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2014 - The Year in Review

David Murphy

Readers, if you’ve been with us all year you will know what a breathtaking 12 months it’s been in the mobile marketing world, and now that it’s all but over, it’s time for us to look back on the highlights in our regular month-by-month, end of year review, compiled by David Murphy, Alex Spencer and Tim Maytom.

Nest-Connected-Thermostat-M2M-Internet-of-ThingsJanuary
There was good news for mobile watchers from the off as figures from John Lewis revealed that three quarters of its website traffic on Christmas Day came from mobiles and tablets. A couple of months earlier, the retailer had named 5pm on Christmas Day as the moment when mobile traffic to its website would overtake desktop for the first time. More figures from Flurry revealed that app downloads on Christmas Day were 91 per cent higher than an average day in the first three weeks of December.

The obsession with mobile continued into the New Year, with figures from O2 showing
a 62 per cent increase in data usage over the new year period compared to the previous year, with a 70 per cent increase in average daily data use. New Year’s Day 2014 saw a 58 per cent increase in data usage compared to New Year’s Day 2013, while O2 customers also sent more than 385m text messages, and made over 200m phone calls, over the new year period.

Apple confirmed that December 2013 was the most successful month in the history of its App Store, with $1bn (£635m) in revenues and almost 3bn downloads. It also revealed that total spend in the App Store in 2013 added up to $10bn.

Keeping things in perspective, however, the analyst Gartner cautioned that less than 0.01 per cent of consumer mobile apps will be considered a financial success by their developers between now and the end of 2018. It also pointed out that around 90 per cent of paid-for apps receive less than 500 downloads, and less than $1,250 in revenues, each day. The analyst predicted that, by 2017, free apps would account for 94.5 per cent of downloads.

And Apple was itself ordered to refund American parents ‘at least’ $32.5m (£19.8m) for in-app purchases made by their children without their ‘informed consent’. ‘Tens of thousands’ of complaints had been levelled at the company since early 2011, the Federal Trade Commission said, with many claiming thousands of dollars in charges they didn’t know about. One consumer said her daughter had spent $2,600 in the app Tap Pet Hotel.

Meanwhile, the Consumer Electronics Show kicked off in Las Vegas, with even more of a mobile feel to it than the previous year, when tablets dominated proceedings. This time round, it was all about wearables, with Sony and Epson launching smart wristbands (the SmartBand and Pulsense respectively) while Epson also pitched in with some smart glasses, the Moverio BT-200, and Pebble brought its much-hyped Pebble Steel smartwatch to market, announcing app tie-ups with Pandora, ESPN and Mercedes-Benz in the process.

Google got the 2014 buying spree underway with its $3.2bn acquisition of Nest, best known for its smart thermostat. If anyone out there didn’t believe the Internet of Things (IoT) was going to be a big deal, this deal confirmed that it is.

On the same day, Facebook crossed Branch Media off its shopping list as it bought the social product creator for an undisclosed sum rumoured to be round the $15m mark. And still on the same day, Qualcomm snapped up visual recognition company Kooaba to strengthen its Vuforia image recognition and augmented reality platform. Later in the month, Google went shopping again, this time spending a reported $500m to acquire Artificial Intelligence company, DeepMind.

Sky launched its AdSmart, targeted TV advertising service which delivers ads based on viewers’ location and profile. AdSmart stores a library of ads on the Sky+ set-top box which are inserted into live ad breaks based on the household’s postcode and demographic information from third-party data providers.

And the gloves came off in the taxi wars as GetTaxi pointed the finger at rival service Uber as being behind a denial-of-service attack on its taxi booking app in New York the previous week.

According to GetTaxi – which operates as Gett in New York – it saw nearly two hundred fake bookings, which were cancelled once the driver was dispatched or had arrived to make a pickup, from around a dozen people, whom it believes are Uber employees. After the bookings were cancelled, the involved drivers received a SMS message from Uber to leave Gett and join its service instead.

And as the month drew to a close, Facebook launched its Custom Audiences offering, enabling Facebook advertisers to retarget ads based on online or in-app activity to reach users who looked at their site or app but never got as far as purchase.

The company also released its Q4 2013 results, which revealed that mobile ads accounted for 53 per cent of total ad revenues during the quarter. Overall, mobile ads generated $1.25bn for Facebook, the company’s first billion-dollar mobile quarter. To celebrate, Facebook also revealed that its CEO Mark Zuckerberg would make his Mobile World Congress debut, delivering a keynote at the event in February.

Google also enjoyed a decent quarter, reporting net profits for its Q3 2013 of $3.38bn, 17 per cent up year-on-year. The company also announced plans to sell its Motorola handset division to Lenovo, for $2.9bn, something of a write-down on the $12.5bn it had paid for it just two years earlier…

VirginFebruary
IPOs were in the news as first, digital ad exchange Rubicon Project filed for a $100m IPO, while Candy Crush developer King Digital Entertainment also filed for its own IPO. King’s stock eventually started trading on 26 March, priced at $22.50, with the offering raising just under $500m.

Cancer Research UK launched its Play to Cure: Genes in Space, mobile game, which enables those playing it to help find a cure for cancer by plotting a course through a graph based on real genetic data, and then guiding a virtual spaceship through a level generated from this data. The gameplay identifies areas for Cancer Research’s scientists to focus on. The game went on to win an Award in the 2014 Effective Mobile Marketing Awards.

Microsoft named Satya Nadella as its new CEO following Steve Ballmer's departure, while Twitter announced Q4 2013 revenues of $243m, more than twice the year-ago quarter. Ad revenues accounted for $220m of the total, of which 75 per cent, or $165, came from mobile ads.

NET-A-PORTER rolled out a women's print magazine that enables readers to scan clothes using the company's app and then buy them direct from the fashion website, while budget airline Ryanair said it would allow its passengers to use tablets, smartphones and other electronic devices at all times while on board its planes, as long as they are in flight mode.

Staying with the airline theme, Virgin Atlantic launched a Google Glass trial at Heathrow Airport. Passengers flying from Heathrow with the airline's Upper Class service were greeted and checked in by staff wearing the device as part of an attempt to provide a more personalised service. Glass was used to provide updates on the customer's flight, as well as local weather and events at their destination, and to enable staff to automatically translate any foreign-language information.

Trials were also on the menu at EAT, which was unveiled as the launch partner for Weve’s location-based loyalty platform Pouch, which went live in a closed beta trial on Android on 17 February. The coffee shop tested the Pouch app, which uses bluetooth beacons to send opted-in push notifications with offers and product-related content, in three stores across London. The small-scale test with 100 participants grew to include 10,000 people by the end of April.

Japanese eCommerce firm Rakuten bought OTT service Viber, which offers free messaging and VOIP calls through its apps, for $900m. But if that looked like a good day at the office for Viber, imagine how the team at WhatsApp must have felt a couple of weeks later when they were bought by Facebook for a cool $16bn, rising to $19bn when additional stock options are factored in.

WhatsApp’s founders pledged that the app would remain app free and so far, they’ve been true to their word. The logic behind the deal – and specifically the price – was hard for many to fathom, but Facebook CEO Mark Zuckerberg pointed to the fact that the app was on track to hit a billion users, and, given that WhatsApp is particularly popular in developing markets, the acquisition would help Facebook in its Internet.org project to deliver internet access to the two thirds of the world currently without it. Surely that’s worth $19bn of anyone’s money…

If mobile operators were feeling slightly uneasy about the Facebook/WhatsApp tie up, things were about to get a whole lot worse when at Mobile World Congress, WhatsApp CEO and co-founder Jan Koum revealed the company’s plan to launch voice calls. Originally slated for Q2 2014, the launch was eventually put back to Q1 2015.

Also at MWC, Zuckerberg gave his keynote address, telling delegates that WhatsApp was worth more than the $19bn Facebook was paying for it, and also hinting that Facebook was not eyeing up any further acquisitions. “After buying a company for $16bn, you’re probably done for a while,” he said.

And amid all the other noise coming out of Barcelona, Dutch start-up EAZE introduced its 'Nod To Pay' service- a Bitcoin enabled wallet that works on Google Glass. To activate Nod To Pay, a Google Glass user gives the command “OK Glass, make a payment”. Glass then scans the QR code of any Bitcoin-enabled Point Of Sale (POS) application. The transaction details appear on the Glass display. The user then nods twice to confirm the payment. You couldn’t make it up…

OculusMarch
Apple took the wraps off its in-car version of iOS, CarPlay, at the Geneva Motor Show, unveiling Ferrari, Mercedes-Benz and Volvo as the first three car manufacturers to premiere CarPlay, with a raft of others set to follow. CarPlay enables iPhone users to make calls, use Maps, listen to music and access messages via Siri voice control or touch.

Later in the month, Google would have OS news of its own, as it launched the developer preview of Android Wear, a version of its OS designed specifically for wearable devices. The OS enables users to control wearable devices with voice commands, and receive notifications from paired smartphones.

Figures from Gartner revealed a 68 per cent year-on-year increase in global tablet sales in 2013, hitting a total of 195.4m units. Gartner said the growth was driven by the low-end, smaller-screen tablet market. Most significantly, Android took the majority market share for the first time, with devices running Google’s OS accounting for 61.9 per cent of all tablets sold. iPad’s market share fell from 54.8 per cent in 2012, to 36 per cent in 2013.

John Lewis became the latest High Street brand to tap into the tech start-up scene as it launched its JLAB technology incubator project, as part of its 150th anniversary celebrations. JLAB, launched in partnership with tech entrepreneur Stuart Marks, with the aim of finding five start-ups with ideas that could 'shape the shopping experience of the future’. Those five turned out to be Localz, Musaic, Space Designed, Tap2Connect and Viewsy, with Localz unveiled in September as the winner of a £100,000 investment and the chance to trial its tech with the retailer.

Gambling operator Paddy Power reported mobile revenues of £175m for 2013, 73 per cent up on the previous year. Mobile accounted for 45 per cent of total online revenues and 28 per cent of revenues overall. Meanwhile, Argos revealed that mobile transactions were responsible for 18 per cent of its total sales, and Twitter was also singing the praises of mobile as it reported a year-on-year increase in ad revenues to $594.5m, with mobile accounting for over 75 per cent of the total. There was also positive news from Instagram, as it signed its first advertising deal, pulling in a reported $100m from Omnicom Media Group. Later the same month, Omnicom would acquire mobile marketing firm Mobile5.

The Payments Council unveiled its Paym mobile money service in the UK, enabling customers of participating banks to transfer money using nothing more than the recipient’s mobile number. The service launched with nine banks and building societies signed up, and more due to follow by the end of the year.

Less encouragingly for the finance sector, an IAB study revealed that 12 of the UK's top 50 finance brands lacked any mobile presence. 26 of the 50 had an app, while 34 had a mobile-optimised site. The IAB picked out NatWest, Bupa, and Hiscox as top performers - each had a mobile-optimised site as well as separate mobile and tablet apps for both iOS and Android.

The Swan Centre in Eastleigh, Hampshire, became the UK's first shopping centre to deploy beacons to track footfall and deliver offers. The tech was provided by TagPoints, since acquired by SmartFocus. Meanwhile, another company with designs on the future of retail, mobile marketing firm 2ergo, sold its mobile coupon and loyalty business to Eagle Eye Solutions for £4.5m after failing to successfully commercialise its podifi mobile wallet offering. Following the sale, 2ergo would change its name to that of one of its subsidiaries, Broca and become an investment business, with an initial focus on the TMT (Technology, Mobile, Telecoms) sector.

Staying with cutting-edge tech, Tesco became the first retailer to experiment with the Oculus Rift virtual reality headset. Tesco worked with virtual reality specialist Figure Digital to create a version of its store on the Oculus platform. That news would pale into insignificance just two days later, however, when we revealed that Oculus had sold to Facebook for a cool $2bn, perhaps the start of an attempt by the social networking giant to create a world where you can actually live your whole life on Facebook.

And while the Facebook bandwagon rolled on, for the once-mighty Microsoft, there was a reality c