Data And Forecasts

Despite Kindle Fire, Nexus 7 Sales 98% of Tablet Traffic Still Coming from the iPad

I've written about this before: the discrepancy between tablet shipment/sales and traffic figures. On the one hand you have the IDCs and Gartners of the world reporting tablet "shipments," showing iPad rivals gaining. On the other are the companies reporting the actual traffic they're seeing, which indicates the iPad still dominates all other tablets by a huge margin. 

IDC's Q2 market share data (based on "shipments") argue the iPad has a 68% global share. That's up slightly from Q1. 

IDC: Top 5 Vendors, Worldwide Media Tablet Shipments, Second Quarter 2012 (Preliminary) (Unit Shipments are in thousands) 

However, earlier today, digital publishing platform Onswipe put out some data that show that the iPad's share of traffic generated was about 98%. This finding was based on analysis of almost 30 million impressions on 1200 sites earlier this month. 

 

The iPad's nearest traffic competitor, according to Onswipe, is the Galaxy Tab with 1.53% of tablet traffic. 

Ad network Chitika has previously published similar numbers. Earlier this summer Chitika found, based on millions of impressions on its ad network, that the iPad "accounted for 94.64% of all tablet-based traffic." The nearest competitor, again the Samsung Galaxy Tab, had "a lackluster market share of 1.22%."

So while Kindle Fire and other tablet devices (e.g., Samsung Galaxy Tab) have sold millions of units, for some reason these devices are not showing up in the traffic logs of publishers. That could well change in the coming quarter with better Kindle Fire devices and the success of the Nexus 7. But for now there appears to be a strange gap between device sales/shipments and traffic figures being generated by tablets.  

WSJ Article on Mobile Ad Tactics Nearly "Content Free"

Far too often in tech journalism and blogging a provocative headline is betrayed by a superficial or "content-free" article. Such is almost the case with a story in the Wall Street Journal that carries a provocative headline Mobile Ads: Here's What Works and What Doesn't.

In a 1,000+ word article with such an intriguing title there's very little light shed on the subject. Here's the substance in the piece: 

  • The article cites the eMarketer 2012 mobile ad forecast ($2.6 billion). Our forecast was $2.3 billion (admittedly now a bit low). The number represents just about 2% of all US ad spending according to the article
  • Mobile ad CPMs average $2.85 (source: Opera/AdMarvel). That's probably high at this point
  • About half of all U.S. mobile ad spending goes toward search ads, more than the roughly 47% of total digital spending going into Web search (source: eMarketer; however the IAB reported that about 48% of all 2011 mobile ad spending was search, nearly identical to PC search ad spending)
  • Local realtor advertising on Zillow is cited as an example of success on mobile devices  
  • Full screen takeovers are used as an example of successful mobile ad units, but not without caveats 
  • Unexpected/in your face ads (ads in unexpected places: i.e., homescreen of Kindle devices) are said to work. However, this is a dubious recommendation 

That's it.

In fact the article doesn't do very much to illuminate (beyond search) what types of ads are truly working on mobile devices. And the big discussion that the piece neglects is ad creative. More than any other variable ad creative is responsible for the success or failure of the campaign.

There's also no discussion about various flavors of ad targeting and local targeting in particular (although that's implied in the Zillow mention). The article also says nothing about the efficacy of deals or offers as a driver of mobile ad response. Consistently deals/coupons/offers are cited by consumers as the category of mobile advertising they're most interested in. 

Finally, mobile loyalty marketing (vs. media/ad buying) and mobile CRM can be extremely effective marketing tools but these too are not mentioned.  

So much for "what works and what doesn't."  

Developer Survey: RIM Is Dying, Android Interest Declines

Appcelerator released its Q3 developer survey. The quarterly survey this time polled more than 5,500 developers globally on their attitudes toward various platforms and future-trend predictions.

The survey result that's going to get most of the attention is the one that found 66% of developers believe "that it is 'likely to very likely' that a mobile-first social startup will disrupt the market for social applications on mobile devices and take market share from Facebook." Indeed, this describes Instagram before Facebook acquired it for roughly $1 billion. 

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Other top-level survey findings include the following: 

  • By 2015 developers "will be building mobile applications for more than smartphones and tablets: TVs, connected cars, game consoles, Google Glass, and foldable screens" 
  • Mobile developers are disappointed with nearly every aspect of HTML5 (vs. apps) 
  • Apple continued as the "top platform of choice for developers"
  • Developer interest in Android "declined for a fourth quarter in a row" and RIM interest declined to "an all-time low"

The survey also indicated that developers were interested in Windows Phone 8 smartphones but that they were taking a wait-and-see approach. Only when Windows Phones crossed relatively high penetration levels would developers turn their attention to the platform in earnest. However developers were more sanguine about the prospects for forthcoming Windows 8 tablets. 

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It's also interesting that despite sales developers don't seem very interested in the Kindle Fire. Perhaps that will change if the recently upgraded line of Kindle tablets sell well.

Finally it's curious that despite continuing market-share gains developer interest in Android continues to erode. This must be a reflection of the challenges of making money on the platform.

Bango's Payments Deal with Facebook Goes Live

Bango's previously announced mobile payments deal with Facebook has formally launched in the US, UK and Germany. It allows users to purchase (digital) goods with carrier billing in these countries. 

Bango says this will allow users to buy game credits, apps and other virtual goods through "frictionless operator billing, paying on their phone, without the need to register personal details."

Bango also has deals with Google (Play), Amazon, BlackBerry App World and Opera's Mobile Store. The company added that its conversion rates are higher than the industry average for carrier billing: 

Conventional operator billing is expected to achieve a 40% conversion rate. Put simply, most mobile commerce customers who click ‘buy’, do not successfully buy. Billing with the Bango payment platform delivers an average conversion rate of 77%. Most users who click ‘buy’, do buy.

While carrier billing is useful in countries where there are many "unbanked" or where the specific transaction is likely to be conducted by a younger user, in the US and much of Europe credit cards are a preferred method of payment by most adults. 

Carrier billing is much more widely available than other forms of mobile payments for obvious reasons. However carrier fees are much higher typically than credit card fees and settlement can take months depending on the country. 

Even though Facebook eliminated Facebook Credits, which was a surprise to me, it's possible that Facebook will eventually acquire a mobile payments provider. Bango's market cap, for example, is only $118 million. Facebook could buy the company and associated revenue stream, as well as a set of global carrier relationships -- instantly.

Amazon Dominates M-Commerce, While Wal-Mart Owns Check-ins

Amazon is the king of mobile retail; Wal-Mart is the leader of offline check-ins. Last week there were two sets of parallel data released that provided some insight into how consumers are using mobile devices, both for "m-commerce" and in stores.

Data from comScore found that among US smartphone owners “4 out of 5″ are going to retail site/apps on their handsets. Some of this is in-store price and review checking.

ComScore put the total number of mobile-retail visitors at roughly 86 million. Unsurprisingly Amazon was the leading retail destination with an audience of almost 50 million smartphone owners.

These mobile-retail site visitors were both somewhat younger and more affluent than corresponding retail site visitors on PCs. 

The number four mobile retailer on the list above, Wal-Mart, is the leader when it comes to in-store check-ins. According to data compiled by LocalResponse this summer from Twitter, Foursquare, Yelp and Instagram, Saturday is the most popular day to check in followed by Friday and then Sunday. Most check-ins occurred in the afternoon or early evening.

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LocalResponse also found that men were more likely than women to check in. However gender check-ins by store varied, with Target being the most popular store for women. BestBuy was the most popular check-in retail location for men. 

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While some retailers are creating incentives for users to check-in, this should be exploited much more aggressively both to get people into stores and as a corresponding analytics tool to indicate the success of various promotions. Hashtags, offers and other mechanisms could be used to track specific promotions. In addition, users could be "messaged" (on Twitter) or otherwise notified (i.e., on Foursquare) while in stores with further promotions and rewards.

In general traditional retailers have yet to fully recognize the potential and utilize social media check-ins for in-store loyalty and sales purposes. 

Report: There May Already Be More than 15M iPhones Running iOS 6

Apple is famous for moving people along to the next software or OS upgrade. And iOS 6 appears to be no exception. 

Less than 24 hours after it became available for public download, the new mobile OS was responsible for 15% of overall Apple device traffic on the Chitika ad network.

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To measure this, Chitika said it "took a sample of millions of mobile ad impressions coming out of the Chitika Ad network ranging from September 19th to September 20th 2012. The growth rate of iOS 6 was then compared to total iOS Web usage using a time series to illustrate the rate of adoption of the new OS."

I asked Chitika whether they could extrapolate and tell me how many actual devices this represented. They declined to do that.

Source: Apple quarterly reports

If we make the assumption that the 15% of Chitika traffic translates 1:1 into individual devices -- in other words, 15% of the traffic is from 15% of all the iOS devices -- then we can crudely extrapolate using the chart above. 

The iPhone 4 and 4S can upgrade to iOS 6. Apple hasn't broken out the sales figures by device generation but everything before Q2 2010 was iPhone 3GS and "below." The iPhone 4 was announced in June, 2010. Since Q2 2010 Apple has sold roughly 193 million iPhones. 

It's safe then to say that well over 100 million iPhone 4 and 4Ss are in the market (that's a conservative estimate). If 15% of those now have iOS 6 running that means there are roughly 15 million such devices (around the world) that have downloaded the new OS only 24 hours after launch. 

These numbers could be way off but they're probably not.

Today the pre-ordered iPhone 5s are arriving and people around the world are buying them from local stores. Accordingly the number of iOS 6 phones in market could be over 20 million (downloads + sales) within a week or two. 

Related: iPhone 5 Reaches Same Level of Online Sales in First 3 Days that iPhone 4S Reached in First Month

 

As World Awaits iPhone 5 Google Reminds Everyone It's the Market Leader

Apple's rivals have been trying to get out in front of the iPhone 5 and the announcement today. Nokia held its Lumia/Windows Phone 8 event last week. Motorola (Google) announced a number of new Android handsets and, of course, Amazon had its big Kindle Fire press conference last week as well. All of these anticipated the iPhone 5 announcement today and tried to preempt it to some degree.

Last night Google's Hugo Barra casually posted some stats on his Google+ page: "Today is a big day for Android... 500 million devices activated globally, and over 1.3 million added every single day."

Android is the dominant smartphone platform in the world -- in case you forgot. And Google wanted to get that stat out there and inserted into the blizzard of articles that will be published today about Apple and the iPhone: " . . . but Android is the market leader with 500 million devices activated globally." 

The iPhone 5, as I said on my personal blog Screenwerk," is a critical release for Apple because Android phones have caught up or in some cases surpassed the device (i.e., LTE support, NFC). The new iPhone today must offer a larger screen and LTE support at a minimum to maintain consumer interest. 

An unintended leak on the Apple site indicates that there will in fact be LTE support. We'll see what else in less than a half hour.  

Nielsen: 58% of Teens Own Smartphones

Ahead of tomorrow's iPhone 5 launch -- perhaps they'll call it the "iPhone Cinq" -- there's lots of smartphone data flying around. Today Pew released some new demographic data about smartphone ownership (penetration higher among younger and more affluent users). And yesterday Nielsen discussed smartphone adoption among younger users:

Overall, young adults are leading the growth in smartphone ownership in the U.S., with 74 percent of 25-34 year olds now owning smartphones, up from 59 percent in July 2011. Interestingly, teenagers between 13 and 17 years old demonstrated the most dramatic increases in smartphone adoption, with the majority of American teens (58%) owning a smartphone, compared to roughly a third (36%) of teens saying they owned a smartphone just a year ago.

According to the US Census Bureau there are roughly 21 million teens in the US (according to 2008 data). Pew surveys have shown that 88% of US adults own mobile phones. Pew says that 77% of teens have mobile phones and 23% have smartphones. Nielsen is saying the overall teen smartphone number is much higher: 58% 

If 23% of US teens have smartphones that translates into roughly 4.8 million people. The Nielsen 58% figure equals roughly 12.1 million teens who own smartphones. If we average the two sets of numbers it comes out to 8.5 million teens with smartphones approximately. 

Using population data and the Pew survey figures, that would mean roughly 120 (or so) million US adults owned smartphones in the US today. Beyond this we can add 5 - 10 million more for teens. That would mean today we're looking at something like 125 to 130 million smartphones in the US. 

Millennial Media: Smartphones Now 74% of Impressions on Network

Millennial Media is out with its quarterly device barometer: Mobile Mix. The report tracks the top devices and operating system share on its network. It's based on a different methodology (share of ad impressions) vs. Nielsen or comScore, which both rely on surveys.

It's not a totally "objective" view of the marketplace. But its helpful to identify and monitor trends on a directional basis. The three big trends identified in the document are the following:

  • Increasing percentage of smartphones on Millennial's network (now 74%) vs. 50%+ for the overall mobile market
  • iOS growth and slight Windows Phone growth vs. other operating systems. It appears the iPhone grew at Android's expense, while Windows grew at RIM and "other's" expense
  • The document also shows the growth of "connected devices" (tablets)

Here are the charts that illustrate the above: 

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In the future the tablet market will be a contest between Apple, Google and Amazon. Samsung, unless it decides to price things much more aggressively, will be marginalized -- at least in the US.

 

ComScore: iPhone Now 33% of US Smartphone Market

With Android increasing its dominance around the globe, the US market seems to be something of an anomaly. Measurement firm comScore reported this morning that Apple has gained share in the US.

The iPhone now represents one out of every three smartphones in the market. Android also grew its share slightly, while Windows has continued to lose share according to comScore: 

  • Google: 52.2%
  • Apple: 33.4%
  • RIM: 9.5%
  • Microsoft: 3.6%
  • Symbian: 0.8%

The firm also said that 114 million US adults own smartphones, representing just under 49% of the mobile subscriber population (using a base of 234 million). Nielsen, Pew, Flurry Analytics and others have found, however, that more than 50% of US adults own smartphones.

Flurry asserted recently that more than 70% of US adult mobile subscribers owned smartphones.

Millennial: Tickets Third Most Popular M-Commerce Category

Millennial Media is out with another vertical report. Last time it was travel; this morning the ad network released a report on Entertainment. It was generated in conjunction with comScore. From my perspective, there were two pieces of interesting data in the document -- although the case studies in the report are also interesting.

One was about mobile purchase categories. The other was Millennial's "post click" campaign data for the Entertainment category. This data reflects the objectives advertisers are trying to accomplish with their campaigns. 

Screen Shot 2012-08-30 at 7.24.10 AM

The report said that "convenience" was the chief motivation for buying something on a mobile device (vs. online or in-person). Roughly two-thirds (63%) of smartphone owners cited this as the rationale for m-commerce. Convenience (vs. price) is typically the major reason for buying online as well.

Between 20% and 35% of US smartphone owners have ever made a mobile purchase according to several studies released in 2011 and 2012. Paralleling the data in the chart above, digital content (books, movies, apps, music) leads m-commerce overall. However we will see a broader range of e-commerce transfer over to mobile over time. 

The problem of entering credit card information is a major barrier to mobile commerce today. Those vendors that have stored credit cards (in other words direct relationships with consumers [i.e., Amazon]) will see much more volume than those asking consumers to enter 16 digits. A majority of mobile e-commerce efforts will need to find some third party solution (e.g., working with PayPal, Amazon or solutions such as Card.io) if they want to generate sales from smartphones. Tablets are a different matter; entering credit card information is not as much of a barrier on those devices. 

Screen Shot 2012-08-30 at 7.26.28 AM

The chart above reflects campaign objectives, comparing entertainment companies (including movie producers and theaters) with Millennial's overall customer base. As might be expected, driving to a video view (e.g., movie preview) is the most common campaign objective. 

Video (assuming a decent WiFi or network connection) is a very effective ad format in mobile. This is especially true for movie previews, which are regarded as content and not ads by most consumers. 

In addition to video views, the other two most common campaign objectives were: driving to a social media page/site and "m-commerce" (buying tickets). Those consumers that have movie ticket apps installed (e.g., Fandango), with a stored credit card, are going to be increasingly likely to buy tickets via smartphones over other methods. 

Smartphones Now Dominant, Growth Accelerating

In the US smartphone penetration crossed the 50% threshold earlier this year. And two new reports show that smartphone growth and dominance are accelerating.

The first is a forecast from IHS iSuppli, which projected that 54% of mobile handset shipments in 2013 would be smartphones. This would mark the first time that smartphone shipments will dominate feature phones. It wasn't supposed to happen for three more years. 

Part of the popularity of smartphones is driven by "culture," as well as the convenience and value of having a smartphone. But smartphone adoption is also being driven by price. Subsidized smartphone pricing in the US often makes the devices as cheap to buy ($49 - $99) as feature phones.  

Separately, Flurry Analytics said in a recent report that 78% of US mobile phone users now own smartphones (iOS or Android devices).

Most Mature iOS and Android Device Markets 

This caught my attention because this figure (78%) is obviously much larger than the Nielsen and Pew numbers that show 50%+ smartphone adoption. Pew, comScore and Nielsen extrapolate from survey samples to calculate the total number of smartphones in the US market.

I exchanged emails with Flurry seeking clarification of this 78% figure and what it represented. Flurry confirmed my interpretation was correct.

The company is saying that 78% of US adults with active mobile devices are on iOS or Android devices. Flurry says that its data are based on actual usage and its population of device owners globally is in the hundreds of millions. 

Flurry now says there are 165 million active smartphones in the US today. That compares to a PC Internet population of roughly 220 million. 

Survey: Mobile Payments Face Uphill Battle

My view about mobile payments is the following: once people have a positive concrete experience of using mobile payments they'll be sold, so to speak. Most people haven't had those experiences yet. Accordingly there's skepticism or indifference about mobile payments in the US. This, despite more than 20 companies scrambling in a kind of land grab that anticipates a glorious future right around the corner.

Several consumer surveys in the past 12 months indicate Americans are concerned about security and privacy or don't see the need for mobile payments: "see no benefit," "easier to pay with cash or credit cards" are some of the obstacles facing mobile payments adoption. Roughly 70%-75% of survey respondents say they aren't interested.

I'm the first to point out that attitudes and behavior are often two different things. The survey data are surprisingly consistent. Also consistent are findings that consumers in the 25-55 age range are typically the most interested in mobile payments. More educated, urban and usually more affluent consumers are also typically more interested.

Screen Shot 2012-08-24 at 12.23.16 PM

We just completed a survey (n=1,501 US adults), which asked whether people were interested in using their phones as mobile wallets, instead of cash or credit cards. The results are very consistent with other surveys from UC Berkeley Law School, the US Federal Reserve and others.

About 29% of respondents (a decent number) say they have varying degrees of interest. Those who are most enthusiastic, however, are a tiny minority (6.8%).

Again, as people start to have real experiences of mobile payments, I believe these numbers will start to rise. But these findings reinforce the notion that there's a mountain to climb. Providers must educate consumers, reassure them on security/privacy and offer them tangible benefits for trying and using mobile payments systems.

An exception to all this is Square and its various imitators (PayPal Here, Intuit's GoPayment, PayAnywhere, etc.). In most of these scenarios the consumer isn't doing anything new; there's a familiar card swipe. The change is all on the merchant side. However as consumers develop familiarity with and start to trust these providers that becomes the basis for trying some of their "more exotic" payment services, where there is a behavior change (e.g., Pay with Square, PayPal Mobile apps).

While we believe that the mainstreaming of mobile payments is "inevitable," the timing and the specific services/platforms that will mainstream them have very much yet to be determined.

Study: 19% Said Retailers Without Mobile App 'Old Fashioned'

Apigee released new survey findings about mobile attitudes and usage in anticipation of Holiday 2012 shopping. The survey polled 2,200 US adults this month and was conducted by Harris.

It found that 57% of respondents "would consider" buying holiday gifts on their mobile devices. Currently the number of Americans who've made an "m-commerce" purchase stands at about 35%, according to 2012 survey data from IPSOS.

In order, Apigee survey found the following to be the most likely m-commerce categories:

  • Books – 32%
  • Electronics – 31%
  • Gift cards – 27%
  • DVDs/Blu-ray discs – 26%
  • Clothing – 24%
  • Toys – 20% 

The survey didn't ask about specific retailers but all of the above categories (maybe clothing excepted) are popular on Amazon, which continues to be the single biggest beneficiary of mobile commerce (perhaps after Apple iTunes).  

Apigee also asked consumers about the perceived benefits of using mobile (apps):

  • Browsing for deals wherever you are – 50%
  • Performing price comparisons inside a store – 48%
  • Using a mobile device to find a retail store – 40%
  • Redeeming electronic coupons – 38%
  • Secretly shopping without a spouse/significant other knowing – 25%
  • Buying embarrassing or personal items without using a work computer – 14%
  • Sneaking shopping time in at work – 12%

Just over half of the survey respondents had a negative reaction to the idea that a retailer wouldn't have a mobile presence or offer a mobile app. Most damning, 19% said "it makes me think the retailer is old-fashioned" and 7% said it might hurt their loyalty to the store. Younger users were mostly likely to have a negative attitude toward retailers without mobile apps.

Clearly e-commerce isn't the only reason to offer a mobile site or mobile app. There are many other reasons, including getting shoppers into stores, CRM and providing better customer service in the store (or overall). 

I wrote earlier this week about a GroupM survey that offers some very interesting insights about mobile showrooming and in-store shopping. That study suggested ways that retailers can integrate mobile into a larger strategy to lure and keep shoppers in stores and combat the showrooming challenge. 

Study: Most Showroomers Will Abandon Stores if Price Difference Is 5% Less Online

Electronics retailer Best Buy just reported this week that Q2 profits dropped by 90%. That's partly attributed to the weak economy and partly to the phenomenon of "showrooming," where shoppers look at products in stores and buy them later online. That phenomenon has always existed but it has been "exacerbated" by the rise of smartphones and in-store price comparisons. 

As more people buy and carry smartphones they're more inclined to use them in traditional retail environments.  

Consumer surveys have indicated anywhere from 50% to 80% (or more) of US mobile consumers now use their phones in stores for product and price information, as well as comparison shopping. Amazon and eBay have been big beneficiaries of this trend, but especially Amazon. Traditional retailers have in some cases suffered and in a few instances (i.e., Best Buy) showrooming has become something of a crisis.

Agency GroupM recently released some survey findings and analysis addressing the phenomenon of showrooming. Roughly 1,000 US adults were surveyed and asked about shopping scenarios and attitudes. 

As one might expect, the larger the price difference between in-store items and online prices the more likely buyers said they would be to abandon the store. But somewhat surprisingly GroupM found that even a 2.5% discount could have a significant impact on store abandonment: 45% of survey respondents reported they would leave the store. If prices were 5% lower online, 60% of respondents said they would leave. 

There is a difference between self-reported survey data and actual behavior. But the GroupM findings reflect the new consumer mindset.

GroupM identified the profile of a likely "showroomer": younger, female, heavy online shopper and lower income. It also found at the other end that 10% of respondents (loyal to the retailer) wouldn't leave the store regardless of online price discounts. However there's a "marginal showrooming" group that is somewhat price sensitive but can be influenced to "stay in the store."

Factors that GroupM identified to help retailers combat showrooming included the following: 

  • Good service and in-store sales help
  • Channel agnosticism, so if an item isn't in the store it can be ordered online and shipped via the same retailer
  • Retailer apps that offer useful information, including inventory 
  • In-store loyalty programs
  • Better online marketing to create additional incentives to come into stores (e.g., deals)
  • Price awareness that helps ensures prices remain within striking distance of online retailers which may have lower costs  

Providing good in-store service, which extends to retailer apps, is a key variable here and one that might cause retail executives to balk. They have generally been de-skilling their workforces for years. However they'll suffer the consequences of poor service and indifferent consumers if they don't do something.

Beyond this, a multi-faceted approach is called for, one that implies a great deal more sophistication than what's on display for most traditional retailers today. 

Report: iPhone Owners Most Receptive to Mobile Ads

The Online Publishers Association has published some new survey data (n=2,450 US Internet users) which mostly duplicate pre-existing smartphone survey research: size of user population, activities, attitudes and so on.

While the data are generally consistent with prior research, a few of the findings appear to contradict or argue with earlier findings. For example, the OPA found that its respondents spent more time "accessing content" via the mobile Web vs. apps. Comscore, by contrast, has reported that more than 80% of consumer time spent on the "mobile Internet" is in mobile apps and only 20% of time spent is with the mobile web.  

Beyond this there are a considerable number of findings in the study. Because they are largely duplicative of earlier work, they're not terrifically interesting to me. You can download the entire slide presentation from the OPA site. However I'll pull out a few items that are worth highlighting. 

The first is that more than half of survey respondents said they preferred using a smartphone for certain types of content or online activities to PCs and tablets. The question was, "When doing the following activities, which type of device do you most prefer to use?" 

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The OPA found that smartphone users downloaded an average of 36 apps over the past year. The study also found that 56% of respondents used at least half of the apps they had downloaded on a regular basis. Only 14% of those apps were paid, however. 

The survey also found that 70% of iPhone "content consumers" bought paid apps but only 34% of Android users paid for content-related apps. That smartphone content-buying population is more receptive to mobile advertising and more likely to take action in response according to the OPA findings. 

Owners of the iPhone were the most positive about mobile ads and most likely to act in response:

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At the highest level the findings underscore that there's a very large audience out there that in some cases is more interested in content on smartphones. While there were no earthshattering discoveries in the study, it adds to the growing body of research that reflects the importance of mobile distribution for both publishers and advertisers -- and the missed opportunity for those not currently participating in mobile. 

The Right Approach to Mobile Can Boost In-Store Sales

Many retailers are wringing their hands over the so-called "showrooming" phenomenon, where consumers visit stores to investigate and try products but ultimately make purchases through Amazon and other e-commerce sites. There have been various articles written about how traditional retailers can combat this. Some emphasize loyalty programs while others focus on more "defensive" measures such as developing proprietary SKUs (e.g., Target) so consumers can't scan products in the store and obtain competitive pricing information.

Yet the use of smartphones in stores will only continue grow. It's important for retailers not to fight but to embrace the trend. 

While a recent Google survey found only 31% of smartphone owners used them in stores (among apparel shoppers), another survey of 1,557 US adults, conducted in March by Deloitte, found that 61% of respondents used their smartphones in stores.

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Source: Deloitte

In addition, data from multiple sources (i.e., InsightExpress, Google, Nielsen) published last year and earlier this year indicate much higher numbers: up to 80% or more use or have used their devices in stores while shopping. 

The flip side of "showrooming," the discussion of mobile consumer shopping continues to focus on "m-commerce." However mobile's biggest impact wil be on in-store sales (just as the PC Internet's biggest impact is on in-store sales and not e-commerce). The Deloitte study confirms or reinforces this notion.

The chart below mashes up data from several sources to project that mobile will influence almost $700 billion in offline shopping by 2016. 

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Source: Deloitte

As with most forecasts these figures are likely to be wrong but it's directionally accurate to say the influence of mobile on traditiona retail will grow dramatically.  

What's interesting about the first chart above is how progressively more people use their smartphones as they approach "shopping day." This argues that retailers can provide mobile sites and apps that will support and address consumer needs along a spectrum of time and need: when they're planning to shop to when they're actually in the store.

Mobile apps can provide information that supports the sales and customer service function in stores. (Store and inventory maps could help customers find products; out of stock intems could be ordered for home delivery.) These things can be combined with loyalty incentives and even (eventually) mobile payments in stores. US retailer JCPenney, for example, is ditching its current POS and cash register systems for mobile payments and new payment kiosks. 

The larger point is that a great mobile retail app can improve and enhance the customer experience. Retailers don't have to fear mobile.

As Deloitte commented in its report, mobile can increase in-store sales: "Our survey shows that 85% of consumers surveyed who used a retailer’s native app or site during their most recent shopping trip actually made a purchase that day, compared to only 64 percent who didn’t use the retailer’s app or site."

Survey: Most Consumers Using Tablets 1 to 4 Hours Daily

Last week Adobe released a report, based on US consumer survey data (n=1,200), about smartphones, tablets and user behavior. There are numerous findings in the document.

Some of the most interesting concern the specific features or functionality that would help consumers buy via mobile devices (chart below). There were also numerous complaints about the speed of mobile websites (load times) and poor site navigation as areas for improvement. 

I'm not going to dig deeply into design and functionality related findings, which amount to specific product recommendations for e-tailers and developers. Most of my focus here will be on tablet usage.

Most Adobe survey respondents reported using tablets "a few hours every week" or at least 1- 4 hours daily. The array of answers is very awkward and probably confused some of the respondents and results accordingly. Previously (October 2011) Pew found that 77% of survey respondents used their tablets daily. As a general matter people report very high levels of tablet engagement and daily usage (at least of the iPad). 

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Like many other surveys before it, the Adobe data also show that the majority of tablet owners use their devices at home. As I've argued in the past this may change somewhat as the 7-inch tablet category gains momentum. That remains to be seen however.

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The most common activities on tablets were email, games, shopping, reading and video viewing. This is generally consistent with other data, however the video viewing response rates in this survey are somewhat lower as is the amount of news consumption. Pew survey data indicate that 53% of tablet owners consume news on their iPads/tablets on a daily basis. 

Adobe neglected to ask about tablet substitution for PC usage. Several surveys make clear that people who own iPads are using their PCs somewhat less to a lot less than prior to owning a tablet.

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Adobe's survey showed that people are also conducting e-commerce on their devices. Nothing new there. Unfortunately the responses aren't broken out by tablet vs. smartphone. If so we'd probably see much more activity on tablets: smartphones are for research/shopping, tablets are for buying. 

The data in the following chart reflect the cumulative value of e-commerce spending over the past year, not average purchase value.

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Finally, 60% to 70% of Adobe's respondents said they'd never clicked on a mobile ad. Adobe sees the glass "half full" and says, "A high percentage of consumers surveyed report that they are clicking through mobile ads presented in both mobile websites and apps, with 42% clicking through ads on mobile websites, and 37% clicking through ads on mobile apps." 

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Here's some additional color from Adobe's analysis of the data about mobile ad response: 

Consumers are reporting that a majority of advertisers are providing mobile-optimized experiences when they click through ads on both mobile websites (73%) and mobile apps (77%), suggesting that optimization of mobile ad content appears to be prevalent. Men are more likely to click through on mobile ads presented within mobile apps than women (42% versus 32%). Prioritizing a testing roadmap to include campaigns that target men could yield a strong opportunity for conversion optimization.

My anecdotal observation is that still a large percentage of mobile-ad landing pages and sites are not optimized for mobile devices.

Smartphone Demand Slips, Carrier Loyalty Trumps Smartphone OS

Yesterday I posted data from Chetan Sharma (from US carriers) that reflected growing smartphone demand and waning demand for feature phones. However Gartner's latest handset sales data reflects a decline in smartphone sales from last quarter: 

Worldwide sales of mobile phones to end users reached 419 million units in the second quarter of 2012, a 2.3 percent decline from the second quarter of 2011, according to Gartner, Inc. Smartphone sales accounted for 36.7 percent of total mobile phone sales and grew 42.7 percent in the second quarter of 2012.

Unlike other handset figures in the market these data represent actual handset sales vs. "shipments." Samsung is now the global market leader, followed by Nokia and then Apple. Nokia's share is now just under 20% of global handset sales. Half of Samsung's 90 million unit sales were smartphones according to Gartner. 

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By contrast the firm said that demand for the iPhone weakened, "as sales fell 12.6 percent from the first quarter of 2012, but grew 47.4 percent year on year." This was reflected in Apple's Q2 earnings, which missed expectations based on lower iPhone sales. The suggestion is that consumers are waiting for the next iPhone to be released. 

In a related bit of data, gadget blog The Verge published results of a survey conducted by Apple at some point in the past (date unreported). The sample size was very small (n=89). The data are being exposed as part of the Apple-Samsung IP trial going on now. The survey asks why users chose an Android device over an iPhone.

Top reasons for buying an Android among those who considered an iPhone

  • Wanted to stay with wireless service provider -- 48%
  • Trusted the Google brand -- 36%
  • Preferred larger screen -- 30% 
  • Preferred the Android market for apps -- 27% 
  • Wanted better integration with Google services -- 26%
  • Wanted the latest and greatest smartphone -- 26%
  • Wanted GPS turn-by-turn navigation -- 25%
  • Wanted the latest technology -- 25%

The fact that the top reason for choosing Android is "wanted to stay with wireless service provider" indicates this survey was probably conducted before Verizon obtained the iPhone, which was in early 2011. The iPhone is now available from all major US carriers, except T-Mobile, as well as several pre-paid carriers. There's enormous pressure for Apple to deliver an exciting new piece of hardware when the next iPhone is announced in September. 

Returning to the Gartner data, the firm said that Nokia is under pressure at both ends of the market. Low-cost Chinese OEMs are hurting the company's feature phone business, while its "Lumia devices continue to struggle to find a place in consumers' minds as a replacement for Android." 

Study: Most Mobile Device Usage at Home

Late last week Google released data (captured and collected by Compete) about the role of digital media, mobile devices and video in US consumers' apparel shopping habits. Overall the data reflect the now many influences operating on consumer decision-making. It also shows how traditional media still play a meaningful role in purchase behavior: they create awareness and stimulate further research on digital devices. 

But rather than identifying "which 50%" of the media spend is truly effective, it seems that it is getting progressively more complicated for marketers and correspondingly difficult to correctly attribute sales or "conversions" to specific campaigns.

Q: How soon after the last time you saw or heard each of the following types of apparel ads did you look up the advertiser online to get more information?

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The Google-sponsored research, as mentioned, offers a range of findings. Below I examine some of the mobile-specific data.

Q: Which of the following online sources did you access on your mobile phone?

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The largest single category in the slide above is search. Google uses this data in part to impliedly make the case for mobile search advertising. But the more interesting interpretation of this slide is that search penetration on mobile devices (in this study and apparel category) is far less than on the PC where as much as 95% of the online population uses search engines. (There are other data showing greater mobile search usage.)

In the slide below, echoing lots of other data, most mobile consumers are comparing prices, looking for deals and reading product reviews on their phones (and tablets). 

Q: Which of the following did you do on your mobile device while researching or shopping for apparel?

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One thing that's interesting about the findings of this Google-Compete study is the fact that most of the mobile usage happened at home vs. any other location. At least among apparel shoppers, fewer of them are using their devices in stores than other survey data have shown. In other surveys numbers have been as high as 80% - 90% of smartphone owners using devices while in retail stores for various purposes. 

Q: From which of the following locations did you use your mobile device(s) (e.g., mobile phone and/or tablet) to shop for apparel?

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The fact that tablets owners and tablet usage are included in these findings may account for the smaller in-store usage figures. In addition, the sample size was relatively small (n=161). Regardless, it's accurate to point out that a considerable amount of smartphone usage happens at home. Accordingly, marketers cannot and should not assume that smartphone users are always "out and about" when consulting their devices. 

Though not explored in this study, it's also generally true that mobile research is followed up by online or in-store (rather than mobile) purchases.