#BizTrends2017: The mobile phenomenon

Gustav Goosen

There are very specific reasons for the rise and domination of mobile and if brands want to effectively engage on mobile they need to be familiar with them.

1. Increased user connectivity

For a while now South Africa’s mobile connections have outnumbered the population.  Current numbers show we have around 85 million of them which means multiple SIM cards per user and sometimes even multiple devices. Last year Cisco released their latest Visual Networking Index (VNI) Mobile Forecast which shows that mobile data traffic will increase nine-fold by 2020 which is a 55% annual compound growth rate. These sorts of numbers continue to set the tone for absolute mobile dominance in South Africa. Worth noting, the same forecast from Cisco predicts that nearly 75% of the mobile data usage by 2020 will be for mobile video.

2. Reduced data costs

Last year saw a much greater mindfulness of South Africa’s data costs vs the rest of Africa (our costs are much higher) and it gave rise to the widely publicised #datamustfall campaign.  Now whether our providers will pay attention and significantly drop data prices remains to be seen. However, the competition within the market is fierce and growing. Coupled with the growing consumer awareness, 2017 should see a rise in data fee reductions, which in turn will likely affect the growth of mobile usage.

3. Marked increase in free wi-fi

Again, as mentioned earlier, there is fierce competition for consumers’ connection budgets.  This has opened up opportunity for web and telco brands to extend their reach by offering public hotspots. Most of these connections are paid for but the growing demand has shown municipalities and local governments that there is a need and we are seeing a lot more public funded free Wi-Fi. This has of course given access to fast, free Wi-Fi to many South Africans who previously had to rely on expensive 2G and 3G connections. We are seeing more video views, online learning and a bigger engagement with apps, as a result.

4. Affordable smart mobile devices

Cisco’s forecast also shows some interesting results around the growth of the smartphone market. It tells us that the smart mobile data traffic will grow over 10-fold from 2015 to 2020 which is a compound annual growth rate of 61%. It also tells us that a smart device generates 15-times more traffic on an average than a non-smart device, opening up a world of opportunities for advertising campaigns that are geared for smart platforms. As the market has grown we have seen a sharp rise in the number of device brands and this competition has led to competitive pricing. Young South Africans in particular are very aware of the apps and services that smart devices offer (compared to non-smart ones) and are opting to spend their Rands the ‘smart’ way.

5. Improved app experiences

As the tech behind apps develop and user experiences are improved, so we will see the growth of the app economy push forward the growth of the mobile market. Apps as content delivery mechanisms have become an integral part of the mobile user experience and we are seeing leaps forward in app experiences.

It has become essential for advertisers to understand effective content distribution strategies. They are becoming more important than the marketing strategy behind them. Brands are moving towards speaking to consumers where they are, instead of constantly pushing consumers to their owned media. Content distribution will become about radiating outwards, meeting a consumer in their native environment, rather than brands executing a pull strategy to drive traffic and consumers back to their owned spaces. This is why it is so important for marketers and advertisers to understand the why and the how behind the growth in mobile.

I believe as the mobile phenomenon becomes more and more apparent and the understanding of the specific needs of mobile advertising and content grows, we will see a significant upswing in advertising budget allocation to it in 2017, more than likely at the expense of traditional advertising.