In 2018, 66% of individuals in 52 key countries will own a smartphone, up from 63% in 2017 and 58% in 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% in the most advanced markets. The number of smartphone owners will increase by 7% year on year in 2018, compared to 10% growth in 2017, 14% in 2016 and 21% 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. We predict that five markets will have smartphone penetration above 90% in 2018: the Netherlands (94%), Taiwan (93%), Hong Kong (92%), Norway and Ireland (each at 91%). 11 markets will have penetration levels between 80% and 90%, all of them in Western Europe and Asia Pacific with the exception of Israel, where penetration will be 86%.
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% in 2016 and forecast to increase to 89% in 2019.
In Australia, nearly every one under 50 uses mobile to go online with a 90% penetration rates. For the older demographics it drops: for ages 50-64 it is 61% and for ages 65+ it is 33%.
Tablet penetration stabilising at about 20%
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 we estimate their penetration at just 4.8% this year, compared to 85.4% for smartphones. Tablet penetration is even declining in Thailand.
Tablet ownership varies widely across the 52 countries in this report; it exceeds 50% in 12 markets, and is lower than 10% in seven. Tablet ownership is most common in the Netherlands (at 74% penetration is year), Australia (66%) and Ireland (65%).
Globally, we estimate tablet penetration at 18.7% this year, up slightly from 17.8% in 2016. It appears to be stabilising at about 20%: we forecast penetration levels of 19.5% in 2018 and 20.1% 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% of time spent using the internet in 2018, up from 70% in 2017 and 65% in 2016. Mobile internet use has doubled since 2011, when it accounted for 36% of all internet use. By 2019, we expect it to account for 76%.
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% of internet use coming from mobile devices this year, followed by Italy (78%), China and the US (each at 77%) and India (73%).
59% of internet advertising expenditure will be mobile in 2018
As we have documented in our quarterly Advertising Expenditure Forecasts, 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. We estimate that 53% of all internet ad spend will go to ads viewed on mobile devices in 2017, and forecast that proportion to rise to 59% in 2018 and 62% in 2019. In 2019 mobile ad spend will total US$156 billion, and account for 26% of ad spend across all media.
Mobile advertising expenditure in Australia has grown by +33% 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% in 2017. Of the $2,605 million of mobile advertising expenditure in the 12 months to June 2017, 46% was attributed to Mobile Search and 54% to Mobile Display, and 70% was attributed to smartphones and 30% to tablets.
Says Nickie Scriven, CEO, Zenith Australia: “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.
“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.”
Says Jonathan Barnard, head of forecasting and director of global intelligence, Zenith: “For most consumers and advertisers, the mobile internet is now the normal internet. 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.”
Says Vittorio Bonori, global vbrand president, Zenith: “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.”