By Rachel Starr
Senior Associate, Marketing
The we-need-things-NOW mindset is alive and growing, with consumers frustrated with any lag in communication between their phones and wireless networks. Users have no time for slow technology and are constantly on the lookout for solutions to that. Enter 5G. In an age where speed is the key buzzword for consumers, mobile carriers are responding. The impact of the new technology is expected to be great—but gradual.
Even with each carrier getting behind the new technology, as of the end of 2019, 5G networks are still scarce, and few people connect to them. However, consumers are interested in what 5G promises.
The 5G Growth Forecast
A Piper Jaffray survey published in September 2019 found that 23% of iPhone owners would upgrade to a 5G phone once it launches. In addition, according to a report by IHS Markit, 2020 promises to be a huge replacement cycle for phones with smartphone shipments expected to reach nearly 74 million in 2020, when Apple will reportedly release a 5G iPhone.
5G is a new technology worth talking about, and one marketers should keep an eye on when it comes to adjusting their mobile marketing strategy.
What is 5G?
5G stands for fifth-generation cellular wireless and promises faster speeds and very low latency (i.e., the time it takes for a network to send a packet of data after it is requested from a receiving device), and much higher network capacity and reliability. This means a faster experience for consumers, with mobile devices communicating with wireless networks drastically faster and users experiencing increased download and upload speeds.
4 Ways 5G Will Revolutionize Digital Marketing & Advertising:
1. 5G Allows Marketers to Reach Always-On Consumers
Despite many consumers claiming to want to lessen their screen time, with phone-free weekend camps popping up around the country, eMarketer estimates that U.S. adults will spend an average of nearly four hours a day on their mobile devices in 2020, with more than two-thirds of that time (2 hours and 40 minutes) on smartphones.
Screen time on mobile devices has drastically changed over the years. According to The Drum, 64% of people use their phone while watching TV, to post on social media, read the news, message friends, play games, shop, and more, and 55% of people use their phones in bed to do the same. Our phones are not just for making and receiving phone calls, and the mindset on its functionality and use has greatly shifted.
2. 5G Will Supercharge Mobile Digital Marketing
With users’ eyes glued to their cell phone screens, mobile marketing is as important as ever, with more companies advertising through mobile. eMarketer estimates that this year alone, $120.37 billion will be spent on mobile advertising, more than desktop and Connected TV advertising combined ($30.91 billion). 5G’s ability to personalize information in an entirely new way makes it a powerful new technology for marketers and advertisers.
When asked to name which types of activities consumers are likely to increase due to the arrival of 5G, consumers ranked video streaming first. As a result, the release of 5G will help cause video usage to account for 70% of mobile network traffic in 2022, up from 47% in 2015.
3. How 5G will Affect Infotainment and In-Vehicle Advertising
Cars, like phones, have evolved from the job in which they were originally created. It’s no longer about just getting a consumer from point A to point B. Rather, our cars have become moving information and entertainment systems. Drivers listen to Sirius XM radio to hear their favorite songs or listen to streaming audio services or a current podcast. Now, participating automakers can take advantage of this shift and broadcast full-definition content.
With 5G, advertisers will be able to serve an ad to one screen while a passenger is watching streaming content, and another to the person they’re next to, who may be watching something else. They can drill down to location to, and serve an ad as someone is crossing into Portland, Oregon or as someone enters Los Angeles, CA.
According to Gartner, Inc., by 2020, there will be over 250 million vehicles connected to the 5G network, which will drive the in-vehicle infotainment market up to $270 billion. It’s all about securing brand partnerships and taking advantage of all that 5G technology has to offer.
Luca de Meo, Chief Executive of Volkswagen’s SEAT, unveiled their concept of a 5G connected vehicle. According to Reuters.com, during the unveiling he said, “connecting a car with a passenger’s mobile phone, or external infrastructure or retailers could lead to billions of possible transactions.”
Audi is another car brand currently exploring the use of 5G, partnering with Ericsson manufacturing in Germany to experiment with smart cloud 5G technology and Internet of Things (IoT) research and development.
4. How 5G Technology Unlocks AR/VR Marketing and Ecommerce Applications
The introduction of new, powerful phones like Apple’s 5G iPhone and Android’s second-generation phones, along with the continued buildout of 5G networks, will create opportunities for advertisers and publishers to develop new streaming media formats with greater capabilities based on 5G’s low latency and fast download speeds. As consumers spend more time on 5G phones they expect new experiences to justify the increased expense, so it is up to marketers to capitalize on this.
One example of this is retail. Instead of merely showing consumers a shirt they may like, or an accent chair they think will look good in their bedroom, show them. Furniture shopping, for example, has changed with AR, allowing a consumer to highlight said accent chair and place it in their room to see how good it will look with the rest of their bedroom furniture. 5G’s low-latency offering will only enhance this experience, allowing for consumers’ phones to communicate even better with the network, as if the furniture truly is in their bedroom.
The use cases of AR and VR are vast. Over the next year, 100 million consumers are expected to use augmented reality to shop. Creating more and more meaningful, immersive experiences is the future of online engagement, and 5G will usher in those capabilities in more natural ways.
Raise the Bar: Our Advice to Marketers
5G research is underway but the rollout is still a few years out. That doesn’t mean you shouldn’t have 5G in your sites, however. We recommend incorporating more mobile marketing into your media strategies as well as advertising that incorporates AR and VR.