Shaun Gregory, managing director of Telefónica Digital's global advertising business, looks at what to expect from the mobile advertising space in 2014.
BLE and beacons will give NFC a run for its money
Bluetooth low energy (or BLE) combined with beacons is expected to be one of the fastest growing trends in 2014. What are they and why do I think they will provide a credible alternative to near-field communications (NFC)?
BLE is new shiny version of the Bluetooth of old, but uses considerably less battery power and costs a lot less to run, whilst maintaining a similar communication range. The beauty about BLE is that is has been installed onto phones since 2011 (including the iPhone), overcoming a significant barrier for NFC. Beacons essentially transmit unique identifiers (UUIDs) to understand the range of reachable devices.
As the two technologies benefit from ease of integration, low infrastructure cost and device availability, together they have the opportunity of bringing the promise of m-commerce to the physical store in a big way.
Opportunities pertaining to mobile payments, couponing, loyalty and customer engagement in-store will start to really become a reality.
The first ever mobile World Cup
2014 sees the World Cup taking place in Brazil, and it's certainly gearing up to put mobile at centre stage. The number of mobile internet users is forecast to grow by 35 per cent in 2014, boosted by the release of low cost smartphones such as Firefox OS, and improved connection speeds, down to the country's national telecoms regulator Anatel stipulating that 4G licensees must provide coverage of all host cities by the end of 2013.
70 per cent of advertisers are already predicting they will be vastly increasing their attention and budgets towards mobile, and with the connectivity foundations in place, it should be something really special.
Programmatic will dominate mobile ad spend
Programmatic has been one of the buzzwords in 2013, with good reason. The value of display ad spending spent through programmatic buying is set to almost treble between now and 2017 from $12bn to $32.6bn worldwide. That means by 2017, 65 per cent of all digital ad spend will be spent through programmatic (although even that estimate in my opinion is conservative).
In total, mobile already accounts for 19 per cent of all programmatic spend in the US, and research suggests more marketers are increasingly planning to use programmatic in the next couple of years (particularly for audience segmentation and media buying auctions). With mobile display ad spend set to grow seven times faster than online worldwide, mobile programmatic will quickly become the norm.
Mobile's data opportunity will be unlocked, and its influence on media planning will go 'beyond the screen'
There will be a merging of technologies, like Wi-Fi and mobile, that will begin to unlock the untapped data opportunity that exists with mobile. This will impact the media planning business model, starting with outdoor and direct mail.
Earlier this year, Telefónica Dynamic Insight's crowd data measurement tool, Smart Steps, helped one British retailer drive 150 per cent uplift in new and reactivated customers. How? It analysed the potential catchment area around Morrisons stores to see how far potential customers would be willing to travel. Smart Steps enabled Morrisons to estimate how often people currently make the journey from a post code sector to a Morrisons store or a competing store. Morrisons used this analysis of aggregated and anonymised journey patterns to determine which neighbourhoods to distribute coupons to.
This application of data truly puts mobile as a whole, not just as a channel, into the heart of the media plan.
M-commerce will become more mainstream
No one can be in any doubt that m-commerce has hit the UK in a big way, now mobile accounts for 23 per cent of all internet retail sales. This Christmas, it's been forecast that £40bn will be spent via mobile, and John Lewis believes that at 5pm on Christmas day, more people will be using their mobile site than their online site, for the first time ever. 'Merry Christmas, mobile' indeed.
But this is now expanding rapidly across other countries too. Globally, more than one billion people will be engaging in m-commerce by 2016.
Sales via mobile are set to increase by 68 per cent across Europe this Christmas. And although only four in 10 mobile users in Latin America have bought something via mobile, there is massive appetite with 58 per cent of m-commerce 'virgins' saying they want to.
What is responsible for fuelling growth? Retailers taking the steps needed to become truly omni-channel. For example, using the same product 'stacks' to offer the same range across multiple devices, and enabling touch-points within their physical stores that actively encourage showrooming behaviour, such as scannable codes for product information.
It's this kind of connected technology that will make the difference and allow retailers to stand out to customers in 2014.
Shaun Gregory is managing director of Telefónica Digital's global advertising business