In 2018, 66 per cent of individuals in 52 key countries (see bottom of article) will own a smartphone, up from 63 per cent in 2017 and 58 per centin 2016, according to Zenith’s Mobile Advertising Forecasts 2017, published today.
The rapid expansion of smartphone ownership across the world, which has transformed the way that advertisers communicate with consumers, is slowing down as penetration reaches 80-90 per centin the most advanced markets. The number of smartphone owners will increase by seven per cent year on year in 2018, compared to 10 per cent growth in 2017, 14 per cent in 2016 and 21 per cent in 2015.
The spread of smartphones and other mobile devices is increasing the number of contacts between brands and consumers, by giving consumers new opportunities to connect to media content wherever they are, at any time in the day. Some of these contacts take the form of paid advertising in third-party content, but mobile technology is also enabling broader brand experiences, such as branded content and social media engagement.
Western Europe and Asia Pacific continue to lead the world in smartphone ownership. It is predicted that five markets will have smartphone penetration above 90 per cent in 2018: the Netherlands (94 per cent), Taiwan (93 per cent), Hong Kong (92 per cent), Norway and Ireland (each at 91 per cent). Eleven markets will have penetration levels between 80 per cent and 90 per cent, all of them in Western Europe and Asia Pacific with the exception of Israel, where penetration will be 86 per cent.
The country with the highest number of smartphone users will be China, with 1.3 billion users, followed by India, with 530 million users. The US will be third, with 229 million users.
Australia continues to be one of the leading smartphone markets globally, with penetration at 83 per cent in 2016 and forecast to increase to 89 per cent in 2019.
In Australia, nearly every one under 50 uses mobile to go online with a 90 per cent penetration rates. For the older demographics it drops: for ages 50-64 it is 61 per cent and for ages 65-plus it is 33 per cent.
Tablet penetration stabilising at about 20 per cent
Tablet ownership is much less common than smartphone ownership, partly because they are more likely to be shared within households, and partly because consumers in some markets prefer to use larger smartphones instead. Tablets have not caught on at all in China, where it is estimated their penetration at just 4.8 per cent this year, compared to 85.4 per cent for smartphones. Tablet penetration is even declining in Thailand.
Tablet ownership varies widely across the 52 countries in this report; it exceeds 50 per cent in 12 markets, and is lower than 10 per cent in seven. Tablet ownership is most common in the Netherlands (at 74 per cent penetration is year), Australia (66 per cent) and Ireland (65 per cent).
Globally, it is estimated tablet penetration at 18.7 per cent this year, up slightly from 17.8 per cent in 2016. It appears to be stabilising at about 20 per cent: the forecasts penetration levels of 19.5 per cent in 2018 and 20.1 per cent in 2019.
Mobile devices to account for 73% of internet consumption in 2018
Mobile devices (including both smartphones and tablets) are now the primary means of accessing the internet for most users, and will account for 73 per cent of time spent using the internet in 2018, up from 70 per cent in 2017 and 65 per cent in 2016. Mobile internet use has doubled since 2011, when it accounted for 36 per cent of all internet use. By 2019, we expect it to account for 76 per cent.
In Australia, time spent with mobile internet has increased two-fold from 2013 (50.9 minutes) to 2016 (104.7 minutes) and is forecast to rise to 130.9 minutes in 2019. Mobile internet time has replaced other media as the lead source of news and entertainment as desktop, TV, newspapers and magazine time spent has declined. The proliferation of larger free data limits, better smartphone devices and popularity of apps has driven the increase in mobile time.
The markets where mobile devices have the highest shares of internet use are geographically diverse. Spain is top, with an estimated 81 per cent of internet use coming from mobile devices this year, followed by Italy (78 per cent), China and the US (each at 77 per cent) and India (73 per cent).
Some 59 per cent of internet advertising expenditure will be mobile in 2018
The amount of money spent on internet ads going to mobile ads has overtaken the amount spent on desktop ads for the first time this year. The report estimates that 53 per cent of all internet ad spend will go to ads viewed on mobile devices in 2017, and forecast that proportion to rise to 59 per cent in 2018 and 62 per cent in 2019. In 2019 mobile ad spend will total $US156 billion, and account for 26 per cent of ad spend across all media.
Mobile advertising expenditure in Australia has grown by 33 per cent on 2016 to a total of $2.6 billion in financial year 2017. To provide context, total online advertising expenditure, which includes all platforms and formats, grew only 11.7 per cent in 2017. Of the $2,605 million of mobile advertising expenditure in the 12 months to June 2017, 46 per cent was attributed to mobile search and 54 per cent to mobile display, and 70 per cent was attributed to smartphones and 30 per cent to tablets.
“We expect smartphone usage to grow further driven by four key technological advancements: the Internet of Things, voice assistants, virtual and augmented reality and payments,” Zenith Australia CEO Nickie Scriven said.
“The Internet of Things will ensure the integration of smartphones into everyday life. As voice assistants such as Siri and Google Assistant grow smarter and understand natural language and context, search and content discovery will be driven by voice rather than by typed keywords.
“The battle between Facebook and Google to become the more popular VR platform on phones will drive down prices and make headsets more affordable, opening up mobile VR to mass adoption, which will in turn present opportunities for branded content and in-stream advertising.
“Mobile payments will also grow but at a slower pace. Australia is yet to catch up with some other Asian countries where mobile payments are more commonplace through SMS, tap and pay, near field communication or via messaging apps,” she said.
“For most consumers and advertisers, the mobile internet is now the normal internet,” said Jonathan Barnard, Zenith’s Head of Forecasting and Director of Global Intelligence. “The ownership of mobile devices is beginning to saturate in some markets, but there’s plenty of room for further growth across the rest of the world.”
Vittorio Bonori, Zenith’s global brand president, said: “Because the internet is now mobile, brands have the opportunity to use it to communicate to consumers during more of their lives – when they are shopping, socialising and travelling as well as when at their desk. By reaching consumers at the right occasions with tailored messages, brands can guide them through the consumer journey more effectively.”
*The 52 countries included in this report are Australia, Argentina, Austria, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Canada, China, Colombia, Czech Republic, Denmark, Ecuador, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Japan, Latvia, Lithuania, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Peru, Philippines, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Ukraine, the UK and the USA, representing 65% of the world’s population.