Published on February 16, 2009
Mobile Youth 2009 Part 1 Insights into Youth Mobile Trends and Mobile Behavior
Insights into Youth Mobile Trends and Mobile Behavior 2009 is part 1 of the 4 part mobileYouth report published annually by mobileYouth. This section focuses on the relationship between youth and mobile, changes in how young people are using both mobile and media and how this impacts the mobile industry. To maximize your time invested in the report we suggest the following: mobileYouth :Insights into Youth Mobile Trends and Mobile Behavior 2009 >> How to Use this Report Read slides 4 to 23 to understand we are marketing to youth today, why it doesn’t work and what needs to change. Determine the changes that need to happen at the organizational level to make marketing effective. Read slides 25 to 41 to give you direction in how you will change marketing, market research, consumer insights and product development Read slides 43 to 47 to determine which Beachhead(s) you are going to target and how you will integrate the above Read slides 49 to 86 to create a rough profile outline of your chosen Beachhead(s) Read slides 87 to 108 to measure your outline against the product portfolio you currently are working with Once you have established your target and agreed on both the strategy and metrics initiate the ethnographic research to test your initial hypothesis on which projects will work with these consumers Agree on a project that can coordinate the different organizational departments concerned with product dev’t, marketing and consumer insight and research and give managers first hand exposure to youth. Begin Dialogue, Read Part 2 1. What needs to change? 2. How do we change? 3. Who are our customers? 4. What do they want? 5. How do we give it to them? NEXT STEPS
Last year we highlighted key developments that would impact profitability in 2009 - a natural slowing of youth ARPU growth combined with falling levels of trust in mobile service provider brands. One year on, economic conditions will continue to exacerbate the relationship issue with consumer conservatism manifesting as a flight from untrusted to more reliable brands. Apple's challenge to the mobile is timely; risk aversion compounded by a decline in perceived levels of service leaves the industry's backdoor wide open for new challengers able to deliver reliable products that sit squarely within the paramaters of customer experience. The Ipod Shuffle, for example, is one development generation away from becoming the de facto youth mobile phone displacing existing operator data with new service revenues for hardware manufacturers. Emerging Youth Trends: Trouble Ahead?
Displacement The Slice and the Pie All growth is displacement. Mobile's 10% of the youth spending pie means competitive industries are losing revenues. Since 1999, youth have spent over $2 trillion on mobile services - money lost to non-mobile brands. Competition is no longer about benchmarking your category because youth attention and money is neither budgeted nor spent in isolation of opportunity cost. The RIAA estimates piracy as the biggest threat to the global recorded music industry today - $4.5 billion of the $30 billion annual sales. Yet, youth spend $300 billion annually on mobile suggesting the real competition lies from outside the category. There are 2 key implications: 1) Your competition is not your category 2) Strong youth brands are equally capable of displacing spending on mobile Music Sales Displaced Global recorded music industry revenues continue to decline from their peak in 1999 ($40bn) in line with the growth of youth mobile spending to $28.6bn in 2008. 13% of The Pie Average spend is beginning to slow and even decrease in more advanced markets as mobile spend approaches a natural medium term ceiling restricted by economic conditions and other competitive products Example US Student Spending during 4 month semester source mobileYouth and Student Monitor data 2008 Mobile constitutes 13% of total spend
Doing other things Your consumers may be registered as viewers or receiving your messages but their attention may well be elsewhere. Just because they received it doesn’t mean they took notice. Are you in the 5%? The human brain only processes 5% of the information it receives from sensory input meaning it subconsciously “gates out” 95% of stimuli. Youth gate out marketing messages regardless of whether the message, brand or product is good, exciting, a market leader or cool. The 5% is reserved for what is relevant. See how attention works (video) Supply of Youth Attention Attention is your biggest cost In a focus group, you have youth attention. This is why focus groups offer unnatural insights into how youth consume. The human brain only processes 5% of the sensory information it receives. 95% are therefore "gated" out according to a predefined subconscious criteria. Understanding the selection mechanism youth use means understanding why and how they buy. Technologists are mistaken in thinking that having a great application is enough to get noticed because every company thinks the same. Being "good" is simply not good enough, youth only notice what is relevant. Youth neither wake up thinking about our brands nor listen when we believe we are talking to them. Capturing youth attention means engaging them in dialogue (explained later). Youth watch least TV Unless the previous generation youth today watch significantly less TV than their older peers with viewing increasing beyond the age of 25 Ave Daily Mins of Media Multitasking IMMI 2008 TV viewing times (hours/week) Nielsen 2008
Social Currency: why they buy “Logic is not enough. If all it took was logic, no one would smoke cigarettes” (Seth Godin) When we seek consumer insights into youth behaviour we can take two divergent paths; on the one hand we can ascribe the rationale for why they buy to their desire for “fun, cool, personalization” and other observable traits associated with youth culture. This approach provides quick-fixes because we can make and market without the need to engage in a dialogue but never a long term solution; how can product development and marketing know what’s “cool” when the definition varies so markedly between peer groups and individuals. The second more encompassing approach requires understanding the social dynamic that manifests as the need to consume products in the first place of which mobile is a key part. Once we appreciate the role of Social Currency we gain a better insight into the direction product development should be heading and the real needs of our consumers beyond what they reportedly say to appease researchers.
Beachheads: from mass to niche Industrial marketing can survive in the Industrial Era employing mass market Pipeline tactics because the cost of failure was low. Today, however, not only is the failure associated with irrelevant marketing high (you get shut out, ignored and even generate negative PR) but consumer choice is increasingly less of a compromise and more about finding the products that fulfil your exact social needs as opposed to being the least worst available. Consequently it will be the brands that are able to focus on tightly defined market Beachheads and build trusted dialogue with them that are able to develop the most competitive insights to drive forward product development and marketing. Niche does not necessarily mean small it just means identifiable. Apple can operate a large niche for example by targeting innovative design focused consumers but it has only managed to achieve market scale by first nurturing a passionate core of consumer advocates over time. The mass market growth in Mac market share is not the result of mass market campaigning but Apple’s focus on grass roots activism (K12, Genius etc) combined with a clear dialogue with their core market Beachhead of developers who’s constant drum banging and advocacy has slowly converted media then the later adopters over time
Teens want mobile content but they are generally unwilling to pay for it. Their consumption patterns are conservative favouring group choice over individual risk taking. Teens don’t care much about the handset brand as long as it performs the basics – texting, internet, camera phone and a good speaker. Music defines their social experience and although they are increasingly paying for music they still are avid downloaders of illegal files, are decreasing in their ringtone consumption and prefer side loading their tracks onto the mobile. For this demographic, the shared experience is crucial; many surf the internet either at a friends house or with friends. Mobile also demonstrates similar tendencies; teens are the only age group that use the speaker phone to effect – replacing the age old “boom box”/”ghetto blaster” with the phone to reinforce social ties within a small clique of friends. Teens also use the on-board camera to fulfil their need for belonging often sharing photos among friends but mainly in displaying on handset as opposed to via MMS or Bluetooth. Teens: The Quest of Shared Experience
Central Southern Africa 18.3 million Latin America 33.9 million Western Europe 23.6 million China, Taiwan, HK 52.4 million Central South Asia 49.6 million Asian Pacific 29.8 million North America 19.3 million 272 million mobile teens Where are they? data source mobileYouth.org 2009 Eastern Europe Central Asia 23.7 million Middle East North Africa 12.4 million North East Asia 9.0 million 50% live in Asia Teen mobile ownership
Gender differences are less pronounced than those created by age but there are a few distinctions that are noteworthy for marketers; Girls tend to favor online content over boys who are more exploratory in trying out mobile content. For example, boys outweight significantly in mobile audio and video usage whereas girls favor YouTube. The difference is partly due to the nature of the content available (mobile contains a male bias due to developer traits etc) but also because girls tend to be more conservative in their product choices meaning they are more likely to be influenced by peer group preferences (particularly at a younger age) meaning early adopters technologies are less popular than those that are proven, transparent and consistent (such as online video over mobile variant). Similarly, boys favor more overt status symbols leading to the male dominance of Iphone ownership and general popularity of Flickr with males over females. Females generally opt more for peer group driven activities (photos on Facebook as opposed to Flickr) and Nokia over Apple Iphone. Boys Display Girls Connect
There are distinct differences between ethnic media usage and the “mainstream”. In this report we have included ethnic data from the US covering Hispanics, African Americans and Asians. However, it is not necessarily the qualitative nature of each ethnic grouping that is key, it is the very fact that they are minorities that means similar patterns can be found in other countries (e.g.. South Asians and Poles in the UK, Greeks in Australia, Brazilians in Japan, Turkish in Germany etc). The point is that minorities are by nature more aware of their social identity and place a higher premium on social inclusion for security. Hispanic youth for example use much more mobile music than their white peers because the music is a key tool to satisfy their need for social belonging. Similarly, Afro Caribbeans use of speakerphones in public is merely another manifestation of this social need to not only demonstrate belonging to a group but also do display strong barriers to exclusion to those outside. Ethnics, therefore, make ideal marketing beachheads because you have a tightly defined market based around more uniform values than those found in the wider market. Ethnics: Passionate Beachheads
Iphone owners are generally older and more technologically advanced than the average mobile owner. Your typical owner is aged 25+, technically advanced, male and in employment. We advise execs to treat data showing the “Iphone Affect” with caution; Iphone owners are heavily centralized in their consumer traits – early adopters, need for display significance etc and are therefore not indicative of the wider population. While the Iphone itself is conducive to opening up mobile data the effect is potentially far outweighed than the net result of skewing the mobile population sample with only early adopter consumers. Consequently, it is risky to assume that “once the Iphone becomes more widely adopted”, mobile data will enjoy a revival. Yes, video, music and mail will increase in usage but the uplift created by the second wave will be a fraction of that created when the first wave of early adopters got hold of the Iphone. Therefore, while the Iphone is undoubtedly a step in the right direction for the consumer’s experience of mobile the long term impact is more about the arrival of Apple and how that will impact the experience as opposed to the “unleashing” of mobile data’s potential on the wider market. Iphone Owners: Early Adopter Bubbles
There are two key groupings of gamers; the young social gamers who play to retain peer group bonds. These social gamers are mainly using handhelds and consoles to connect with peers but while they are active consumers of embedded games on handhelds they are reluctant to pay or go online for these tools. Then there are the Young Adults whose gaming takes them online where games divide between the majority which are casual gamers (e.g. genre is puzzle and gender mainly female) and the hardcore passionate gamers who frequent virtual worlds such as WoW. There is also a 3 rd group but they are not specifically gamers – these are the consumers who buy games to show off their handsets – namely Iphone or high end handset owners. Their usage is light and mainly focused on products with instant appeal (either classics or well known gaming dynasties as opposed to complicated and slow-burn games). Gamers: All Ages but differing styles
Music is a key social currency for youth, hence its endearing popularity from one generation to the next. Mobile music, therefore can offer different benefits to its consumer; the major use is as a tool of inclusion – a ringtone or ringback denotes to the observer that you are part of a certain group and believe in certain values to which they either identify or feel isolated from. The other use is as display; to show you were the latest to find this music or to show of your handset. As an inclusion tool, mobile music appeals mostly to those groups who have the greater demand for belonging – e.g. Teens and beachheads such as Ethnic minorities because the premium placed on the tools of inclusion by these consumers is higher. Despite the rise in paid music services, music is still dominated by file sharing; 80% of all music on the phone came from the PC whereas OTA downloads comprise less than 10% of the overall picture. Mobile Music: Male and Ethnics
Teens outrank in mobile internet usage across most countries studied when usage becomes free or flat rate. Usage then falls as they reach Student age with mobile being replaced by notebook usage and then again in Young Adulthood where office bound use comprises the largest proportion of regular activity. Teens favor mobile internet because a) they often share computers with adults so want their own privacy / access and b) they spend less time using the computer anyway. The second group of mobile internet consumers of note is the Young Adult Iphone owner. Although they comprise a small proportion of the overall mobile population, they are passionate consumers and very active in their exploration of new services (e.g. app store downloads, mobile search etc) Mobile Internet: Teens when it’s free
Mobile Video use is still too fragmented to gain an overall picture of how the consumer base will develop long term. What we know already is that flat rate and free are conducive to heavy usage by Teens, Boys and Ethnics. Teens in the US for example consume 4x more mobile video than older youths although their number is lower suggesting a heavy concentration around passionate consumers as opposed to the more apathetic mass. Older consumers (Young Adults) consume most regardless of plan and Students the least. Demographics differ from online too; online is more female, ethnically balanced and younger than mobile. Mobile Video: Online Female, Mobile Male. Young Adults and Ethnics dominate
Camera phones are popular with youth but not in the way originally conceived by the industry. Youth seek good camera functionality and take photos but they rarely send picture messages if at all. Photo shares break into two distinct groups; 1) Teen sharers (mainly girls) who take photos and keep them on their camera. Some will upload these photos to a social networking site such as Facebook or Bebo. Photo activity is mainly with peers and rarely alone. 2) Young Adult (male) photo displayers who use the camera to show off their handset and also to upload to Flickr/Facebook. They are more interested in photos of themselves and prefer to display them to the wider world as opposed to on the handset. Mobile Photo Sharing: Teen Sharers and Young Adult Displayers
Social media is perhaps the most evenly distributed digital habit found across both developed and developing countries. Canada and Brazil, for example, top the chart for social media penetration and Russia outranks Japan in 2008. Mobile social media, however, varies more markedly. Japan, US, Korea and the UK have the highest mobile social media usage levels. Facebook dominates mobile usage suggesting the average mobile social media consumer is within the core Facebook demographic i.e. 19-34 as opposed to earlier teens. We further estimate that as mobile internet usage is lower in Students than Young Adults, that mobile Facebook consumers will typically be 22-27 yrs old. While all ages of youth are involved in social media, what they do and with which sites varies significantly. Social Media: All ages, all genders, all ethnicities but roles vary
Contact For further information on report content, delivery, ordering and pricing please get in touch with me at Josh Dhaliwal Head of Client Services www.mobileYouth.org [email_address] +44(0) 207 386 3635
The Youth Marketing Workout 2009 New webinar to share ideas on youth marketing and trends http:// www.slideshare.net/mobileyouth/youth-marketing-trends-workout-webinar-1-presentation
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