is a danger that low-cost tablets from ODMs such as Huawei and ZTE will enter the market quickly and steal market share.

No content or apps? No customers.

Yet even if consumers like low prices, being cheap is not enough to make them purchase the product. For tablet to be successful in Europe it has to be user-friendly, and have attractive content and useful applications both for free time as well as business purposes. In a very culturally diverse Europe it is very important to have local content providers, because English is simply not enough.

What comes to t-commerce, most of the tablet owners find shopping with the tablet more engaging and a study by e-commerce platform provider Shopatron, supporting more than 800 brand stores in 35 industries, claims that the conversion rate from tablets is much higher than conversion rate from mobiles or even PCs. According to the study, the average conversion rates for non mobile optimized pages (iPhone, Android, iPod…) was an average of 0.37%, yet the average conversion rate from iPad was a whopping 2.04%.

This means that t-commerce is another aspect tablet developers need to take in account while optimizing the user experience.

Anyone to challenge Apple?

Even if there are many competitors rushing into European market, Forrester argues that at the moment there is no serious iPad challenger on sight. This will not change and people will keep on buying iPads unless a competitor with competitive price, quality hardware and successful content ecosystem emerges.

Google might just do this. The search giant has agreed to pay $12.5bn in cash for Motorola Mobility to move  decisively into the hardware and into even more intense competition with Apple and Microsoft. Larry Page, Google’s CEO, said the reason for the move was to “supercharge the entire Android ecosystem for the benefit of consumers, partners and developers”.

What would be interesting to see is Nokia and Microsoft taking on the challenge to compete with the two. Nokia is known around Europe for its high quality and Microsoft office programs would result very attractive and familiar for European business users. If Microsoft does not invest in mobile and tablet market, the company will see its market share diminish. Nokia meanwhile has also strong reputation in emerging markets, which could help them to keep their market share.

In the end of the day, Nokia still has the strongest foothold in European mobile market even if all we hear about is Apple and Android. But as we Finns say: empty barrels make the most noise.

Samsung is launching today 3D interactive iPad ad for the Galaxy SII Smartphone in the UK. The campaign, created by Cooliris and devised by Starcom Mediavest, will be displayed on iPad’s TV Guide app and users are able to interact and manipulate an image of the SII through their touch screens. The ad employs 3D technology using for example parallax and motion effects and more traditional uses of light and shade.

 What comes to 3D mobile devices, last year Sharp was making a lot of buzz with its glass-free 3D tablet prototype in IFA 2010. This summer Sprint will be introducing the HTC EVO 3D handset, which has dual cameras for users to capture 3D photos and videos. Meanwhile, LG Electronics and YouTube have formed a strategic partnership to bring a 3D mobile experience to users. LG’s upcoming Android-powered Optimus 3D Smartphone allows users to capture and view 3D videos without special glasses. The twist is that the users can also upload and share these 3D videos instantly via YouTube.

We all love 3D movies – could 3D mobile and tablet marketing be the next “Avatar”?

Increasing 3D Market

But how popular 3D actually is? According to a research by Display Search, 3D TV units accounted for 9% of global TV sales. According to IHS iSuppli research, due to declining prices and increasing content availability, worldwide shipments of 3-D TVs will increase by 463% in 2011, reaching 23.4 million units.

In China, 3D TVs accounts for 10% of all LCD sets purchased, and China Electronic Chamber of Commerce estimates the figure to reach 5 million units by end of 2011. What comes to Europe, a new study from Futursource Consulting claims that by 2015 almost 40% of the Western European households (approx. 65 million) will have a 3D TV.

However, other studies are not so positive and the sales have been disappointing ever since 3D TV was launched. While 3D TV is seen as a very cool thing to have, the majority of the consumers prefer staying with the 2D format. Main obstacles for adoption are cost, required glasses and the fact there are not enough 3D content available.

3D Mobile & Tablet Marketing

“One of the advantages of creating 3D campaigns around the handset is that glasses are not required. Because of the targeted nature of mobile, you could detect what kind of handset a customer has and send them 3D advertising.”

Ross Rubin, executive director, The NPD Group

While the actual customer base for 3D mobile is quite small at this moment, there is a lot of potential in 3D mobile and tablet marketing. First of all any content in 3D still stands out and the cost of the 3D mobile handset is very low compared to the 3D TV set. Another advantage compared to the 3D TV sets is that with the mobile devices special glasses are not needed, because of the new autostereoscopic technologies.

Brands are already playing with Augmented Reality, but it still remains bit of a mystery for the mainstream consumers. 3D however is already familiar for users due to 3D movies, Nintendo 3DS and 3D TV set advertising. Not having to educate the users makes consumer adaptation much faster and if the consumer is interested in 3D content … the advertisers will follow.

But 3D mobile offers more opportunities for marketers than only creating interactive ads. The possibilities range from sponsored games to viral marketing, game and movie trailers and competitions. Games are one of the largest app categories and sponsored 3D game is likely to create buzz in social networks as well as press. Also, giving the possibility for users not only to view, but also take and share 3D photos and videos can increase user participation and engagement. Even creating a mobile/tablet 3D community is possible.

Future in 3D

How fast the 3D mobile market develops and how fast it becomes mainstream depend on the availability of content, quantity and price of the 3D mobile devices and quality of the content itself.

The challenge with Smartphones and tablets is that different handsets use different technologies, meaning that just like with apps, content developers need to choose which handset they are creating the content for. This is why the mobile companies need to have a head start in this new technology and leave competitors behind. Once you have the biggest selling 3D mobile device, the statistics play on your benefit and game and content developers will choose your brand.

It will be very interesting to see how game developers, companies and advertisers will respond to 3D mobile devices. In a way it is a two way street. For 3D games, content and devices to be successful, consumers need to adopt 3D mobile technology. But for consumers to adopt it, they need available 3D content, entertainment and quality devices to get motivated.

Maybe I am biased, but Angry Birds in 3D would definitely tempt me to buy one.

E-commerce, M-commerce, now T-commerce…just like Smartphones, the amount of “tablets” such as iPads is increasing across the globe. In 2010 Apple sold 14,8 million iPads and the Analyst IDC estimates the number of tablets, not just iPads, to reach 44 million in 2011. Meanwhile, according to Forrester, many retailers report that over 50% of their mobile traffic is now coming from the tablets.

What is very interesting is that a study by e-commerce platform provider Shopatron, supporting more than 800 brand stores in 35 industries, claims that the conversion rate from tablets is much higher than conversion rate from mobiles or even PCs. According to the study, the average conversion rates for non mobile optimized pages (iPhone, Android, iPod…) was an average of 0.37%, yet the average conversion rate from iPad was a whopping 2.04%. For some of the e-commerce stores the iPad conversion rate was double than the conversion rate from personal computers.

Are tablets better for e-Commerce than Smartphones?

Smartphones used for investigation

Consumers are using mobiles to investigate before buying a product, but not for actual transactions. Currently 6-8% of the retailers’ traffic comes through mobile, but only 1% of the final purchases are done by mobile.

This is mainly because, unless the web is mobile optimized, transactions through mobile are not very user friendly, especially if the user has to fill up long forms. Instead, Smartphone is ideal for users to investigate products and do a pre-purchase at any time in any place. Consumers access mainly the product price, availability and client reviews. During the weekend consumers dedicate 30% more time on investigation than other days per week

This reflects in the number of searches. According to the Google Mobile, in Q1 2010 mobile search queries from Smartphones on Google grew 62% over the previous quarter. Concerning the m-commerce, Google mobile searches on shopping-related keywords grew 2500% in the past three years.

To enhance users mobile shopping experience, here are some tips on how to mobile optimize your site.

Tablets used for purchases

Let’s face it: tablets are bigger and with a bigger screen the shopping experience is closer to the familiar PC e-commerce experience. The buying process is also much simpler. It can actually turn out to be much richer and exciting with a touch screen giving the user a bigger possibility to interact with the brand and the store.

And of course, another reason is that there are far too many non mobile optimized sites. A webpage that is unpleasant to browse in a mobile looks slightly more appealing in a bigger tablet screen. Still not optimal, but better.

Tablet users want more precise and up-to-date information than mobile users with all the details of the product, purchase process and delivery. To give users what they want, make sure that the page is “tablet optimized” and the shopping experience as simple and pleasant as possible. Make sure the “shopping basket”, product price and image (and discount if applicable) are always clearly visible. Also test the page in different tablets and check that the content is easy to navigate. Include user reviews and comments and optimize the user journey by making payment and delivery fast and effective.

Tablet, Smartphone or PC?

Why not all three? Whether you call it E, M or T, online commerce is increasing fast and retailers should compensate the decline in physical store sales by investing more in online reputation and sales.

Tablets are coming and offer very nice figures. PC still drives most of the traffic and sales. Smartphones maybe are less likely to be used for transactions than tablets, yet mobiles are considerably increasing the traffic to the actual POS. Besides of search and product investigation, users rely on them to find locations and deals near by, check opening hours, and compare prices online. The potential they have to drive sales offline and online is enormous.

By taking advantage of different channels and devices retailer can stay ahead of the competition, create strong online reputation and increase the number of leads. Therefore it is not wise to concentrate only on one channel, but to invest in e-commerce, t-commerce, m-commerce as well as mobile search.