The Smartphone Revolution and why it matters for your Business

Updated on 25 August 2014

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The smartphone revolution and why it matters for your business

In South Africa, there are currently more SIM cards in circulation than the actual population, considering many people have multi-SIMs for various reasons and often have more than one handset. While this does not mean that everyone has access to a mobile phone, it is still safe to assume that the mobile phone is entrenched in our society.

Why go mobile?

The recent AMPS Mobile Report produced by Silverstone and the MMASA1 shows that 97% of South African adults can be reached through mobile devices in households –making it the highest-reaching medium by far in South Africa.

The low-cost and high-functionality of smartphones is reaching a tipping point, whereby the price difference when compared to feature phones is nominal. Therefore by numbers, smartphones are about to overtake feature phones in South Africa, as is already the case in the US and Europe.

Research on our internet users shows that around 92% are using their smartphones as a preferred means to access the internet, leaving fixed line access way behind, which indicates that in South Africa we have leap-frogged to mobile. So given these figures, is it not time for businesses and brands to ask whether they are leveraging mobile effectively?

Internet-enabled phones make a very exciting medium for rich and interactive advertising. According to a survey initiated by Facebook, out of their 11 million active users per month, 10 million are reaching Facebook via mobile.

“Brands should have mobile as a high priority in the marketing mix”

The concept of mobile marketing is not new – so why the lag?

However, if we look back a few years, perhaps one of the first successful models in South Africa is the “Please Call Me”, where an advert is inserted at the end of the message to target consumers. It is a very sought after medium because it is a cost effective way to advertise and extend reach, although intrusive and therefore often ignored by consumers. Another example is Mxit, whose subscriber base is around 7.4 million users, and has successfully engaged with brands and consumers via their platform.

How to adopt mobile marketing strategies

Mobile marketing has evolved over the years from messaging based advertising to a more targeted medium and now needs to be used more effectively. Therefore, brands should have mobile as a high priority in the marketing mix, with a different approach for different segments of the market.

Mobile inventory can be highly targeted and measurable and brands can leverage mobile network operator’s data about their customers such as gender, age, location, device type and implicated income level from ASPU (Average Spend per user) or device type.

For example, if a brand wants to create a campaign to increase app downloads and their app is built for Android and iOS only, they can target customers that have the relevant operating system and there is no wastage of inventory.

Furthermore, a brand can negotiate a CPD (Cost per download rate) or CPI (cost per install) with the publisher which simply put is a success fee.

“As with any innovation or technology, the biggest rewards often go to the early adopters”

Although the CPD rate is higher than a traditional CPM (Cost per thousand) impressions rate, it makes the campaign far more accountable, as you pay for what you get, whereas a CPM rate is based on how many times, (1000 to be precise) the ad has been seen. CPM-based campaigns are often used when the main objective is to create awareness, whereas CPC (Cost per Click) or CPD campaigns drive a call to action. All of these options make the rates of the campaign align with the campaign objective and therefore much more effective.

Apart from effective rates, the richness of the media makes it extremely attractive with 3D ads, QR Code based advertising, augmented reality, in-app advertising, mobile video and proximity-based advertising which are more contextual and relevant, and enhance the customer experience as demonstrated by higher dwell time and interactivity with the advert.

The future

Looking ahead, with all the advancements in technologies and user engagements, the real key to mobile advertising’s success will be providing contextually relevant advertising through the right channel, to the right audience at the right time.

However, as with any innovation or technology, the biggest rewards often go to the early adopters and if businesses in South Africa can get a foothold in the mobile advertising market and learn the best ways to engage with customers through mobile as a medium, they will begin to build a distinct competitive advantage.

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