In September, the once-successful Phones 4U collapsed. Who will step into the SEM gulf that they have left behind?
On 15 September of this year, Phones 4U went into administration, having been abandoned by network operators. BBC reports that this development signals the closing of over 700 outlet locations and the impending termination of over 5,000 employees.
Oddly enough, Phones 4U did not appear to be an ailing or troubled company, but one that thrived in the PPC market. So, what will happen now that top British mobile phone retailers no longer count Phones 4U among their competition?
Share of Voice
An examination of Share of Voice (SOV) reveals that Phones 4U performed commendably, usually coming in third and sometimes even second place in the market. Specifically, the early part of May marked an important turning point for mobile phone retailers due to Sony’s release of its groundbreaking Xperia Z2.
In that time, Phones 4U managed to beat out Vodafone and maintain third place, behind Three and O2. And the company achieved this level of success despite the fact that Vodafone was outspending them at the time.
The ensuing months did nothing to curb the industry-wide frenzy, as evidenced by the release of the LG G3 – another massive-spec smartphone. In the wake of this release, Phones 4U managed to secure second place in SOV merely by keeping its numbers stable, in contrast to the dramatic plummet experienced by O2.
As might be expected – given its spending levels – Three’s SOV peaked when Phones 4U finally closed its doors, reaching nearly 40%. Curiously, Apple’s SOV sunk just like Phones 4U’s did, although from a lesser peak.
Share of Spend (SOS)
As the graph above illustrates, Phones 4U was a fairly middle-ground company in terms of spending, operating towards the middle or back of the pack over the last six months.
When Phones 4U finally left the fray in September, the share of spend for both Three and EE immediately increased, but Carphone Warehouse’s share dropped a little too.
It would seem the major networks were trying to brace for any instability due to the major change in the market, rather than relaxing and assuming that the loss of a competitor would necessarily equal more traffic.
Who Will Take Phones 4U’s Crown?
Phones 4U was not necessarily an industry titan, but it was always a solid competitor, one that manage to punch above its spend on notable occasions. As such, all advertisers in this area will likely enjoy a measurable boost in performance but those who will see the most success will be those who respond best and quickest.
Overall, Three appears to be the definitive winner across the board. Vodafone’s SOV increased to above 20%, but did not soar to the extent that Three’s did. Moreover, it seems that, between Three and Vodafone (the two companies that were closest to Phones 4U in terms of spend), Three is at a clear advantage thus far to benefit the most from Phones 4U’s departure.
Even though the retailer maintained a consistently higher SOV when Phones 4U was around, it looks like it will now pick up a lot of the spare traffic. That said, Vodafone will also continue to benefit a great deal on future product releases.
(Main image credit: Rachel Hinman/Flickr)