Advertising plays a critical role in triggering the purchase of smartphones, as acknowledged by 58 percent of respondents from a survey conducted across seven markets globally. Facebook advertising, in particular, was most frequently cited as the most influential media in making or changing decisions around smartphone purchases in four key markets – India, Indonesia, UK and UAE.
The study conducted by GfK was commissioned by Facebook to gain an in-depth understanding of smartphone purchasers and the role that advertising plays in the consumer journey. Over 10,500 smartphone users were surveyed across seven markets – India, Indonesia, Brazil, Spain, Russia, United Kingdom, and United Arab Emirates.
“While it is inevitable that some consumers may find advertising to be intrusive, the bottom-line is that majority of consumers do consciously or sub-consciously let advertising affect their decision making process when it comes to buying smartphones. Social media in particular, plays a key role in this process” said Karthik Venkatakrishnan, Regional Leader, Marketing and Consumer Intelligence, GfK Asia.
The effects of advertising in driving purchase intent is highest in markets like India and Indonesia, where over 60 percent cite it as a purchase trigger. Even in Europe and Russia, over 40 percent also made the same claim.
Recovery of global smartphone market
Insights from GfK’s Market Intelligence (Point of Sales tracking) suggests that the worst has passed for the global smartphone market. GfK’s data reported a six percent year-on-year decline in the global sales in the latest month of July, as compared to the lowest point of -37 percent in April. Some markets have even started to turn in positive performance, such as Russia (14%), Brazil (9%) and Indonesia (8%).
“Consumer demand is returning as economic imperatives and calls for a return to normalcy prompt countries out of lockdown,” added Karthik. “GfK data shows that global smartphone sales have bottomed out and is steadily recovering.”
GfK Marketing Mix Modelling norms corroborates the pivotal role that advertising plays by quantifying the sales effects of the marketing mix
GfK’s Marketing Mix Modelling norms show that media and promotional activities are vital to drive sales. Around 14 percent of sales is driven by the direct effects of the brand’s marketing mix. In addition, the norms reveal that branding in itself, can propel sales—around 16 percent of total sales is driven by the cumulative effects of brand marketing built up over time.
The effects of branding are also reflected in the online survey. The efforts of Chinese smartphone manufacturers at branding appear to have paid off as they enjoy a strong brand preference. Overall, 36 percent of consumers have chosen a Chinese brand as their most preferred brand. This percentage is highest in India (53%), Russia (49%) and Indonesia (43%).
Aside from looking at the overall effects of marketing and branding, GfK’s Marketing Mix Modelling norms also highlight the efficiency of individual media drivers. The direct effects of digital media have ROI of 4.3x better than traditional media. This ROI is being led by social media which is 10x better than traditional media.
“As the pandemic has drastically changed our world, marketers need to rethink their marketing strategy to reach consumers more effectively. This study highlights the importance of utilizing marketing mix modelling to better understand consumers’ cross channel marketing effectiveness,” concluded Bryan Wang, Director, Marketing Science, Greater China, Facebook