In this report we show the findings of our 2012 UK mobile user survey. The report is a wide ranging analysis of the mobile market based on our consumer research, focusing on the competitive landscape among the mobile operators and smartphone manufacturers, and the changing consumer behaviour that has and will continue to impact the market
Recent news flow and feedback from media buyers indicates that growth in UK internet advertising is slowing due to the ongoing weakness in the economy
Paid search, buttressed by its link to e-commerce and measurable ROI, is suffering less than internet display, with growth in spend on social media slowing and price deflation especially for non-premium inventory
Online classifieds are also being hit by the economic woe, resulting in some sectors growing more slowly and non-advertising communications taking a larger share of spend; the secular shift to the internet continues
Analysis of comScore data suggests that ad volumes fell in April on Facebook’s PC-based website in the US and UK, which we estimate account for 60% of ad revenue Seasonal effects may account for some of the decline, but increasing pressure on ad performance and pricing, due to the tough economic climate, and slowing growth in PC usage of Facebook are other probable factors As a result we expect Facebook’s ad revenue growth slowdown to continue in Q2, with audience saturation in key internet markets and increasing mobile substitution limiting future growth potential from display advertising
France’s sole cable operator, the smallest of the country’s five broadband providers, is sub-scale on the retail market and the heavy cost of servicing its debt leaves only meagre resources to leverage its superior network commercially
However, thanks to its white label deal with Bouygues, Numericable has resumed revenue growth and should achieve its 2014 debt/EBITDA target
As France Télécom’s network upgrade to fibre progresses, the main upside for Numericable lies in a closer alliance with Bouygues and possibly other DSL providers
US music publishers have reached agreement on rolling over the mechanical royalties due on sales of digital and physical music formats for 2013-17
The expanded scope of the statute to cover ‘scan and match’ cloud locker services, such as Apple’s iTunes Match, provides incremental revenues to music publishers; the unlicensed ‘storage’ cloud locker services are not concerned
ASCAP’s agreement on US radio performance royalties will however reduce music publisher revenues
According to IABUK/PwC, internet advertising grew 14.4% like-for-like in 2011 to £4.8 billion, overtaking press to become the single largest advertising medium
Search was again the main growth driver, surging 17.5% to £2.7 billion last year, while display rose 13.4% and classifieds increased just 5.2% on the weak economy
We now forecast internet advertising will increase 14% in 2012 and 12% in 2013, taking spend to £6.1 billion or 36% of UK advertising, up from 30% in 2011
UK mobile advertising jumped 157% year-on-year to £203 million in 2011, marginally higher than our forecast of £180 million, with strong growth in both search and display
Mobile advertising now accounts for 6% of internet search and display spend, but still lags mobile devices’ share of internet consumption, which has been rising strongly due to rapid smartphone and tablet adoption, and we estimate is now at around 15%
We expect much of the lag between mobile’s share of internet consumption and ad spend to disappear over the next five years, indicating continued high growth
Google+, the social network, has around 100 million users worldwide, although user growth appears to have stalled and usage is low on weak network effects
Facebook users, now 70% of the adult internet audience (excluding China), have no incentive to switch to Google+, starving the social network of vital momentum
Facebook is likely to dominate socially enhanced search, unless Google+ takes off, which seems unlikely
In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request.
Mobile operators, services and handset makers are diverging – they all come to the MWC but have increasingly little to say to each other as their businesses move in very different directions
In the context of -5% European mobile revenue growth, the MNOs at the MWC were a sober bunch, focusing on industrial services, defensive moves around messaging, and a (not unreasonable) plea to regulators for some relief
As competition in Android intensifies between hundreds of black plastic rectangles, the picture for OEMs looks tough but Google’s failure to make Android work well for developers may also start to bite, leaving an opening for Nokia and Windows Phone