The 2011 Mobile Consumer Report

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 1

2011 Mobile Consumer Report

Consumers in motion Newton was only half right: Objects in motion tend to stay in motion, but objects at rest are increasingly becoming mobile. Thats the case, at least, when it comes to the world of todays mobile consumer. According to exclusive research from Experian Simmons, fully 29% of cell phone owners today believe that their cell phone will be the primary device for their entertainment needs, in the future. Furthermore, a recent report by J.P. Morgan estimates that U.S. mobile ad spending will nearly double in 2011 to $1.2 billion. Screen size and limitations on creative, the report says, present obstacles to mobile advertisers. These obstacles and opportunities make it more important than ever for marketers to understand the behaviors and mindset of the mobile consumer. In this report, we will: Measure the growth of cell phone use by age Segment mobile consumers by their use and attitudes towards mobile Trend consumer engagement in numerous mobile activities Report market share of mobile service providers Benchmark attitudes and behaviors towards mobile shopping Gauge consumer interest in mobile advertising Share details on the merger of mobile and social Explore the world of mobile apps For more information about the U.S. mobile consumer, contact your Experian Simmons account manager or email SimmonsMarketing@experian.com

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 2

Overview
227 million Americans own a cell phone: Over 9-in-10 adults, 7-in-10 teens and 1-in-5 kids Cell phone ownership among American adults stands at 91%, up from 72% in 2006. The vast majority of teens, too, have joined the mobile revolution, with 74% of those ages 12 to 17 porting a portable phone, up from 59% in 2006. Even tots are getting into the act, with a reported 22% of kids ages 6 to 11 owning a cell phone today. Among adults ages 22 to 24, the idea of not owning a cell is virtually unheard of, with an astounding 98% of consumers in this bracket reporting personally owning a cell phone. While cell ownership among adults age 65+ is the lowest of any adult segment, it is the fastest growing, having increased a relative 52% between 2006 and 2010. Despite the rise in youth owning cell phones, 90% of all mobile phone owners in the U.S. are adults, a rate unchanged since 2008. Percent of Americans that own a cell phone, by age
54%

65+
72%

82%

55 to 64
74%

89%

45 to 54
79%

92%

35 to 44
76%

95%

25 to 34
76%

94%

22 to 24
76%

98%

18 to 21
70%

94%

15 to 17
47%

82%

12 to 14 6 to 11* 0% 20%

2006
65%

2008 2010

22%

40%

60%

80%

100%

*Cell phone ownership among kids ages 6 to 11 began in 2008

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 3

Mobile Consumer Segments

From Mobirati to Pragmatic Adopters, understanding today's mobile consumers Through an extensive evaluation of the Simmons National Consumer Study measures targeting the behaviors and attitudes that consumers have toward mobile phones, Experian Simmons uncovered five distinct segments of mobile consumers. The Mobile Consumer Segmentation includes the following five segments: Mobirati: Representing the mobile generation, they have grown up with cell phones and can not imagine life without them. Cell phone devices are a central part of their everyday lives. Social Connectors: Communication is central in their lives, and cell phones allow them to keep up-to-date with friends and social events. Their phone is the bridge to their social world. Mobile Professionals: Smartphones help them keep up with their professional and personal life. Their phone has become their all-in-one device for communication and information needs. Pragmatic Adopters: Cell phones came to being during their adult years. They are now learning that there are other things they can do with mobile phones beyond just saying Hello. Basic Planners: They are not into cell phones or the world of technology. Use of cell phones is just for the basics. The cell phone is just another communication device for these consumers. Percent of adult cell phone owners classified into each mobile segment
Mobile Professionals

Mobirati

18%

20%

21%

22%

Basic Planners

20%

Social Connectors

Pragmatic Adopters
www.experian.com/simmons | 1 800 918 9064 2011 Mobile Consumer Report | Page 4

Mobile Consumer Segments

Profiles of mobile consumers Below we take a more focused look at the specific cell phones, monthly service plans and mobile activities common among members of each of the five Mobile Consumer segments. Pragmatic adopters, we see, spend the second lowest amount on their monthly cell phone bill ($89, on average), but their desire to learn about new capabilities available from new model phones makes them the most likely to switch providersand probably the amount of their monthly bill. Today, Pragmatic Adopters are snapping pictures with their phones, but tomorrow they might be uploading them to Facebook all while waiting in the supermarket checkout line. Profiles of the mobile consumer segments
Mobirati Social Connectors Pragmatic Adopters Typical phone HTC Blackberry iPhone Blackberry iPhone LG Motorola Nokia LG Typical plan Family Plan Prepaid Family Plan Contract Individual Plan Prepaid/Nocontract Average monthly bill $100 $108 $89 Likelihood to switch providers Far below average Above average Far above average Far below average Below average $115 $84 Business Plan Contract Individual Plan Prepaid/Nocontract iPhone HTC Blackberry Nokia Motorola Samsung Mobile Professionals Basic Planners

Typical mobile activities Download music Watch streaming video Video chat Business e-mail Video chat Record videos Take pictures Business e-mail Banking Personal e-mail Take pictures -

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 5

Mobile Consumer Segments

Hispanics almost twice as likely to be Mobirati Fully a third of Hispanic cell phone owners fall into the Mobirati mobile consumer segment. Thats the segment that grew up with cell phones and cant imagine life without them. The fact that only 18% of non-Hispanic consumers fall into this segment makes Hispanic mobile phone owners relatively 87% more likely than non-Hispanics to be classified as a Mobirati. At the other end of the mobile spectrum, Hispanic mobile phone owners are 40% less likely than non-Hispanics to be Basic Planners with only 13% of Hispanics classified as such vs. 22% of non-Hispanic mobile users. Likewise, Hispanics are 33% less likely than non-Hispanics to be Pragmatic Adopters, those consumers who are now learning about new capabilities of current model cell phones. Just 14% of Hispanic mobile phone users are Pragmatic Adopters versus 23% of non-Hispanics who are classified as such. Mobile segmentation classification by ethnicity
100% 18%

Mobile Professionals Basic Planners Pragmatic Adopters

18%

75%

13%

22%

14% 50% 22%

21%

Social Connectors
22%

25% 33%

Mobirati
18%

0% Hispanic Non-Hispanic

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 6

Mobile Service Providers

Verizon leads the way, but regional providers claim significant market share Verizon maintains its position as Americas number one cell phone service provider, with 32% of all adult mobile phone owners saying they are Verizon subscribers as of May 23, 2011. AT&T also has a sizable share of the market, with 28% of mobile phone owners subscribing to AT&T for cell service. Battling for third place are Sprint and T-Mobile, which respectively claim just 11% and 10% of the mobile market. Smaller, often regional, providers may individually have fewer subscribers, but combined, claim an impressive 22% of the total cellular market. Subscribers stay with provider longer; 59% with provider for four years or more Verizon and AT&T will almost certainly continue to dominate the market, especially given the fact that cell phone subscribers are increasingly staying with their provider for an extended period of time. As of May 23, 2011, the average cell phone subscriber had been with their provider for 3 years and 2 months, up from 2 years and 11 months observed at the beginning of 2008. Furthermore, 59% of cell phone subscribers say theyve been with their current provider for at least 4 years, up from 46% who reported the same in early 2008. Mobile service providers share of cell phone subscribers
Verizon 40% 35% 30% 25% 20% 15% 10% 5% 0% 1/21/2008 3/3/2008 4/14/2008 5/26/2008 7/7/2008 8/18/2008 9/29/2008 11/10/2008 12/22/2008 2/2/2009 3/16/2009 4/27/2009 6/8/2009 7/20/2009 8/31/2009 10/12/2009 11/23/2009 1/4/2010 2/15/2010 3/29/2010 5/10/2010 6/21/2010 8/2/2010 9/13/2010 10/25/2010 12/6/2010 1/17/2011 2/28/2011 4/11/2011 5/23/2011
www.experian.com/simmons | 1 800 918 9064 2011 Mobile Consumer Report | Page 7

AT&T

Sprint

T-Mobile

Other

Mobile activities
Over half of smartphone users access the web from their phone; 27% watch video Use of a cell phone to snap photos is routine, with 73% of all cell phone owners having snapped a pic in the last 30 days. More telling is that web surfing is also becoming commonplace among smartphone owners, 56% of whom now access the Internet with their phone in a given month. In fact, mobile online access among all cell phone owners has grown a relative 41% since 2008. Whats the next big thing? Video: In fact, 18% of all cell phone owners now watch video either streamed or uploaded to their phone, up from just 10% in 2008. Moreover, 27% of todays smartphone owners watch video on their mobile phone. Mobile activities done last 30 days*

Smartphone owners
Took photos Accessed the Internet Sent or received personal e-mail Listened to music/audio Took videos Played games Downloaded ringtones Maintained calendar Accessed GPS Sent or received business e-mail Downloaded music Paid bills Watched video streamed to phone Banking Watched video down/uploaded to phone Video chat 0% 20%

All cell owners

40%

60%

80%

100%

*Base: online adults; Smartphone owners include those using iPhone, Android, Palm, Blackberry or Windows Mobile operating systems
www.experian.com/simmons | 1 800 918 9064 2011 Mobile Consumer Report | Page 8

Mobile activities
Hispanic cell phone owners say extra features are more important than traditional ones Over a third of Hispanic mobile phone owners (35%) say that a phones extra features are more important to them than traditional ones while only 28% of non-Hispanic cell owners feel this way. This fact becomes evident when looking at the usage of mobile features by ethnicity. Hispanic mobile consumers are more likely than non-Hispanics to access the video and music features of their phones and less likely to send texts, check email and play games. In fact, Hispanic mobile consumers are relatively 40% more likely than non-Hispanics to use both their phones video messaging function, sometimes known as MMS, and the camcorder function. Likewise, they are relatively 24% more likely to download songs directly to their phone and 16% more likely to use the digital music player in their phone. Propensity to use mobile services/features last 30 days

Hispanic
Video messaging Camcorder phone Walkie-talkie/push-to-talk Song downloading MP3/Digital music player Instant messaging Video downloading/streaming Picture messaging Web browsing GPS/Navigation system Bluetooth Downloadable ringtones Games E-mail Camera/picture phone Text messaging -

Non-Hispanic

25 50 75 100 125 Index versus all cell phone owners

150

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 9

M-commerce
Mobile phones are quickly becoming an indispensible shopping tool Consumers better learn to shop with one hand because the other is increasingly likely to be holding a cell phone. According to the latest data from Experian Simmons, at least 33.3 million Americans now use their cell phones for shopping-related activities. The most common mobile shopping activity is researching products and comparing prices, which 15% of mobile phone owners now do every month. Eight percent of mobile phone owners say they scan barcodes with their phones, an activity that could also be related to gathering product information or checking prices. Meantime, 7% of mobile adults say they have actually shopped directly from their phone. The most common items consumers want to buy via their cell phones are: Tickets to movies/events; Travel services and Games/Toys.
16% 14% 12% 10% 8% 6% 4% 2% 0% Shopped Scanned barcodes/ optical codes Researched products/ compared prices

Mobile activities done last 30 days*

15%

7%

8%

Products/Services consumers are most interested in buying with their phone*

Product/Service interested in buying with mobile phone Tickets to movies/events Travel services Games/Toys Food Electronics
*Base: online adults
www.experian.com/simmons | 1 800 918 9064

% of mobile phone owners 23% 16% 15% 15% 15%

2011 Mobile Consumer Report | Page 10

M-commerce
Scan your customer base and connect Scanable mobile barcodes offer brand owners a new opportunity to directly connect with customers. Some brands, though, have a greater chance of leveraging this emerging technology than others. For instance, consumers who scan barcodes with their cell phone are almost three times more likely than the average U.S. adult to shop at Express and more than twice as likely to eat at Jamba Juice, Qdoba and P.F. Changs. PayPal users and Nissan drivers are also among the most likely to scan such codes, making these brands prime candidates to interact with their customers through mobile barcodes. Top indexing brands among consumers who scan mobile barcodes

Brand Express Jamba Juice PayPal Qdoba P.F. Changs Nissan Chipotle California Pizza Kitchen Red Robin Vans

Index 274 250 240 240 238 233 232 231 229 229

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 11

M-commerce
Consumers want to use their phones to make a purchase Beyond using their phones in the aisles of a store, consumers want to use their phones all the way through the checkout process. As of May 23, 2011, 15% of all adult mobile phone owners were interested in a service that would allow them to make purchases in a store, up from 10% in February 2009. Smartphone owners are way ahead of the curve though. For instance, 30% of adult iPhone owners now say they want to use their phones to pay for purchases in stores compared with just 12% of non-iPhone owners. Top retailers to find consumers interested in using their phones to pay
% of shoppers who are mobile phone owners interested in making purchases using their phone 35% 31% 29% 27% 26% 26% 26% 26% 25% 25%

Store Off 5th Loehmanns bebe Neiman-Marcus Nordstrom Rack Nine West Ralph Lauren Abercrombie & Fitch Brooks Brothers Saks Fifth Avenue

Tip: To gauge customer interest in interacting with your brand via smartphone technology, try engaging them with scanable barcodes or mobile-optimized URLs at the checkout and in key locations within your store. If usage is high, find out how to take it to the next level.

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 12

Mobile Advertising
Would-be mobile payers are receptive to mobile ads Retailers uncomfortable about the high front-end costs of implementing a mobile payment system should look on the bright side: Cell phone owners who are interested in making purchases with their phone are also more open to mobile advertising, especially if in exchange for something of value. Specifically, 23% of cell owners interested in making purchases with their phone also say they are interested in receiving advertisements on my cell phone, versus just 5% of all cell phone owners who say the same. Furthermore, an impressive 52% of cell owners interested in making purchases with their phone are also willing to accept advertisements sent to my cell phone if I were to receive something of value in exchange, versus just 12 percent of all cell phone owners who say the same. Can you hear me now? Traditional advertising isnt for everyone, but mobile offers marketers a new avenue for connecting with those who are less receptive to advertising via other media. Nationwide, Experian Simmons identifies 36% of the adult population as having a below average receptivity to advertising. These consumers are less inclined to be interested in advertising and also less likely to let advertisements influence their purchase decisions. An even higher share of the Mobirati Mobile Consumer segment fall into this consumer group. In fact, fully 54% of Mobirati are less interested in advertising than the average U.S. adult. Interestingly, over a quarter of those less ad receptive Mobirati (28%) are actually open to receiving mobile ads. Furthermore, Mobirati is the mobile segment most likely to switch brands, often representing an ideal audience for advertisers who can break through to this group. Advertising receptivity by mobile consumer segments

Below average ad receptivity

300 250 Index 200 150 100 50 0 Mobirati 150 97 93 262

Above average mobile ad receptivity*

70

91

116 81 60 34 Basic Planners

Mobile Social Professionals Connectors

Pragmatic Adopters

*Mobile ad receptive adults agree to at least one of the following: Open to receiving advertising on their phone; Likely to purchase products they see advertised on their phone; Accept advertising on phone in exchange for something of value.
www.experian.com/simmons | 1 800 918 9064 2011 Mobile Consumer Report | Page 13

Mobile Advertising
Hispanic mobile consumers more than twice as interested in mobile advertising When it comes to opportunities for connecting with consumers via mobile devices, Hispanics should register high on marketers radar. Thats because Hispanic cell phone owners are more than twice as likely as non-Hispanic mobile consumers to say they are interested in receiving advertisements on their phone and also that they are likely to buy products that they see advertised on their phone. Propensity to agree with mobile advertising statements (Index)
Agree: I am interested in receiving advertisements on my cell phone I am likely to purchase products I see advertised on my cell phone I am willing to accept advertisements on my cell phone in exchange for something of value I am interested in cell phone for making purchases in stores Hispanic 210 198 Non-Hispanic 82 84

126

96

125

96

Regardless of language preference, Hispanics are loyal to Spanish-language advertisers The vast majority of Hispanic cell phone owners (86%) speak at lest some Spanish, making it important for advertisers to incorporate Spanish into campaigns targeting this group. While those who speak Spanish predominantly are most receptive to Spanish adverting, bilingual Hispanic cell phone owners also appreciate and remember products advertised in Spanish. Percent who agree with Spanish-language advertising statements
Agree: I remember more about or pay more attention to products/ services that are advertised in Spanish I am much more loyal towards companies that show appreciation for our culture by advertising in Spanish When I hear a company advertise in Spanish, it makes me feel like they respect my heritage and want my business Bilingual 29% 43% 46% Spanishdominant 53% 52% 55%

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 14

Mobile is Social
The worlds of mobile and social are becoming ever intertwined Monthly visits to social networking sites have risen to 76% of the online adult population today, up from 54% in 2008, a relative increase of 42 percent. During that same time, the share of social networkers accessing their account from a mobile phone grew at an even faster clip. Today, 20% of social networkers access their account from a cell phone each month, up from just 11% who did so in 2008, a relative increase of 85%. Social networkers are also increasingly uploading pics and videos to their profile directly from their phone. During a typical month, 14% of social networkers now upload photos and videos to their social networking account or other photo sharing sites from their cell phone, up from 10% who uploaded pics and videos in 2008. Younger social networkers are notably more likely to interact with social networking sites from a mobile phone. Mobile activities done by social networkers in the last 30 days, by age*

All
35% 30% 25% 20% 15% 10% 5% 0% 14% 20% 14%

18-34

35-49

50+

31% 20%

19% 9%

7% Uploaded pictures or vides to social networking or photo sharing sites

Accessed social networking account

Tip: Make sure your companys website is optimized for mobile web browsers and give your customers ways to interact with your business via social channels like Foursquare or Facebook Places.

*Base: online adults

www.experian.com/simmons | 1 800 918 9064 2011 Mobile Consumer Report | Page 15

Mobile is Social
Scan your customer base and connect Experian Simmons reports that 60% of all online adults today have shown support for a company, brand, group, etc. on a social networking site. Expanding mobile access to such networks means consumers can share their feelings towards a brand and influence their social network within minutes of a good (or bad) experience. Beauty brands like Got2B, M.A.C., Bed Head and Bobbi Brown are all consumer brands whose users are notably more likely than the average adult to supporter brands on social sites. Top indexing brands among consumers who support companies/groups via social networks

Brand Got2B First Response San Pellegrino Audiovox M.A.C. Bed Head iPod Guess Alcon Bobbi Brown

Index 184 182 182 181 180 178 176 176 175 175

Tip: Find out if your customers are supporters of brands online and develop a compelling way to engage them via social media. Also, make sure you have a way to respond to negative feedback in a quick and effective way.

www.experian.com/simmons | 1 800 918 9064

2011 Mobile Consumer Report | Page 16

Mobile (App)etite
20.7 million cell phone owners have downloaded an app in the last month Mobile apps enable consumers to make the most of their phones, and mobile consumers are downloading apps more than ever. Today, 16% of cell phone owners have downloaded a mobile app within the last 30 days, up from 11% who did in 2008. The vast majority of these app downloaders (87%) have at some point downloaded a free app, but 58% report having previously paid for an one. Forty-six percent of downloaders paid between $0.99 and $2.99 for a single app, but only 4% paid $10 or more. Music apps are the most common, with fully 97% of app downloaders having at some point downloaded such an app versus 43% who have downloaded a game app. Price ever paid for a mobile application by recent downloaders

87%

46% 20%
Free $0.99 - $2.99 $3.00 - $9.99

4%
$10.00+

Top mobile app types downloaded by recent downloaders

Type of mobile app downloaded Music Games Entertainment Weather Social networking Sports Communication
*Base: online adults
www.experian.com/simmons | 1 800 918 9064 2011 Mobile Consumer Report | Page 17

% 97% 43% 42% 33% 29% 26% 25%

Type of mobile app downloaded Utilities News Reference Travel Shopping Finance Food/Health

% 23% 23% 21% 20% 19% 19% 9%

 2011 Experian Information Solutions, Inc. All rights reserved Experian Simmons 1271 Avenue of the Americas 45th Floor New York, NY 10020 www.experian.com/simmons 1 800 918 9064 Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners.