95% of the orders at Hallmark Business Connections are processed online, CEO Tressa Angell says.
Consumers are eating up data, apps, music, video and more, a study finds.
2011 was the first year that global consumer spending on media content, apps and services for mobile phones broke through the $100 billion barrier, according to the Global Mobile Media Forecast from Strategy Analytics. Consumers will increase spending on mobile media from $121.8 billion in 2011 to $138.2 billion in 2012, a 13.4% jump, predicts Strategy Analytics, a research and consulting firm. At the same time, advertisers’ spending on mobile media is expected to almost double, increasing 84.1% from $6.3 billion to $11.6 billion, resulting in the total mobile media market reaching $149.8 billion in revenue in 2012, a 17.0% increase from $128.1 billion in 2011.
Mobile media includes wireless carrier data plans, social network microtransactions (such as Facebook coins), apps (in-app transactions and in-app advertising), music, wallpapers, and advertising associated with videos.
Most consumer spending, 60.2%, is on data plans, making wireless carriers the key beneficiaries to the tune of $82.8 billion in 2012, up 9.5% on 2011, the firm predicts. A key driver of mobile media growth, however, is the apps market on smartphones. Consumers across the globe downloaded more than 23 billion apps in 2011; this will increase by 38% to more than 32 billion in 2012, the forecast says.
Apps is now the second largest category for sales, for both consumer and advertiser spending, and is becoming the key distribution mechanism for media on mobile phones, Strategy Analytics says. Apps are expected to account for 18.9% of global consumer mobile media spending in 2012—$26.1 billion, up 30.7% from 2011. The strength of the apps ecosystem is also demonstrated by advertiser spending. For example, in 2011 across the U.S. and major Western European markets as a whole, the firm says, revenue from display ads on the mobile web, $934.5 million, has been overtaken by in-app advertising, $1.7 billion.
“Advertisers chase eyeballs, so the fact that brands spend more on in-app advertising than the mobile web is a clear sign that apps are what consumers are glued to for an increasing range of activities,” says David MacQueen, director of wireless media strategies at Strategy Analytics. “In the eyes of many advertisers, web browsing on the smartphone is playing second fiddle to the app economy.”
Music remains one of the top mobile media categories globally; it will account for $16.0 billion or 11.6% of 2012 consumer spending, the firm predicts. However, the way consumers access and pay for music is changing. Ringtones are declining fast, but streaming music services such as Spotify, Pandora and Deezer—paid for by subscription or through advertising—are gaining traction in Western Europe and the U.S., the firm says.
As with apps, growth of mobile video usage is increasing dramatically; 108 billion videos were watched on mobile phones in 2011, and that will almost triple to 280 billion in 2012, Strategy Analytics says. However, unlike apps, this isn’t translating into parallel revenue. Despite 23.8% revenue growth, video is likely to account for a mere 2.4%, or $3.6 billion, of total mobile media revenue in 2012, the firm predicts.
“Low revenues are due to many major mobile video services being free to the end user, either funded by advertising, such as with YouTube, or ‘bundled’ without additional cost by pay TV providers, such as with AT&T U-verse,” MacQueen says. “Despite the huge audience of 271 million users, ad revenues from mobile video are tiny—just $223 million globally in 2011. While ad revenues will more than triple to $726 million in 2012, it is still clearly challenging for advertisers looking to reach consumers through video ads on smartphones.”
Revenue related to social network mobile content, apps and services is expected to increase by 16.1% to $17.6 billion in 2012, accounting for 11.8% of all mobile media revenue, Strategy Analytics predicts.
The U.S. mobile media economy is expected to outperform the global growth figure, increasing by 22.1% to nearly $38 billion in 2012, the firm predicts. U.S. consumer spending is also expected to outperform the global rate—15.5% versus 13.4%—rising to approximately $33.7 billion. Advertiser spending on mobile media is projected to more than double in 2012, increasing 128.9% to just under $4.2 billion.
U.S. consumers are expected to spend $6.7 billion on mobile apps in 2012, a 24.6% increase over 2011, and accounting for 20% of all U.S. consumer mobile media spending, the firm predicts. U.S. advertising revenue on mobile apps is projected to reach $1.2 billion in 2012, a 118% increase over 2011. The strength of the apps ecosystem in the U.S. is evidenced by the fact that in-app advertising revenue is more than double the revenue from mobile web display advertising in 2012, which is projected to reach $556 million, the firm says.