According to the latest data from the US Center for Disease Control (CDC), roughly 133 million US adults rely exclusively or primarily on their mobile phones at home. That means they either don't have a telephone landline at all or have one but rarely use it.
The most recent data available are for the first six months of 2013. The CDC reported, "Approximately 38% of all adults (about 90 million adults) lived in households with only wireless telephones; 45.4% of all children (approximately 33 million children) lived in households with only wireless telephones." The CDC explained that younger people, adults with roomates and no kids and those in lower income groups were more likely than others to be wireless only.
The related “wireless-mostly” category is defined as "households with both landline and cellular telephones in which all families receive all or almost all calls on cell phones." According to the report, roughly 43 million US adults (17.7%) live in these wireless-mostly households.
Unlike the wireless-only group, however, wireless-mostly demographics feature better educated and more affulent individuals and families. They can afford to maintain a landline but choose generally not to use it. Most of the people reading this probably fall into that latter group.
Together these two groups represent about 55% of all US adults. This now means that landline users are in the minority.
Internet-influenced offline consumer spending is roughly 10X the value of e-commerce but no one has been able to clearly see or track this phenomenon until recently. Most marketers have focused on online clicks and conversions because they have been much easier to track and measure.
There are now a range of methodologies to track online-to-offline conversions. Some involve tracking smartphones. However some involve CRM or sales data and the matching of that data to online or mobile ad exposures. This methodology is utilized by Facebook, Twitter -- and now apparently Google.
The Wall Street Journal reports that Google is involved in a "pilot program" with six advertisers that matches online cookies to store sales data and other information provided by Acxiom Corp. and DataLogix. Facebook and Twitter both work with DataLogix as well.
Apparently the Google pilot involves search ads for the time being (but I'm sure it contemplates display as well). According to the WSJ, the in-store tracking pilot "adds a new column that shows in-store sales spurred by the ads."
Google is also in beta with a program called "estimated total conversions," which measures cross-device visits and extrapolates conversion rates from a subset of signed-in Google Chrome browser users. The company is planning on extending the program to offline store visits (tracking Android users exposed to ads into physical retail stores).
Retail is the largest spending category of online advertisers according to the IAB. In 2013 total digital retail advertising was worth roughly $9 billion out of a total of nearly $43 billion. Retailers are also major mobile advertisers.
As indicated, there are a variety of methodologies that can now be used to track online-to-offline conversions:
DataLogix and similar vendors have data on trillions of dollars of consumer purchase behavior. The internet-influenced product and services market is worth more than $2 trillion, while e-commerce in the US is worth between $210 and $260 billion.
Online to offline ad tracking and its impact on the larger digital media world will also be one of the themes of Place 2014.
No more "year of mobile jokes." Thank God.
The IAB just reported that in the US mobile advertising revenues (all formats) essentially doubled from 2012 when they were just under $3.4 billion to $7.08 billion in 2013. The IAB breaks out "online" ad revenue by format, but no longer for mobile.
However search is the largest mobile ad format or category. It's probably safe to assume that mobile search revenues were between 45% and 50% of total mobile revenue for 2013. If that's accurate, it would mean roughly $3.5 billion in 2013 mobile search revenue.
Based on last year's numbers and first half growth we had expected that that US mobile ad revenues would come in just under $7 billion. But a big Q4 bumped them over the $7 billion threshold.
According to the IAB, in Q4 2013, mobile ad revenue was 19% of total digital revenue or $2.3 billion, essentially double Q4 2012's $1.2 billion. Remarkably "mobile" captured the same percentage of total US digital advertising as online display in Q4: 19%.
For the full year 2013 mobile grabbed a still-impressive 17%. In addition mobile was the fastest growing digital ad segment, which makes sense.
Retail was the largest-spending advertiser category, followed by financial services and automotive. The IAB didn't break out advertiser spending by format. However retail is one of the top mobile-ad spending sectors , seeking to drive foot traffic to physical stores.
This morning I received a message in my in-box with the subject line: "Mobile commerce has really arrived." In the associated article a range of data were cited to argue that consumers were doing more and more e-commerce on their smartphones.
While it's true that e-commerce over tablets and smartphones is growing we should be clear about what's really going on out in the real world. Smartphones are widely used by consumers as part of their shopping and purchase research -- between 60% and 80% (or more) use them in stores for product and price lookups.
Marketers routinely undervalue and misunderstand the now critical role of mobile in consumer purchase activity. Part of the reason is tracking/attribution: smartphone owners overwhelmingly convert offline (or on PCs) and much of that behavior is simply not captured.
New research from comScore, Neustar and 15 Miles reinforces this basic point. The data are based on a December survey and behavioral observation of users. The sample size was just under 5,000 US adults.
Source: comScore, Neustar Localeze, 15 Miles
The study found that 78% of local searches conducted on smartphones resulted in a purchase vs. 64% on tablets and 61% on PCs.
The majority of those purchases (76%) happened the same day and most within "a few hours" of the lookup. This reflects the immediacy of the mobile search user's need. But here's the critical point: Almost 90 percent of those purchases happened offline, in a physical store (73 percent) or on the phone (16 percent). Eleven percent were e-commerce transactions.
Actual transaction data (as opposed to self-reported survey data) from e-commerce software provider ShopVisible found that 85% of e-commerce transactions in 2013 were PC based, only 4% came from smartphones.
Marketers need to recognize that most smartphone users are going to consult their mobile devices throughout the purchase cycle but largely aren't going to complete a transaction on that device. If they don't understand this behavior and account for it they're going to fundamentally misunderstand the role of mobile and undervalue it significantly.
This is partly why online-to-offline analytics/tracking is such an important development -- and one that we'll be exploring in depth at Place 2014.
There's a strong belief among tech insiders that "wearables" are an emerging hardware category that's here to stay and perhaps even a new marketing channel in the making. Nielsen consumer research asserts that 70% of US consumers are aware of “wearables" and roughly 15% currently own some form of the technology:
Nielsen also found that roughly half of its survey respondents were interested in the category: "Nearly half of Americans surveyed expressed their interest in purchasing wearable tech in the near future." Our survey data similarly found a fairly high level of interest: roughly 40% of smartphone owners said they were interested in smartwatches (generally of the same brand as their smartphones).
A report by Endeavor Partners, published in January (based on Q3 survey data), throws some cold water on all the excitement. The firm says that an online survey of "thousands of Americans" found that 10% of US adults owned or had used an "activity tracker" (e.g., Fitbit, Fuel Band). It didn't address smartwatches as a stand-alone category.
The study also reported high abandonment rates of activity trackers/fitness wristbands. Roughly a third of owners stopped using them within six months of initial ownership and half were no longer using them:
Endeavour Partners’ research reveals that more than half of U.S. consumers who have owned a modern activity tracker no longer use it. A third of U.S. consumers who have owned one stopped using the device within six months of receiving it.
This first Samsung smartwatch reportedly experienced 30% return rates. But that's probably a function of the poor design and usability of that device rather than a broad statement about the prospects for the smartwatch category. The Pebble smartwatch is apparently selling well.
It's still early in the development of wearables and there will be a range of new products of increasing quality and refinement. Hopefully we'll see some "next generation" watches coming out of the Android Wear effort. Apple is also expected to introduce its rumored "iWatch" at some point.
Yet the Endeavor data offer a sobering counterpoint to all the hype about the category and widespread perception that wearables are an inevitable boom in waiting.
For a time it was thought that there might be a female Cortana avatar (inspired by the game). However Microsoft (probably wisely) chose not to do that.
Cortana aims to go beyond both Siri and Google Now by being a more comprehensive way to interact with Microsoft devices. It entirely replaces the Bing search button on Windows phones and is powered by Bing and all its back-end capabilities. Users can input queries or questions by voice or through the keyboard (which Siri does not).
I'm not at the developer event and so am only reacting to the announcement and some of the details trickling out. From what I can tell however Cortana combines most of the capabilities of Apple's Siri, Google Voice Search and Google Now.
Previously I asked, will Cortana be a breakthrough or a "me too" product? There doesn't appear (from a distance) to be a "wow" breakthough capability that would immediately differentiate Cortana/Windows Phones and tips the scales in favor of Microsoft. However Cortana might impress with subtle or refined capabilities and functionality. There's a lot going on here.
After I've had a chance to use Cortana I'll be able to render a better judgment about its competitiveness and utility. Basically Microsoft had to offer an assistant on Windows Phones if it hoped to remain competitive with Apple and Google.
Cortana will launch on Windows Phones with 8.1 software in the US. It will expand to other non-US markets later.
Two surveys independently released in the past couple of weeks indicate growing demand for and consumer experience with mobile payments. One survey released by Verifone (n=1,000) found that 55% of respondents were interested in mobile payments, with higher percentages (70%) of "millennials" expressing interest.
In that survey the motivations or perceived advantages of paying with a smartphone included:
A separate survey released by Local Corporation (fielded by the eTailing Group, n=1,294) asked a range of questions about mobile user behavior. Among them were several questions about mobile payments.
The survey found that 27% of consumers had used their smartphones to pay for an in-store purchase at some point. However the materials and discussion released didn't indicate how "in-store" was defined (did it include Starbucks, for example?). Reasons for not using a "mobile wallet" were security (44%) and privacy (36%).
When asked what brands consumers trusted to manage mobile wallets and mobile payments, consumers said:
It's not clear whether the findings immediately above are statements about the brand in general or indicate any direct experience of usability. The mobile/offline version of Google Wallet in its current form is essentially a dead product.
Apple and Amazon have not yet fully entered mobile payments but are going to do so. Apple has filed patent applications that indicate its intention to get into mobile payments, with its more than 600 million consumer credit cards on file.
We have argued that mobile payments are entering the mainstream through vertical or specialized apps that contain a commerce elment but with offline fulfillment -- Uber, AirBnB, OpenTable are examples. We should continue to see mobile payments "mainstream" and gain increasing momentum over the next five years.
According to new data released by Flurry apps have solidified their hold on mobile user behavior, claiming 86% of all time spent on the mobile internet. Early prognosticators believed that mobile apps were a temporary bridge to the mobile web and would eventually give way to the "open internet."
That obviously hasn't happened. Perhaps years from now things will be different.
Earlier this year, consistent with Flurry's report, Nielsen found that about 89% of all time spent in mobile is with apps; 11% on the mobile web. Yet, despite this massive time-spent imbalance, the mobile web still has greater audience reach than mobile apps.
Among mobile apps, gaming is still the single largest category with 32% of time spent according to Flurry. However Facebook (including Instagram) is by far the dominant individual app, accounting for 17% of all time spent. By comparison YouTube captures 4% and Twitter 1.5%. Apple's Safari browser grabs 7% of time spent and Google's browsers 5%.
Ad spending in mobile is growing quickly as brands and marketers race to catch up to consumers. According to the chart below Google claims a disproportionate share of ad spend, while Facebook is more or less in balance. By comparision the long tail of apps fail to capture their share of ad spend -- suggesting significant future growth for in-app advertising.
An app developer and publisher survey conducted this year by App Annie found that only 42% monetized with display advertising.
Live Webcast: Wed., April 30, 2014 - 1:00pm ET / 10:00 am PT
Beacons are hot. Once dismissed by many, they are now being widely deployed in retail and grocery stores, stadiums and entertainment venues. Apple’s support for Bluetooth (iBeacon) has put the technology on the map and driven its growing adoption.
While many people have read about iBeacon, they don’t clearly understand what beacons can and can’t do. Join Opus Research Senior Analyst Greg Sterling and Steve Hegenderfer, director of developer programs at Bluetooth SIG, for an informative and interactive discussion about all things beacon.
Bluetooth SIG is the group that oversees the standards and licensing of Bluetooth. We assure you Hegenderfer will speak plain English during a presentation aimed at marketers, agencies and business decision-makers.
In this accessible, non-technical session you’ll learn:
From the beginning, after Nokia announced that it was embracing a third party mobile operating system (Windows), I argued that Nokia should have also released Android devices. And in something of a surprise, we learned late last year, after the $7+ billion acquisition of the company's hardware division by Microsoft was announced, that Nokia had been secretly working on an Android handset.
Chinese and other Asian regulators have delayed the closure of the Microsoft-Nokia transaction, which has now been pushed to the end of April. But it still should be approved and close.
Earlier this year we got to see the Nokia-Android handset, the Nokia X (and its kin). The company created a Windows Phone-like UI and overlaid it on top of a semi-forked version of Android. The idea is to bring low-end buyers into the Nokia fold with a Windows-like Android UX and Microsoft services and then upsell them into a true Windows-Phone experience.
Intended to be highly affordable the Nokia X has now rung up 10 million pre-orders in China. These are not actual sales (yet) but reservations to buy the phone when it becomes available in the near future. This impressive level of demand indicates that had Nokia been building Android phones all along it might now be in a very different position and potentially wouldn't have had to sell to Redmond.
Of course Microsoft, heavily dependent on Nokia, recognized its own vulnerability and essentially bought the Finnish company's devices division for defensive reasons. Had Stephen Elop made different OS choices, Nokia might today be vying neck-and-neck with Samsung for position as the top global Android OEM.