LocalMobileSearch

Users Prefer Apps to Mobile Sites But High Expectations Burn Developers

Many developers and digital marketers still cling to the assumption that HTML5 and the "mobile web" will eventually win out over native apps. There's a kind of logic to that position. However they may be waiting a very long time for that to happen.

As has previously been written, the overwhelming majority of consumer time spent with mobile devices is spent in apps ("4 out of every 5 mobile minutes," per comScore). And according to a new survey from Compuware the majority of international respondents (85%) preferred apps over mobile sites.

The survey had a total of just over 3,500 respondents from the US, UK, France, Germany, India and Japan.

Despite the positive news for app developers the survey also had some harsh findings. For example 59% of respondents said that an app should load in two seconds or less. In addition, poor user experiences result in app abandonment, switching to competitors' apps, negative word of mouth and erosion of brand perception -- among other negative consequences.

The most common problems encountered were freezing/crashing (62%) and slow load times (47%), as well as the more generic "didn't function as expected" (37%). A majority of users had encountered one or more of these problems in using apps. Users expect apps to load faster and perform better than mobile sites: "78% expect mobile apps to load as fast as — or faster than — a mobile website."

Nearly 80% of the survey respondents said that they would give an app one (maybe two) more chances if it didn't work correctly the first time. And app-store ratings are being taken very seriously by users: "84% users say app store ratings are important in their decisions to download and install a mobile app."

The survey report cited third-party data for the proposition that the average number of apps on users' smartphones is 41.  

US Teens Go Online 'Mostly' through Mobile Devices

The key figure from a new US "teens and technology" survey by the Pew Internet Project is this: 50% of teens who own smartphones primarily access the internet that way. According to Pew (the data are from Q3 2012) 78% of US teens overall own cell phones and nearly half (47%) of them own smartphones.

I suspect if the data were from 2013, smartphone penetration would have easily crossed 50% because of Q4 holiday gifts. Among all teens (including those who don't own a cell phone), 37% own smartphones.

Part of the reason that US teens may rely more heavily on their mobile phones (and tablets) for internet access is that some do not own PCs or share PCs with their families. Thus mobile devices are more private and personal because they're not shared. Regardless teens' orientation to the internet is more mobile than their parents'.

The survey also found that 23% of US teens owned tablets (compared with 25% of US adults).  

As these teens "grow up" it will be interesting to see if they adopt a more "balanced approach" and access the internet equally from PCs, tablets and smartphones. I suspect their bias will remain toward mobile devices, with tablets taking the place of PCs for non-smartphone access. 

An October 2012 survey (n=7,700 teens) by financial firm Piper Jaffray found that Apple held an advantage among US teens:

• 40% owned iPhones (representing a majority of smartphones)
• Next phone: 62% were going to buy an iPhone, 22% Android
• 44% reported owning tablets (72% of those were iPads) 

Changing of Guard at Android Suggests Consolidation of Google Operating Systems

There has always been a somewhat awkward relationship between Google's Chrome OS (PC) and Android OS (mobile). Many people have remarked about it. Today that tension was potentially resolved.

Google CEO Larry Page announced that Android founder and Google Mobile chieftan Andy Rubin was transitioning to another role at the company. In his place SVP Sundar Pichai (who was once unsuccessfully recruited by Twitter) will take over leadership of the Android team. Pichai is currently responsible for Chrome OS and the two groups will be under his combined command.

Here's what Page said about him in a blog post announcing the change:  

Sundar has a talent for creating products that are technically excellent yet easy to use—and he loves a big bet. Take Chrome, for example. In 2008, people asked whether the world really needed another browser. Today Chrome has hundreds of millions of happy users and is growing fast thanks to its speed, simplicity and security. So while Andy’s a really hard act to follow, I know Sundar will do a tremendous job doubling down on Android as we work to push the ecosystem forward.

There's a clear logic here and the move makes sense. But my instincts tell me that all may not go as smoothly as that logic suggests. 

By all measures Android is flying high: "60 manufacturers; more than 750 million devices have been activated globally; and 25 billion apps have now been downloaded from Google Play." Yet device activations have slowed somewhat and Samsung has all but taken control of Android handset (and perhaps eventually tablet) sales. Samsung Galaxy devices represents an increasingly large share of all Android sales. 

Windows Phone is unlikely to challenge Android, nor is BlackBerry -- for at least the foreseeable future, if ever. Android can coast for some time (which is clearly not happening) and the platform would continue to dominate globally. By some estimates Android is on 80% or more of Chinese smartphones.  

If indeed this leadership change is a precursor to OS consoidation we may see some technical challenges a la Windows as a unified operating system across devices. But then again, but for Apple (and partner Samsung), Google really has no competitive threats to its global-mobile dominance on the horizon.  

A Report for Those Who Doubt Mobile ROI

This morning Google released the results of an extensive study conducted among US mobile users with Nielsen in Q4 2012. The survey explores mobile search behavior in particular and uses a combination of interviews, online survey data, diaries and search query logs to get a holistic picture of search activity on smartphones. Tablets weren't part of this research. 

Among the many interesting findings there are two big ones that stand out: 77% of mobile searches happen at home or work, even when there's a PC nearby. And 55% of mobile-search related conversions (call, store visit, purchase) happen within "one hour or less" of query completion.

These two stats illustrate two larger "truths" about mobile. The first is that mobile devices are increasingly "primary" for people as a method of internet access. Speed and convenience were cited by respondents as reasons for substituting a smartphone for a PC in a search context. 

Marketers need to be cognizant of the fact that large numbers of people will be using their smartphones (and tablets) at home to search for things, whereas before they might have used a PC. At work people may be motivated by other considerations, such as privacy, to use mobile devices vs. corporate-provided PCs. 

The other "truth" is illustrated by the 55% figure: conversions often happen very quickly after a mobile search. This reinforces the notion of the focused, "need it now" mindset of many mobile search users. Mobile searchers take a variety of actions after completing their queries. They go to websites and do additional research, they make phone calls and they go into stores. They buy things. 

But marketers can't see most of that activity, hence the complaints about mobile ROI. Most marketers get confused and "lose the trail" when users go offline. You can track calls and site visits, you can capture email addresses and you can monitor e-commerce transactions via mobile. However it's challenging to get complete visibility on all the ways that mobile is influencing purchase behavior.

The slide above illustrates the range of activities mobile search triggers. But more importantly, Google and Nielsen found that 45% of mobile search queries were undertaken to help make a purchase decision -- so-called "goal oriented" searches. And most of these will result in a conversion, often offline. 

The totality of the data released in this study (download the pdf) show that mobile users are more focused and are typically farther down "in the funnel" than PC users. Mobile (search at least) is clearly driving lots of conversions. Marketers just need to open their minds about what constitutes a "conversion" and get creative about ROI and attribution. 

Otherwise, they're not seeing what's really happening with their customers and how critical a role mobile is playing in the overall marketing and sales process.

Report: Tablets Mostly Beat Smartphones for Ad (CTR) Performance

Many of the Q4 reports released by the ad networks and major agencies showed the growth of tablet-related ad spending. That's a trend that will further accelerate under Google's new "Enhanced Campaigns" regime in which tablets are grouped with PCs for paid-search advertising purposes. In other words, marketers cannot separate PC and tablet paid-search campaigns. 

Last week Adobe reported that tablets had passed smartphones for share of global traffic.  

In many ways tablets are the new PCs, taking their place for many at home use cases. Tablet owners tend to behave more like PC shoppers, including displaying a greater willingness to covert online. By contrast, smartphone owners typically don't convert on the small screen making ROI harder to track for marketers targeting those devices. 

Because online conversions are more likely and prevalent for tablet users, the "danger" is that marketers will neglect smartphones or that smartphones will be "ghettoized" and considered good for only a limited number of purposes. In fact mobile/smartphone advertising is great for both DR and branding purposes. 

Mobile DSP Adfonic now offers data that show, across most categories, tablet advertising appears to outperform smartphone ads in terms of CTRs (though ultimate influence on conversions isn't measured).

As the chart above reflects, "tablets achieve especially strong CTRs for advertisers in the Style & Fashion, Lifestyle & Health, Entertainment & Media, and Travel verticals." Smartphones are stronger in other categories such as retail and automotive. People tend to use tablets in the evenings and on the weekends. 

Over time marketers will determine which devices are better suited to which types of advertising. However companies need to have a comprehensive strategy that recognizes the "multi-screen" consumer, who will move from device to device before converting. 

Although Kindle Fire and Nexus 7 are gaining, Apple tablets continue to dominate web traffic. The following chart shows North American traffic over the past three months, comparing the top-three devices on Chitika's ad network.

Tablets Pass Smartphones In Global Website Traffic, Will Marketers Respond?

According to Adobe's marketing group tablet growth is outpacing that of smartphones. This trend also showed up in several Q4 reports from other online marketing firms such as Marin Software. 

Adobe says that on a global basis, mobile devices (smartphones + tablets) generated 15% of all internet traffic. Of that 15%, tablets edged smartphones with 8% of traffic. The company also says that tablet users spend much more time and are much more engaged than smartphone users: "on aver­age inter­net users view 70% more pages per visit when brows­ing with a tablet com­pared to a smartphone." 

Among the countries measured, the UK is seeing the highest share of internet traffic from tablets followed by the US and Canada. 

ComScore previously reported that about 36% of total US internet time is being spent on mobile devices, even though they're generating less than that in terms of overall traffic. Part of the reason for such a discrepancy may be apps, which are often not measured but where "9 out of 10" mobile minutes are spent. 

While 6 and 7-inch tablets exist somewhere between a smartphone and a full-sized tablet (i.e., iPad Classic), tablets are increasingly replacement devices for PCs. PCs still have the largest installed base and a home in the enterprise, among business users and for more selected purposes in the home. But the centrality of the PC as the gateway to the internet is over.

Using Gartner data, USAToday chronicled the decline of PC sales (which aren't coming back): 

The "problem" with tablets is that many marketers treat them like PCs (including Google AdWords) and don't give them special attention. A study released in Q4 last year found, for example, that only 7% of retailers' websites were tablet friendly.

Yet tablet-app mobile ad creative can be very effective. In general tablet ads (in apps) are much more engaging than smartphone ads right now.

As tablets continue to gain momentum as PC replacements we may see a very odd situation develop. That is: smartphones might be given perfunctory treatment as an ad platform or otherwise neglected in favor of tablets with their larger "canvas." However, as suggested, the bulk of marketers may treat tablets like PCs and not address them with specialized ad units.

Accordingly, as mobile devices take more and more consumer time and engagement "online advertising" could become considerably weaker than it is today. 

Report: National Advertisers Getting More Sophisticated about Local-Mobile Targeting

This morning mobile ad network xAd released its year in review report. The document contains a range of information and data about the company's offerings, including the performance of ad campaigns on its network. The focus of the report is on national advertisers (rather than SMBs). And it presents a picture of marketers getting a great deal more sophisticated about local ad targeting on mobile devices.

As laid out in the report, xAd is now offering a range of local targeting flavors on mobile: behavioral, place-based, POI and event targeting.

In the graphic above you can see that from Q1 to Q4 the number of national advertisers using more sophisticated forms of geotargeting increased dramatically from 27% to 81%. In other words only 13% of xAd's national advertiser campaigns in Q4 were using "standard geo," (zip, city, DMA). The remaining 81% were using one of the other more complex targeting methods (all involving location) such as behavioral.

Of the 81% using a more precise form of location targeting, here's the breakdown:

In the report xAd offers performance metrics for these approaches compared to industry averages. The company says that its targeting methods provide a substantial performance improvement over traditional (non-location targeted) mobile search and display advertising.

In particular on the display side xAd breaks down how each of its more elaborate forms of location targeting perform. Behaviorial does the best, followed by place-based targeting.

Finally the following are the top consumer search categories for all of 2012 and the top advertiser categories on the xAd network. The latter are national advertisers and don't include small businesses. There's a general alignment across both columns but it's obviously not 1:1. 

The company's advertisers tend to be more sophisticated about location and more inclined to experiment with it. It would be great if these advertisers were representative of the entire industry. However they're not. A recent CMO Council survey showed how many agencies and national advertisers still don't "get" location.

The CMO Council survey explored national advertiser "localization" tactics. The overwhelming majority of survey respondents (over 80%) didn’t make the connection between mobile and local:

Source: CMO Council/Balihoo (n=296 national marketers/agencies)

Perhaps once more national advertisers become aware of the performance lift and case studies associated with location targeting they'll wake up to its potential. In the interim those national advertisers using more sophisticated local-mobile targeting are "conquesting" their competition.

Jumptap: Samsung Will Control 60% of US Android Market This Year

New US smartphone figures came out today from comScore for January. According to the comSumer survey Android had 52.3% of the market, while Apple was at 37.8%. Those numbers represent a jump for Apple and a dip for Google since October, the comparison period. 

Apple is the top smartphone OEM in the US followed by Samsung. Their relative shares are 37.8% to 21.4%. However Samsung is the dominant Android handset OEM by far, though LG did experience an uptick because of the extremely popular Nexus 4 (the best Android handset currently on the market). 

Today also mobile ad network Jumptap released its latest MobileSTAT report for February. In that report Jumptap says that from 2011 to 2012 Samsung's share of Android handsets on its network grew from 42% to 56%. Jumptap is predicting that Samsung's share will continue to grow, perhaps beyond 60% of the US Android handset market this year. 

Weaker or fading rivals HTC, LG and Motorola will have a much smaller share: no greater than 11% in any individual case according to the Jumptap prediction. The chart below illustrates the degree of Samsung's dominance in the US smartphone market. The comScore numbers above are not quite as severe.  

Operating system share will remain relatively stable in 2013 according to Jumptap. Accordingly, Windows Phones and BlackBerry are stuck in the basement with a combined 4% share. Indeed, 2013 will be the year that Nokia needs to make a decision about whether it wants to "diversify" with Android. If these numbers hold it will be all but compelled to do so. 

Tablets will take mobile browsing share from smartphones according to another Jumptap prediction. The firm believes that tablets will grow to capture 29% of mobile traffic while smartphones will generate 70% of mobile traffic. The tablet impact on PCs is not discussed.  

According to an earlier report from comScore mobile now represents 36% of internet time vs. 67% on the PC. I believe tablets will continue to take meaningful share from PC usage even has they cannibalize some share from smartphones (chiefly in the home).