Vol1: Managing The Hype - The Reality of Mobile in Canada

Insights for your business

April 2010

Issue

Managing the Hype:The reality of mobile

in Canada

Introduction.......................................................... 3 - 4

Smartphone ownership..............................................5

GPS awareness and usage.................................... 6 - 8

Mobile applications.............................................. 9 - 10

Mobile cameras .................................................11 - 12

Mobile games ...........................................................13

Summary............................................................14 - 15

Data methodology.....................................................16

Delvinia DIG is a quarterly report

prepared by Delvinia Interactive.

The report is a compilation of the

perspectives of Delvinia’s interactive

experts based on data generated by

our proprietary online consumer

research panel, AskingCanadians™

and its French counterpart Qu’en

pensez vous MC.

in this issue

From 99% of the Net Generation (NGen) of users 18 to 34 to 87% of Canadians 65+, the number of Canadians who own mobile devices has never been higher. However, Delvinia’s 2009-2010 study of Canadian mobile behaviours conducted through AskingCanadians™, revealed that most mobile owners don’t appear to be using the more advanced features that mobile providers tout and marketers dream of fully leveraging. In fact, Canadian mobile device users seem to be most comfortable with the basic features that have existed on phones for years such as sending and receiving text messages, using the clock/alarm feature, and taking photos.

Insights for your business 3

Use of mobile device features (Total Canada)

89%56%

52%

52%40%

28%19%18%

Phone calls

Clock/alarm

Text messaging

Camera

Calendar/agenda/organizer

Email

Emergencies Only

Instant messaging/Blackberry messenger

MP3’s /music/ videos

Picture/ video messaging

Web browsing

GPS or mapping services

Downloading (games, ringtones, etc)

Search

Facebook mobile

Contests /promotions

Subscriptions/alerts

Twitter mobile

18%18%

15%14%14%

13%11%

5%4%

3%

introduction

2009

92%

77%76%

67%

55%

37%

30%29%

Phone calls

Clock /alarm

Text messaging

Camera

Calendar / agenda / organizer

Email

MP3’s/music /videos

Picture/video messaging

Instant messaging / Blackberry messenger

Web browsing

Downloading (games, ringtones, etc)

Facebook mobile

GPS or mapping services

Search

Emergencies Only

Contests/promotions

Subscriptions /alerts

Twitter mobile

26%25%

24%22%

21%20%

13%8%

7%6% 2009

Use of mobile device features (NGen)

Even high-tech NGen, despite being the most mobile savvy group, primarily use more basic

aspects of their mobile phones.


But what about those Canadians who own more feature-loaded mobile devices like Blackberries, iPhones and other smartphones? It’s important to realize that although smartphone ownership in Canada is significant and growing, the majority of Canadians do not yet own smartphones.

And while those Canadians who don’t own smartphones are only ever exposed to a limited number of mobile features, Delvinia’s follow up survey and subsequent analysis revealed that even those Canadians who DO own smartphones keep it relatively simple when it comes to the features and functionality they currently use.

A closer look at certain smartphone features and how Canadians use them creates a more precise snapshot of the current smartphone landscape. In this report, we’ll focus on four specific mobile features and functionality: GPS, applications, cameras and games.

Canada’s slow adoption of

smartphones and their advanced

functionality may be tied to the

long-term contracts that owners are

forced into by the major mobile

providers. Three-year contracts are

commonplace, with significant

buy-out fees imposed for early

contract cancellation: customers may

make do with their phone for longer

than they’d like to, rather than pay the

fee to cancel. There may also be

confusion over different rate

packages for smartphones. “Talk

only” packages may be relatively easy

to understand, but rates for SMS and

data can be more complex.

Smartphone owners may be reluctant

to use more advanced features for

fear of high data charges.

Randy MathesonDirector, Emerging Media Platforms


Total smartphone ownership

NGen GenX Boomers 65+

38%

33%

26%

15%

“

”

smartphone ownership

GPS awareness and usage on smartphones is still relatively low among Canadians, particularly among Boomers and the 65+ crowd. While it would be too easy and short-sighted to assume that delay in adoption follows generational lines, limited awareness appears in younger demographics as well. Some 38% of NGen don’t know or aren’t sure whether their smartphones are GPS-equipped.

Based on these results, it isn’t surprising that few Canadians use their mobile GPS on a weekly basis, and over 50% of most generations do not use this feature at all (with the exception of NGen, 41% of whom do not use this feature).


62% 27%11%

49% 40%10%

49% 39% 12%

26% 58% 16%

NGen

GenX

Boomers

65+

Yes No Don’t know/ not sure

Mobile GPS awareness by generation

Every day Several times a week Several times a month

Several times a year or less

Used it but not anymore Never used it

NGen

GenX

Boomers

65+

5% 10% 28% 16% 41%

6% 9% 12% 21% 52%

3%3% 15% 15%2% 61%

100%

Have you enabled the GPS feature on your mobile and used it to locate your position on a map?

gps awareness & usage

Why this lack of awareness and relatively low usage rates of GPS across all generations?

Perhaps it’s the fact that most customers were first introduced to this capability in their cars

with the introduction of in-car GPS systems in the 1990’s. When consumers think GPS, they

automatically think of in-car systems – not their mobile devices.

Additionally, handling your mobile GPS while in transit is unsafe; the in-car systems all offer

real-time voice navigation and onscreen directions, which mobile GPS is only beginning to

offer now in Beta or to business subscribers. According to many survey respondents, they

do not see a need for it because they already have a separate GPS that is clearer and more

user-friendly.

Moreover, most Canadian consumers think that setting up GPS on their mobile phones is

complex and time-consuming, stating “it’s too small and I haven’t had time to investigate

how to set it up” or “I don’t know how it works.” Marketers and product developers take

note: as with any other feature, customers want ease of use. They don’t want to have to

learn how to set it up or use it – they just want something intuitive. This is an opportunity for

product developers and marketers to keep it simple in terms of design and communication.


I don’t need it, nor do I want to pay for it.

“

- NGen

Another opportunity for marketers lies in better communicating a carrier’s data plan.

Canadians cited the cost of GPS (primarily the data exchange) as another reason why they

did not use their mobile GPS feature. Many were either not certain of the cost or didn’t

want to pay for the service. Cost is always going to be a factor but in our current economic

climate, consumers are smart spenders and on the lookout for value. If they already own an

in-car device, many will not pay again to add it to their mobile, nor will they be willing to risk

paying for it if they aren’t sure about coverage under their data plan.

Another implied factor which could affect the relatively low usage is consumer habits.

Respondents indicated that they didn’t need mobile GPS as they determined a route for

their destinations in advance. In the case of an impromptu need for directions, many

Canadians fell back onto existing behaviours such as calling their destination directly,

looking it up online before leaving home, or even using paper-based maps.

Grace MarquezCreative Director


”

No turn by turndirections!

- GenX

While the majority of smartphone owners claim to prefer downloading applications to visiting a website in order to access information via their mobile devices, open-ended responses indicated a great deal of confusion over what in fact a mobile application is.


mobile applications

Mobile applications vs. websites optimized for mobile by smartphone type

I prefer a permanent application thataccessed information right on my device

I prefer to access a website optimized for my mobile's internet rowser

53%

67%

58%

47%

33%

42%

Blackberry iPhone Other smartphone

I am happy usinga browser and Google to search

for the information I need.I guess Google is a website

instead of an app.

If I want the info,I want all of it, not

just a partial like some apps show.

- Boomer

- GenX

Meanwhile, 50% of those surveyed had never downloaded an application at all. Even among the highest app users – NGen and GenX – over 30% have never downloaded a mobile application.


Never downloaded a mobile application(Total Canada)

NGen GenX Boomers 65+ Total

32% 36%

64%

95%

50%

Types of mobile applications downloaded(Total Canada)

32%

22%

21%

21%

15%

10%

9%

7%

6%

5%

4%

Games

Social networking/ Instant messaging

Music

Entertainment

News

Productivity & reference (e.g

calendar)Health & fitness/

lifestyle

Work related

Travelling

Finance & money management

Student-related

For those who are engaging with

mobile applications and leveraging

this aspect of their smartphone

functionality, they prefer experiences

that are fun and relatively basic. The

top application types are gaming,

social networking, music, and

entertainment. More practical,

information-based applications are

far less popular.

So while fun mobile apps may appeal

to a certain audience, marketers must

recognize that creating a

downloadable mobile application may

not always be the way to meet their

objectives through the mobile

channel. And when an application is

the right tactic, making it entertaining

and keeping it simple is important.

Jim MorrisonDirector, Technology

“

”

The mobile camera is one of the more popular mobile features, well-used by all Canadians. It’s a straightforward, easy-to-use feature that requires no set-up – exactly the kind of feature that mobile owners use most often.

Canadians cite a variety of reasons for using the camera on their smartphones, like snapping social outings and live events, and capturing information to help describe something or for future reference, but 70% of smartphone owners don’t consider it their primary camera. Nevertheless, the camera feature on mobile devices has become a mainstay for the majority

of Canadians, and like most features this is especially true for NGen and GenX.

But while the majority of smartphone owners are taking pictures with their mobile devices, most are not using another arguably more complicated functionality for the purpose of sharing the pictures they take. For example, MMS, Facebook and Twitter are only leveraged by 18%, 15% and 1% of Canadians respectively. Instead, almost 60% show their mobile pictures to others in person, while over 30% don’t share the images they take with their mobile devices at all.


mobile cameras

5 Sounds like me a lot 4 2 1 Sounds nothing like me3 Neutral

19% 21% 21% 10% 29%

19% 20% 19% 14% 28%

15% 23% 22% 10% 30%

17% 15% 25% 12% 31%

14% 13% 19% 12% 42%

10% 6% 14% 14% 56%

To what extent do each of the following statements about mobile cameras sound like you? (Total Canada)

I take pictures with my mobile when I'm out with friends in social situations (like parties,

restaurants, and bars).

I take pictures with my mobile to capture information that I want to refer back to at a later time or date

(like the features or the price of a product).

I take pictures on my mobile phone and use them to describe or explain a thing or situation to someone.

I take pictures with my mobile to take pictures of live events, like concerts and sporting events.

I take pictures with my mobile when I'm shopping to get feedback on a potential purchase from

someone who isn't mobile device with me.

My mobile camera is my primary camera - I use it more than any other camera.


Canadian mobile camera behavior reinforces the idea that mobile owners gravitate

towards the easier-to-use features and functionality associated with mobile devices and

shy away from more complicated functionality. But understanding the extent to which

mobile cameras have been adopted by the Canadian masses and recognizing the

marketing potential of this feature could be a powerful tool nonetheless. Imagine dynamic

campaigns designed to leverage this already inherent behavior, while gradually and

effectively educating consumers on how to take mobile camera functionality a step further

to truly interact with brands. It doesn’t have to be leading edge – it has to be effective!

Julianne SmolaVice President, Insight

”

“

In which of the following ways, if any, do you share the pictures you take using your mobile device with other people (Total Canada)

59%

31%

24%

18%

15%

5%

1%

Show pictures on my mobile to others in person

Don’t share pictures taken with my mobile

Send pictures from mobile via email

Send pictures from mobile via MMS

Post pictures from my mobile to Facebook

Post pictures from my mobile elsewhere online

Post pictures from my mobile to Twitter

The mobile camera allowedme to document a faulty

item when it came to makingan immediate in store

refund claim.”

I sawa coolproduct in

the store. It was hardto describe it but when

I took a picturemy friends knew whatI was talking about.

- GenX

- GenX

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Mobile gaming is a feature that has been adopted primarily by younger Canadians. The NGen and GenX groups who grew up with video games are beginning to move their gaming experiences to mobile, while Boomers and the 65+ group are engaging in mobile gaming in a more limited manner.


mobile games

Ways in which games are played on mobile devices (by Generation)

Play games by myself Let others (e.g. my child) play games Play networked games with others

65%

54%

34%

5% 6%

16% 9%

5% 2% 1% 1% 0%

Ngen GenX Boomers 65+

With the launch of Apple’s iPad and their embrace of gaming for the iPhone as well as the

growth of multiple smartphone platforms, the outlets for delivering mobile games are

continuing to expand. But meanwhile, the most popular use of mobile games on smartphones

currently comes in the form of basic pre-installed or downloaded game applications (think

BrickBreaker). Marketers must remain aware that experiential and console-like gaming on

a mobile device is still a new and unfamiliar concept to most users.

Jim MorrisonDirector, Technology

”

“

Although future marketing opportunities may include the new wave of augmented-reality and location-based games, users are still limited in their adoption. After all, only 2% of NGen and 1% of overall users are engaging in networked or social gaming on their mobile devices.

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summary

If you’ve ever left your mobile phone at home, you’ll understand how heavily Canadians have come to rely on mobile technology. Without it there’s an emptiness your landline, email and social media outlets can’t fill.

We’re social by nature and 3G mobile devices provide us with every method of communication we require: Personal communication (talk, text and email); group communication (email, blogging and social media); and event management (social media, calendar and browser). It’s accessible from anywhere you are. And if you’re somewhere you can’t talk, you can type.

This sense of personal connection through our phone is compounded through companion features, including: entertainment (music, gaming), organization (alarm, calendar, tasks), and convenience (camera). Your mobile device helps kill the time, manage your life and keep you informed of, well, everything. With the emergence of mobile dating and banking, is there any aspect of our lives our phones aren’t getting personal with?

As marketers, we see unlimited potential in connecting to consumers through their mobile devices. But, Canadians are far behind other countries in mobile feature use adoption. They are eagerly using features that have a low to moderate learning curve like mobile gaming and camera functionality, but have yet to embrace the deeper features like their European and Asian counterparts.

So, what can a Canadian marketer do to connect with our customer on a meaningful level?

We need to build mobile programs that have high-value to the consumer. Obvious value inspires a willingness to adopt change. And adopting change requires education (on value, usage and set-up). “First adopters” will influence usage with peers and in time, we can instigate a shift in consumer behaviour.

Case in point: not long ago, getting from point A to point B required a map. Something you kept in your glove box. Now, we pre-plan our routes online (Bing/Google/Mapquest) or rely on an in-car GPS system. As mobile mapping and GPS usage increases we may see a new shift in mapping behaviour, where we begin to rely on real-time mapping as opposed to pre-planning. More likely, we will see cross-platform usage, such as send map to phone online or in-car GPS for driving and mobile GPS for walking/public transportation.

In the meantime, it’s important to keep your strategy simple. Mobile is one touch point in your marketing mix. Ask yourself, what value will mobile have for my customer? There are a few other things you should consider when developing a mobile program:

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1. UNDERSTAND THE CUSTOMER EXPERIENCE

Take advantage of the portability of the device but think about the interaction from the consumer’s perspective. Subway advertising may reach engaged commuters, but without a mobile connection, your call-to-action is lost. The interaction needs to be simple and convenient. And it needs to work.

Also, be sensitive to the personal nature of a mobile device. When you communicate through mobile, it’s like reaching into their pocket to deliver your message… and that notification could come at a very inconvenient time.

2. PROVIDE VALUE

We need to rely on deeper insights into consumer wants and needs in order to deliver value. The more value you bring to the consumer, the more willing they are to engage. The value needs to be clear, aligned with your brand and relevant to your offering.

The best mobile strategies leverage the portability of the device, location-based services and pull marketing tactics. Give customers control of how and when they interact with your brand.

3. EDUCATE CONSUMERS

Don’t expect your customers to understand the technology to the extent that you do. Explain the steps clearly. Build trust. Show value. And when they’ve done it once, they will be more likely to do it again. As consumers begin to understand the value and potential of their mobile device, their behaviour and usage will shift.

There’s a big opportunity for marketers who are first to the mobile market. However, don’t enter the market because mobile is “the next big thing”. It works for some – but not for all. Understand that there is a difference between being first and being good.

No matter what your objective, if mobile is going to be part of your marketing mix, it’s good to test what works now and build from there. Creating a mobile friendly newsletter or website may be the first step in understanding your audiences’ acceptance and usage of mobile. Tracking and metrics can also tell you what mobile devices your consumers are using. Continually test, measure and optimize your campaigns.

Our role as marketers is continually evolving. It’s no longer about traditional and digital. It’s about Customer Experience with integrated traditional and digital touch points. And as new digital platforms emerge, we need to distinguish between opportunity and hype. There is a lot of hype around mobile marketing being the next big thing. If we manage the hype, it will turn into endless opportunity.

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DATA METHODOLOGY

AskingCanadians™ and its French counterpart Qu’en pensez vous MC is Delvinia’s proprietary online research panel of Canadian consumers who have opted in to participate in ongoing market research studies.

In October/November 2009, Delvinia conducted its annual re-profiling initiative with all of its AskingCanadians panelists. From the entire pool of responses, Delvinia extracted a statistically representative subset of 5,680 responses (50/50 gender split, age and province breakdowns as per Stats Can) and discovered high mobile phone ownership in Canada, but relatively basic mobile phone feature use.

Delvinia then conducted a follow-up survey in January 2010 with 1,000 statistically representative AskingCanadians smartphone owners to uncover further insights. Results of this survey were obtained within a week.

All analysis and reporting was carried out using SAS analytics platform.

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