Mobile internet revolution

Mobile advertising

1. In the first quarter of 2011, more than 23.2 billion ad banners were delivered across the entire network.
   a. This represents a quarter-on-quarter increase of 38 per cent, with the top 20 countries delivering 79 per cent of all banners served (18.4 billion ad impresions).
   b. Cumulatively, the top 20 countries reached over 136 million unique users.
2. During the first quarter, the average cost per click across the entire network was $0.029 (2.9 cents per click). Detailed network statistics are available at planner.buzzcity.com.
3. India, Indonesia, the United States, Korea and South Africa continued their dominance among the top five countries.
   a. In India, continued growth of user activity was matched with advertiser interest. This resulted in an increase of 44 per cent in banners served. User activity was centred on cricket and 50 per cent of game downloads in India were related to cricket. Advertisers and developers took advantage of this and launched cricket-themed applications, games and marketing campaigns.
   b. Indonesia remained in second place as advertiser interest increased early in the year. Ad banners served increased by 31 per cent.
   c. Traffic in the United States grew by 72 per cent as numerous online affiliate programmes expanded into mobile.
   d. The growth of Korean traffic continued in the first quarter, driven by brand campaigns. More than 740 million banners were served to Korean audiences — a growth of 92 per cent from the previous quarter. This growth puts Korea in 4th place.
   e. In 5th place for the quarter is South Africa. After four quarters of double-digit growth, advertiser activity softened somewhat, resulting in a drop of 31 per cent in ad banners served.
4. Among the Top 10,
   a. Saudi Arabia remained in 6th place as traffic grew by 16 per cent.
   b. Vietnam remained in 7th place, with more than 550 million ad banners served – a rise of 37 per cent.
   c. Kenyan traffic fell from 5th place as growth softened (3 per cent growth for the quarter).
   d. Nigeria (43 per cent) remained in 9th place, and China rose to 10th place with a 130 per cent increase in traffic.
5. Advertiser interest continues to grow in Central and South American markets. Mexico (93 per cent) and Brazil (80 per cent) both continued double-digit growth. Costa Rica (in 44th place) grew by 133 per cent and Uruguay (in 47th place) grew by 31 per cent.
   a. The rapid uptake of mobile internet campaigns in Central and South America is led by a strong presence of carriers promoting mobile services, and the rollout of 3G in many markets.
6. In Egypt, political upheaval interrupted growth briefly (for ten days) but overall growth over the first quarter amounted to 144 per cent.
7. Throughout the first quarter, the majority of advertisers remain those in the mobile industry with campaigns that offer mobile content.
   a. Noticeably, a large proportion of these campaigns were those offering pay-perdownload games by various mobile VAS players.

Mobile games & apps

1. User demand for (paid) content is also reflected in freemium game downloads. 2010 saw the resurgence of mobile content and the first quarter of 2011 suggests that consumer demand is yet to peak. Mobile users’ thirst for entertainment continues to increase as game downloads increase by 11per cent (2.6 million) from last quarter.
2. The Djuzz games portal delivered over 25.8 million games in Q1 2011, observing an 11 per cent increase — the result of a 15 per cent increase of monthly unique users since the last quarter. There were 2.2 million unique visitors per month to Djuzz, and each visitor generated at least four downloads.
3. Countries notable for growth are China (71 per cent growth in downloads), Sudan (67 per cent), and Turkey (41 per cent). Central and South America again demonstrated explosive growth. Top performers included Costa Rica (127 per cent), Mexico (104 per cent) and Venezuela (135 per cent).
   a. Growth of the mobile gaming sector is directly attributable to cheaper access rates and more stable networks.
   b. This growth is also the result of demand being met by quality content (including latest titles) released by top developers and digital brands.
4. Among the Top 10 for the first quarter of 2011 are five titles from the fourth quarter of 2010 (RockeTalk, God of the Dead – Inferi Dii, Underground Racer, 3D Street Racing, and The Hero – City of Doom).
5. The Top 10 games represent 24 per cent of overall downloads this quarter (compared to 31 per cent of last quarter). This shows a healthy spread of downloads across a number of titles, and a healthy diversification of user interest.
6. Notable among these titles are:
   a. RockeTalk, which not only held the 1st place consistently but has achieved close to three million downloads just for this quarter
   b. Cricket games 20-20 Cricket and Cricket T20 World Championship, with an increase of 68 per cent and 58 per cent in downloads from last quarter respectively. Cricket games have surged to the top as the Cricket World Cup commenced in mid-February.
   c. Racing games Dangerous Road and Speed Moto, with an increase of 56 per cent and 76 per cent in downloads from last quarter respectively
   d. Action and branded games Combat Club and Kung Fu Fighter, with an increase of 104 per cent and 87 per cent in downloads from last quarter
7. Typically, games in the top 10 are characterised by the following. They are:
   a. Available on many devices and platforms, ranging from feature phones to next-generation smartphones. This improves their accessibility to a variety of market segments.
   b. Localised to particular audiences, or focused on seasonal influences (such as the Cricket World Cup).
   c. Built for brilliant gameplay. These games are designed for 2-minute or 2-hour play sessions, and can be enjoyed either stationary or in-transit.
   d. The remaining 76 per cent were spread over the 10,500+ games available to users, suggesting a broader spread of interest in the variety and quality in games.
8. Eight categories dominated the list of downloads for this quarter:
   a. Action & adventure (26 per cent of downloads)
   b. Racing (15 per cent)
   c. Arcade (13 per cent)
   d. Social & messaging (11 per cent)
   e. Instant Fun (11 per cent)
   f. 3D Games (10 per cent)
   g. Sports (10 per cent)
   h. Movies & TV (8 per cent)

Top handsets

1. By the end of the first quarter, across the globe, the top phones used for surfing ranked as follows:
   a. Nokia (46.2 per cent),
   b. Samsung (12.5 per cent) and
   c. Sony Ericsson (8.4 per cent).
2. Nokia still dominates, but variations are evident in individual markets.
   a. Among game downloads 68 per cent of the top devices used to download games in the 1st quarter were produced by Nokia. Samsung maintains its number 2 position in the top list due to relatively high usage in Vietnam, Thailand, India, the United States and South Africa.
   b. Worthy of note are Android devices, particularly among gamers. Android devices contributed to 4.1 per cent of downloads compared to last quarter’s 2.3 per cent. This surge in usage is led by HTC Droid Incredible™, Samsung Galaxy S™, Google Nexus One™, HTC Desire™, and HTC Wildfire™.

Snapshots: Top markets in March 2011 The pages that follow provide a snapshot of some of our top markets for March 2011, with demographics, traffic growth and handset info. Of the 200 countries to which we serve advertising, these are the countries that our partners request detailed data for, most often. (To find out about any country not listed in the top 10, visit our campaign planner at planner.buzzcity.com.)

INDIA
Summary

• India reached its highest levels of traffic to date in March, with 2.4bn ads served to 49.79m unique users in March 2011.
• Our recommended bid rate remains at $0.03, a bargain for advertisers, with millions of ad impressions available at very reasonable rates.

INDONESIA Summary

• Following a period of market volatility in 2010, Indonesia has resumed strong growth, with 1.4bn ads served in March reaching 18.75m unique users.
• Recommended CPC bid rates of $0.05 reflect increasing advertising demand, and a maturing mobile internet economy.

UNITED STATES
Summary

• Having peaked at over 750m ads served in January this year, US traffic stabilised at 591.1m ads served in March, and a reach of 5.9m unique users.
• Our recommended CPC bid rate remains at $0.08, with upward pricing pressure driven by demand for advertising from mobile chat services and affiliate networks.

Market forecast

1. Resurgent demand for content was seen in 2010; this does not appear to have peaked and will continue to grow in the coming months — particularly (but not only) in emerging markets. 
    
2. Service providers offering mobile entertainment (games, apps, music) will continue to be the largest advertisers.
   a. This is particularly the case in Central and South America where growth in users is strongest. This is expected to continue in the coming months.
   b. Those with products based on Java based phones (J2ME MIDP2.0 128x160 and 240x320) will have ample opportunities.
   c. Those whose strategies include Android and MTK/Maui devices are likely to see more opportunities emerge.
   d. These strategies can include developing online games or applications. Boutique agencies may consider this approach particularly when developing branded/freemium applications for campaigns that have a social networking element.

Feature:
Live music and mobiles
As more people access the internet via their mobiles, cellphones are rapidly becoming a major channel for music. The internet has affected the way the music industry works, by creating new ways in which music can be discovered, promoted, shared and sold.

As the music industry continues to evolve with technology, many are exploring new revenue models, as new tools foster more direct engagement between artists and fans. In many cases this has included releasing free singles or albums.

While selling music is still an important revenue source, live performances have taken a new dimension altogether. In the past, bands would go on tour to promote an album. Now, they release new albums to promote a tour. This has given rise to new revenue models for music as consumer brands are taking note and investing in new music talent on stage. As the pace of live music gains momentum in many urban centres across the world, the internet has become a critical marketing medium in creating buzz for live performances. Marketing via the internet will become more important, as advertising and sponsorships also become an important revenue stream for musicians.

Music is now arguably the most important entertainment content on mobile devices. Ringtones are a staple of mobile content, and ringback tones have become a major revenue-earner for carriers.

Mobiles have also become an essential part of music marketing strategy for many. In May 2006, Planet Funk launched Britain’s first mobile-only single Stop Me in an attempt to provide new and better avenues in distributing music singles beside Apple’s iTunes. In March 2010, French DJ David Guetta launched an iPhone App (with MXP4 and Redshift) to allow fans to interact and connect with David. It also transforms the iPhone to a miniature mixing desk where fans can mix and play with the smash hit Sexy Chick.

There are numerous web services centred on music discovery like Grooveshark, Pandora and The Hype Machine that has spilled over to the mobile space to cater to the growing number of tech-savvy music fans.

Mobiles are also becoming an important tool in the discovery of live music. Initial observations of usage patterns on live music directory JAMsked suggest:

1. Live music, paid or free, continues to attract crowds. 
   a. This is well applied in some shopping malls where free live music (ethnic fusion, pop, jazz) is packaged as part of the shopping experience. 
   b. Peaks in user interest were observed at DLF Mall (New Delhi, India), Norte Shopping (Rio de Janeiro, Brazil), IOI Mall (Johor Bahru, Malaysia), Mall of Asia (Manila, Philippines) and The Mall Bangkae (Bangkok, Thailand).
2. Colleges with captive audiences of students continue to draw musicians, particularly musicians playing experimental, rock, metal, indie and electronic genres.
3. Live music is naturally part of recreational activities and it’s not surprising to see peaks in interest at recreational locations like Narigama Beach (Hikkadua, Sri Lanka), Carnaval Beach (Ancol Bay City, Jakarta, Indonesia) or Siloso Beach (Sentosa, Singapore), Durban Botanical Gardens (Durban, South Africa). In this context Hillcrest Wine Estate and Rhebokskloof Wine Estate (both near Cape Town, South Africa) create great brand awareness by packaging their venue and setting for various social activities including live music. 
4. Performances observed tend to gravitate towards urban or commercial centres. As mobile internet usage spreads into the hinterlands we expect more opportunities to present themselves to musicians, event managers and venue owners. 
5. Users do not just surf to investigate music events in their locale, but often surf to see what concerts are playing in other cities overseas. This may be the result of travel plans but could be music fans finding out what else is on elsewhere. The mobile internet may yet empower a new breed of amateur ‘cool hunters’ on mobile. 
6. Festivals are better marketed and attract sponsors. Some examples include Planet Terra Festival (Sao Paulo, Brazil), which clearly carries the brand of the sponsor, or the Sunburn Festival (Goa, India), which was sponsored and supported by media partners.
7. Live gigs and tours are smaller in scale than festivals, but do provide opportunities for collaboration between consumer brands and musicians. The right lifestyle matches (between brand and band) coupled with the appropriate activations (such as downloads, electronic singles, SMS party invites) could prove to be the right formula for those with a growing following. These could include: 
   * Parikrama (India) 
   * Big Brothers Band, Ina Blues and/rif (Indonesia) 
   * Juanophobia, Julian Mohktar & the Corn Cake Kings (Malaysia) 
   * Artcellism (Bangladesh) 
   * 2 Days Ago, UrbanDub and Blunt Concept (Philippines)
   * SIXX, Trella (Singapore) 
   * Elephant Foot, Jayasri (Sri Lanka) 
   * Mekaal Hasan, Ali Azmat (Pakistan) 
   * Sun Huang, Hanggai (China) 
   * Yellow Cards, 3OH!3, Vampire Weekend (USA) 
   * Mix Hell, Taufic (Brazil) 
   * Bobby van Jaarsveld, Chris Chameleon, 7th Son (South Africa) 
   * DJ K1 (Kenya) 
   * DJ Asad (India) 
   * DJ Kamel Night (France)

Media insight: Monetising apps
With the proliferation of app stores and games portals, developers can sell directly to consumers and in multiple markets. Although bundled subscription services and pay-per-download are common practice, the ‘freemium’ strategy is gaining traction among applications and games developers.

The basic premise of freemium is that the product can be used in and of itself, without necessarily buying something else. There are many variations in the marketplace, but each offers a potential path to profitability.

The techniques can be used anywhere — websites, wapsites, OEMs, on-deck portals, indie stores… even via email.

Try and Buy
This is one of the first freemium models, and is still the most popular. The concept is straightforward. Consumers test an app for free — either for a limited time or with limited functionality. If they like it, they can purchase it outright.

From a consumer perspective, the typical payment process for Try & Buy is much smoother than pay-per-download models, which typically rely on SMS to confirm and reconfirm a purchase.

Developers, meanwhile, have completed control of the price point and territories to support. They also earn on every purchase. To implement the model, developers generally work with Try and Buy SDK providers to embed the approach in their codes.

Virtual Goods
Typically, in-app purchases in the form of virtual currency or goods help to enhance gameplay. Play can continue without the purchase, but the incentive exists for gamers to access bonus features or advance faster. The instant gratification and bragging rights brought by a bigger shield, a colourful vest or a mean-looking pet have spun a whole new industry. Gamers can buy virtual accessories, maps, weapons and even new characters with a single click.

The user flow is seamless, and payment schemes are normally via SMS, wap or credit card. Expect to see an emerging industry of micro-transaction companies, offering virtual goods and credits for use in games. One example from GunBros, incolves gamers spending ‘War Bucks’ to purchase items, armour, weapons and artillery. But first, consumers must purchase the War Bucks, at an exchange rate of 5 War Bucks to one real-world US dollar. Payments are made via credit card.

Mobile Ads
Graphical banners can be displayed before, after, or even during a game. Developers work with distribution networks like BuzzCity to provide automated solutions or SDK codes which can be embedded in an application. There are no upfront costs, developers control the types of ads shown (blocking ads they don't want) and earn ad revenue with every click.

Mobile Rewards
Imagine you’re playing a game and you’d like to buy a virtual shield to protect yourself from demons.

The shield costs 10,000 virtual dinars. But you don’t have that much virtual currency and don’t want to pay the real world equivalent. What to do?

Well, if your time is flexible, a number of companies now offer a solution. Instead of spending cash, take a survey or click on an ad instead. Afterwards, users are rewarded with virtual credits, prizes like unlocked characters, special maps and limited-edition weapons or even free game downloads.

Mobile rewards are financed by advertisers and marketing companies. These are usually publicised at the beginning of a game to entice users to participate. It’s most popular in developing markets where consumers use prepaid SIM cards.

Upgrades/updates
Another way to monetise applications is to offer upgrades and updates for a fee. Rolling out new characters, features and levels after the initial launch of a game keeps users interested, prolongs an application’s shelf life and generates an additional revenue stream, without much additional cost. New skins — often tied to a holiday or festival like Christmas or Halloween — are also popular. Upon startup, apps normally check for updates and if any are available, users are prompted to upgrade. Developers normally build this system internally, as it requires a server to push the update. Payments are provided via normal channels (premium SMS, WAP or credit card).

Cross selling
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