Is The Smartphone Market Oversaturated?

Word on the street for marketers, at least in the United States, is that the smartphone market is on the brink of becoming supersaturated, that it is ready to plateau as far as growth and sales are concerned. What do the statistics say?

Here in the United States the Pew Center for Research recently discovered that a full 95% of adult citizens possess a mobile phone, and that 77% of those people use a smartphone. Looking at these statistics from a marketing standpoint, it’s clear that from this group alone there are still a good 17% who have not yet upgraded to a smartphone — and thus represent a potential and very promising marketing opportunity. Pew research indicates that this seventeen percentile are above the age of fifty — an admittedly hard sell when it comes to upgrading. But with some special niche marketing strategy it is certainly doable.

On the other hand, data reported by Pew Research and other researchers indicates that globally Internet penetration is now at 50%, or better. This obviously makes it challenging to find a vibrant, untapped market to work with. But to call 50% penetration ‘oversaturation’ or anything like it is probably a bit too pessimistic.

True, there are going to be areas and demographics among the nations of the world that will remain resistant to Internet usage. But surely not the full 50% that currently is without it? The trick here for marketers is going to be figuring out how to reach those pockets of sales potential that exist in mostly Third World countries where the Internet is still a novelty, or under serious governmental control — as in North Korea.

The Good News

The good news here is that, according to smartphone marketing mavens, those now just coming online with mobile devices will most like start with a smartphone, and not have to be upsold at all.

And there is more positive spin from recent research and study. Worldwide, hours spent on digital media are continuing to grow for all demographics, including those over the age of 50. Despite warnings from mental health experts about the possibility of actual social media addiction, especially in the young, the time spent looking at social media continues expand, not contract.

And most of that increasing time, nearly all of it, is through the use of smartphones and other mobile devices. In other words, desktop computers, for all intents and purposes, have plateaued when it comes to usage time. Only mobile devices are seeing any increase — so marketers take note!

Easily Accessible 

Ad revenue in the digital sector, experts agree, will increasingly stem from mobile devices such as smartphone and smartwatches. Marketers and advertisers need to make sure that all their platforms and venues are easily accessed by mobile devices and that they can be scanned, understood, and interacted with a minimum of complexity or confusion. This is especially the case when it comes to online purchases. Online spending via mobile devices is in an explosive growth pattern, and those companies that do not make it convenient for customers to buy from their mobile devices, such as a smartphone, are shooting themselves in the foot.

Although online shopping can be done on computers, smartphones offer more convenience due to their portability. This has further been boosted by the ease of accessing money via smartphones. For instance, a smartphone user can easily access the money in their bank account through mobile banking.

These loans are also ideal for majority of smartphone users, teenagers and young adults, who have low credit scores. With such ease of access to cash and high credit limits, smartphone users are more likely to make online purchases. It is therefore a no-brainer that marketing strategies that target smartphone users have a high ROI. In future, the profitability can only increase as smartphone users adopt mobile banking and lending on a larger scale.

Historically Speaking

The history of mass entertainment in the United States is also the history of mass advertising. In American colonial times the two most prevalent forms of mass entertainment were newspapers and almanacs. Every tavern, inn, and most well-to-do households subscribed to at least one newspaper. Farmers cherished their annual almanac for the planting dates it gave for everything from lima beans to cotton. And both venues were virtually swamped with advertising. Any business that did not place an ad in either a newspaper or an almanac was not to be taken seriously.

Fast forward to 1925, when the RCA Corporation began selling radios on the installment plan — so much down and so much a month and anyone could own a radio. Movie theaters piped in popular radio programs such as Amos and Andy for their patrons between movies — otherwise attendance would have plummeted. And advertisers fell all over themselves to plug their products on the air — so much so that the federal government stepped in in 1934, creating the FCC, to control how much commercial content the airwaves could broadcast.

Then along came television — and by 1950 nearly one in every four homes in America had a television set. The ubiquitous boob tube reigned supreme, when it came to mass marketing. Every major company in the United States hired an advertising agency to create commercials that would air during Howdy Doody, The Lone Ranger, Dragnet, Gunsmoke, Laugh In, and The Simpsons. Not to mention the Super Bowl!

But 20 years ago the digital age came into the advertising picture in a sudden and startling manner. Newspapers lost a major part of their advertising revenue, as advertisers switched their print ads to digital ads. But this revolution barely touched television advertising income initially.

Advertisers were very slow and hesitant to drop their television sponsorships — all the statistics and their common sense told marketers and advertisers that nothing could ever beat the impact of a quality TV commercial. And that remained the accepted wisdom for many years. Although savvy advertisers hedged their bets by slowly increasing their overall digital advertising budgets as the years went by.

The Year of Miracles

But recently confirmed statistics now show that for digital advertising, 2017 has become the ‘annus mirabilis’ — the year of miracles; both the Internet Advertising Bureau and the Advertising Revenue Report claim that in 2017 the complete digital ad budget in the United States was more than a staggering 88 billion dollars. And this figure surpasses the 2017 advertising budget for television, both broadcast and cable.

And out of that $88 billion for digital advertising, roughly $48 billion went for mobile digital ads. And it’s a little bit interesting to see how often history repeats itself in the marketing world. Only a few years ago most dedicated digital marketers were still uncertain and hesitant about earmarking a large chunk of their advertising budget specifically for mobile online devices. The thinking was that the technology for them was still pretty far in the future, and that consumers would not be purchasing very much via their mobile devices.

That conservative mindset is now thoroughly out-of-date. The numbers don’t lie; any advertiser who wants the most bang for their cyber buck is going mobile; and growing mobile.