Data And Forecasts

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?

Screen Shot 2012-08-13 at 9.44.06 PM

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?

Screen Shot 2012-08-13 at 9.22.44 PM

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?

 Screen Shot 2012-08-13 at 9.23.23 PM

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?

Screen Shot 2012-08-13 at 9.22.18 PM

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.

The Decline of Voice, WiFi Tablets and Other Carrier Data from 1H 2012

Mobile industry and carrier watcher Chetan Sharma has pulled together mostly carrier-published data for a mid-year update across a range of topics relevant to the wireless industry. I pulled four of his slides below; however you can see the full presentation here.

The first slide below shows increasing smartphone penetration in the US and abroad. No surprise here; this has been in the survey data for months. In Q2 smartphone sales exceeded 70% of new handset sales in the US.

Screen Shot 2012-08-13 at 8.01.50 PM

Outside the US smartphone penetration isn't rising quite as fast. However it will accelerate and US smartphone growth will start to slow over the next 12 to 24 months. Feature phone sales in the US are now clearly in the minority.

The next slide shows handset market share by manufacturer, with feature phone sales representing only about 30% of total handset sales this year.

Screen Shot 2012-08-13 at 8.03.02 PM

Particularly striking in the chart above are the following:

  • The rapid decline of feature phone sales since 2010 (orange)
  • The decline of RIM over the same period (green) 
  • The amazing growth of Samsung (purple), now dominating smartphone and Android sales in the US
  • The relative flatness of Apple's overall share (red)

Screen Shot 2012-08-13 at 8.04.29 PM

The graphic above shows the relative shares of voice and data on US carrier networks. Data, in red, now entirely eclipses voice. In 2009 the two were had nearly equal shares of traffic on carrier networks.

Finally, the following chart shows the ratio of WiFi-only tablets tablet sales with carrier network connections.

Screen Shot 2012-08-13 at 8.03.43 PM

I'm drawing a few inferences but it appears the data show consumers are avoiding additional carrier fees and service plans, preferring to run tablets on WiFi networks. Notwithstanding some of the new shared data plans it appears that carriers will not derive significant new revenues from the growth of tablets.

With nearly 50 million tablets in the US market, carrier-networked devices constitute roughly 8% of the total. The lure of discounted devices in exchange for two-year contract commitments isn't succeeding in getting customers to pay additional carrier fees. Beyond basic consumer resistance to new fees, the $199 Kindle Fire, Nexus 7 and potentially forthcoming 7-inch iPad, undermine the appeal of carrier discounts.    

ShopKick Kick's eBay's Mobile Butt in Time Spent with App

Nielsen has identified the top mobile shopping apps for June in the US market. The list is as follows:

  1. eBay Mobile
  2. Amazon Mobile
  3. Groupon
  4. Shopkick
  5. LivingSocial
  6. Walgreens
  7. Target
  8. RedLaser (eBay)
  9. Out of Milk Shopping List
  10. SavingStar Grocery eCoupons

While eBay and Amazon have been on top of this list since its inception, ShopKick and Walgreens are a bit of surprise to me. However it's not clear precisely how Nielsen defines the "shopping" category. 

While eBay had a little over 1 million more users than Amazon (13.16 vs. 12.12 million) the time spent with the eBay app was much more than Amazon users (1:04 vs. 18 minutes). The discrepancy can likely be explained in the fact that Amazon users are probably much more directed, looking up prices, reviews and product availability while eBay users probably browse and look at many more pages. 

Beating both by a mile was ShopKick, with three hours, 19 minutes (3:19) on average June. That kind of engagement is truly impressive. 

Travel Goes from #9 to #3 in Mobile Ad Spending in a Year

Millennial Media a couple of days ago released its latest SMART report. This one focuses on the travel vertical (like the one in July 2011). According to the data travel is now the third largest advertiser category on the Millennial network.

In Q1 2011 travel was ninth in terms of advertiser spend, while retail & restaurants was number one. The latter has now slipped to number four.

In terms of the composition of advertisers in the vertical (Chart A below), "booking agents and sites" remains the largest single sub-category. However it now represents a larger percentage of spend than last year (47% in 2011 vs. 57% in 2012). The remainder of the sub-categories are largely the same, although there have been some shifts in the overall share of spend. 

Screen Shot 2012-08-01 at 11.49.01 AM

As mentioned, Chart A below reflects the advertiser composition of the travel category on Millennial's network. Chart B is the same data from one year ago.

Screen Shot 2012-08-01 at 10.40.56 AM

Screen Shot 2012-08-01 at 11.36.48 AM

Finally the actions that travel advertisers were seeking to drive consist mostly of mobile app downloads. That in turn suggests mobile booking and e-commerce or loyalty/CRM functions. Surprisingly, relatively few of advertisers are seeking drive telephone calls, which is a major way that travel companies still do business. 

Screen Shot 2012-08-01 at 10.42.07 AM

Mobile to Be 25% of E-Commerce in Five Years? Not So Fast

ABI Research is projecting that mobile devices will account for just under one quarter (24.4%) of all e-commerce by 2017. If "mobile" is defined to include tablets, then maybe. But if we're talking about smartphones largely or exclusively there's a long way to go before that happens.

Despite the fact that the data now show a majority of smartphone users have made purchases on their devices, most people don't routinely engage in e-commerce via smartphones. Security fears and the problem of entering credit card numbers are major barriers to so-called "m-commerce." Tablets by contrast are driving lots of purchase behavior. 

A majority of smartphone owners (80% to 90%) use their devices in stores to check prices and get reviews and product information. However most don't go on to buy -- unless it's through eBay or Amazon. 

Screen Shot 2012-08-01 at 10.22.34 AM

As a general matter, if people are going to buy "online," they later go to their PCs and make purchases. Nielsen data, compiled by eMarketer, show that a minority of users (5% of smartphone owners) are buying things directly through mobile devices -- in this case in response to a mobile ad. But these data are also reflective of the general fact that most people don't buy on smartphones. 

According to Nielsen the top mobile "shopping" apps are the following

  1. eBay Mobile
  2. Amazon Mobile
  3. Groupon
  4. ShopKick

Amazon and eBay in particular have invested hugely in mobile and it has paid off -- literally. Amazon in particular has your credit card on file and can enable a mobile transaction with a single click.

By contrast, most e-commerce sellers lag far behind these leaders. And to drive the kind of shopping volume that ABI is projecting the "credit card problem" needs to be solved. Large retailers with whom shoppers have direct relationships (e.g., Target, Macys, Wal-Mart) can store credit cards on file and remove friction accordingly. 

However "no-name" e-commerce sellers are not going to be able to participate in smartphone-based commerce unless they address the payments problem, which could be via PayPal or using a solution such as the one offered by Card.io. Indeed, it's far from clear that the ABI prediction will come to pass.

We're probably looking at a situation for the medium term foreseeable future where smartphones are aggressively used by consumers for research and price comparisons but generally not used for conventional e-commerce transactions except in select situations such as I've described. 

US Smartphone Ownership Now 55%, 'Second Screen' Phenomenon Nearing 90%

According to Nielsen's latest data, 55% of US mobile phone owners now have smartphone phones. Previously comScore reported that fully half of feature phone owners buying new phones were upgrading to smartphones (a majority to Android devices). Nielsen says that two-thirds of new mobile phone buyers are opting for smartphones. It's likely therefore that smartphone ownership will reach at least 60% in the US by the end of Q4. 

Data reflect that the overwhelming majority of smartphone owners access the mobile Internet. Accordingly, smartphone penetration is generally equivalent to mobile Internet penetration. 

Screen Shot 2012-07-31 at 8.28.26 AM

The smartphone audience is creeping closer to PC audience levels. By the end of 2012, if smartphone penetration reaches 60%, there will be nearly 150 million users in the US. Nielsen says that mobile audience is 237 million subscribers, while comScore puts it at 234 million. These figures are probably slightly low. A better "base" is closer to 250 million, although CTIA says there are more than 300 million wireless subscriptions in the US (indicating some level of duplication). 

 Screen Shot 2012-07-31 at 8.44.00 AM

According to Nielsen, time with apps (vs. the mobile web) has increased from 72% to 81%. In other words, people are spending only 19% of their time on the mobile web. This flies in the face of the "cross platform" conventional wisdom which argues: build an HTML5 app instead of native apps because it will provide greater reach.

The amount of time consumed by the top 50 apps has apparently decreased, which means people are spending more time with a wider range of apps. 

Screen Shot 2012-07-31 at 8.30.22 AM

Among the top 15 apps, 12 have a "social and/or local component." Straddling the categories are Twitter, Facebook and top photo-sharing site and social network Instagram (bought by Facebook). 

Screen Shot 2012-07-31 at 8.45.32 AM

The Nielsen data also reveal the increasing degree to which smartphone and tablet owners now use these devices while watching conventional TV. Large majorities approaching 90% now use their mobile devices simultaneously according to Nielsen. I suspect these numbers are somewhat higher than actual usage, but the findings argue that TV advertisers must be conscious of these "second screens" when creating ad content.  

  Screen Shot 2012-07-31 at 8.25.37 AM

The data below report that people are doing various things on smartphones and tablets "during the program." However I suspect much of this activity amounts to ad avoidance. Meaningful minorities of people appear to be responding to TV ad content by doing searches or looking up product information. 

Screen Shot 2012-07-31 at 8.43.05 AM

Finally, according to Q3 2011 Nielsen data, mobile ads are the least trusted form of advertising. Paradoxically, however, they tend to be more effective than other ad categories, especially PC advertising. Yet mobile ads have quite a way to go before they reach trust levels comparable to conventional media ads.

Screen Shot 2012-07-31 at 8.41.38 AM

Mobile Ad Survey: Coupons Still King, Brands Mostly Missing the Boat

Mobile ad network HipCricket released its latest mobile advertising survey. The poll of 650 US mobile phone owners asked a range of questions about mobile advertising and device ownership. Among the survey respondents, 73% said they owned smartphones while 43% reported owning tablets.

These percentages are higher than US national averages, which are closer to 50% and 30% respectively. Among smartphone owners, the HipCricket survey was comprised of 43% iPhones, 38% Android handsets and 16% BlackBerry devices. 

The survey found that those with higher incomes were the most engaged with mobile advertising: 

  • 55% of those who have clicked on a mobile advertisement have an annual income of more than $75,000.
  • 29% of those who have clicked on a mobile advertisement have an income of more than $100,000.
  • 45% of those with an income of more than $75,000 have made a purchase as the result of a mobile ad.

Younger users (25-34) were also more engaged with mobile ads than the overall group. Among this group, 70% "have made a purchase as a direct result of a mobile ad." In addition 48% of these users "think more positively about their favorite brands after interacting with them via their mobile device," which was "significantly more than any other age group."

Below are a selection of the charts from the survey. The first one indicates the most frequently encountered mobile ad categories. SMS ads come in at a surprising number two, just above ads in mobile apps:  

Screen Shot 2012-07-31 at 7.47.48 AM

Just under a third of these users had redeemed a mobile coupon, although a substantial number hand "never engaged" with a mobile ad.

Screen Shot 2012-07-31 at 7.48.11 AM

The principal reason survey respondents did not click on or otherwise engage with mobile ads was due to a lack of perceived "relevance." Interestingly there were also several security related fears associated with mobile ads (spam, source uncertainty). This is an education problem for the industry. 

Screen Shot 2012-07-31 at 7.48.22 AM

Consistent with many past surveys, offers and coupons were a major incentive for consumers to respond to mobile ads. While many brands and agencies don't want mobile advertising to be "just about coupons," it's clear that offers drive engagement. 

Screen Shot 2012-07-31 at 7.48.31 AM

HipCricket also found that most respondents' "favorite brands" were not advertising in mobile. This is clearly a missed opportunity for the brands. 

Screen Shot 2012-07-31 at 7.48.50 AM

Finally, the survey found that a large majority of respondents had made a purchase after viewing a mobile ad. 

Screen Shot 2012-07-31 at 7.47.33 AM

While self-reported data must always be "taken with a grain of salt," these survey findings reinforce a considerable body of other data in the market showing that for younger, more educated and more affluent users mobile is now a critical medium. Yet brands and major advertisers continue to miss out on a significant opportunity to reach these audiences through their failure to aggressively pursue mobile. 

Tablets Demand Attention As Separate Device Category

Last week mobile ad network inMobi released tablet survey findings, drawn from 9,600 respondents in seven international markets. US responses were just under 1,000 (904). The company asserts that "tablet use has risen quickly to 29.5 million U.S. users, 11% of the total U.S. population." 

By comparison, in January of this year the Pew Internet Project released survey data that showed 19% of US adults owned tablets (mostly iPads). And comScore released data showing that roughly 24% of smartphone owners also have tablets. If we extrapolate these numbers, the Pew data suggest that there are roughly 42 million tablet owners in the US (as of January 2012). The comScore data argue the number is closer to 56 million.

The inMobi number is too small, while the comScore number is probably too large. Pew is likely closer to the actual number of tablet users in the US at this point. However, by the end of the year it could be closing in on 70 million. 

The inMobi survey data are from a report entitled, The Role of Connected Devices in the Consumer Sales Journey. Below are some of the top-level findings: 

General consumption habits

  • Over 60% of US tablet owners spend at least 30 minutes each day accessing media content on their tablets
  • 52% use a tablet to fill what previously would have been “dead time.” 
  • 29% of US tablet users said they have reduced reading books in print.
  • 29% of tablet owners claimed they reduced surfing the internet via their PC and/or laptop.
  • 48% of respondents agree that tablets’ appealing design and accessibility make it is easier to access media content than on a PC or laptop.

Shopping and e-commerce 

  • 22% of tablet users claim they have shopped less in physical stores since purchasing a tablet
  • 55% of tablet owners make purchases on their device in an average month. 

According to the survey data, "tablets have become the preferred device at home and smartphones are preferred on the go." These devices play different roles in the "purchase consideration cycle." Tablets are used in a "lean back" mode in the evenings and on weekends, almost exclusively at home. 

Screen shot 2012-07-02 at 7.45.36 PM

A recent tablet-centric e-commerce report from Monetate also observed that tablets are used primarily at home, as a PC substitute, and offered the following advice:

With increases in website traffic from devices such as the iPad and Kindle Fire, e-commerce businesses must treat customers using tablets as a unique audience segment. Tablet users expect a different experience that takes advantage of their devices’ features, such as touch/swipe functionality and screen rotation.

Accordingly it's not enough to simply assume the PC site will translate onto tablets. While non-flash PC sites often render relatively well on tablets they typically fail to take full advantage of the tablet opportunity.

Monetate: Non-PC Devices to Grab 25% of Traffic in Less than a Year

E-commerce optimization firm Monetate has published its latest "E-commerce Quarterly" report. The report addresses a number of issues including social commerce. For purposes of this post, I'll focus on the mobile and tablet findings.

The data in the report are drawn from "analyzing a random sample from over 100 million online shopping sessions on 100-plus major e-commerce websites." Here are some of the major findings: 

  • 88% of website visits now come from PCs, down from 92.1% in the prior quarter.
  • Tablet traffic increased 348% in one year, while visits from smartphones increased 117% during the same time period.
  • More than 6% of all website visits now come from tablet users; 95% of this traffic is from iPads.

Website Traffic Sources

Screen shot 2012-07-02 at 8.30.13 AM

Q1 2012 Conversion Rates by Device Category

Screen shot 2012-07-02 at 8.30.34 AM

Compare similar data from Marin Software. Directionally they're almost identical to the Monetate findings.

http://searchengineland.com/figz/wp-content/seloads/2012/03/Screen-shot-2012-03-26-at-5.10.22-AM-600x238.png

What both the Marin and Monetate conversion findings lack, however, is data about offline conversions. If those were tracked and factored in I suspect we'd see mobile conversion figures outstrip the PC and potentially tablets.

Monetate's focus is strictly on e-commerce conversions. But most people don't buy conventional products on their smartphone, though they may do things like banking transactions or buy apps or rent movies. 

The use cases for smartphone are different than PCs and tablets, which are mostly used at home and often as a substitute for the PC. According to Monetate's report:

It seems clear that smartphone users are either doing more comparison shopping or are dissatisfied with the user experience. In fact, a recent study from comScore Inc., Shop.org, and The Partnering Group revealed that 43% of smartphone owners have used their mobile device while in a store for a shopping purpose.

Monetate also argues, despite that at-home usage of tablets, that there's a different user expectation vs. the PC experience:

With increases in website traffic from devices such as the iPad and Kindle Fire, e-commerce businesses must treat customers using tablets as a unique audience segment. Tablet users expect a different experience that takes advantage of their devices’ features, such as touch/swipe functionality and screen rotation.

This argues in favor of tablet apps as well as a tablet-optimized HTML5 site. Finally, the firm predicts that at current growth rates, "website traffic from PC users will dip below 75% in less than one year" -- meaning that smartphones and tablets will represent 25% of site traffic. 

Pew: 45% of Younger Users Access the Internet Primarily via Mobile

The US Center for Disease Control tracks the number of mobile-only and mostly mobile households. Today 30% of US homes have no landline with an additional percentage making and receiving most of their calls via mobile. In that scenario the landline becomes a kind of "spamcatcher" reserved for telemarketers and fundraising calls.

The combined number of mobile-only and mostly mobile homes in the US is now above 45%. That's an amazing statistic if you think about it. 

An analogous, emerging statistic is the number of people who primarily access the Internet on their mobile phones. This morning the Pew Internet Project published survey data that show 17% of all mobile phone owners use their phones as their primary Internet access device. However, if the population is narrowed to all mobile phone owners who access the mobile Internet (55% of mobile phone owners according to Pew) the "primarily mobile" percentage jumps to 31%.

In other words, according to Pew, "31% of these current cell internet users say that they mostly go online using their cell phone, and not using some other device such as a desktop or laptop computer." Even more striking, 45% of 18-29 year olds who access the Internet on their phones are in this "primarily mobile" category.

We found previously (n=1,504) that 17.6% of Internet users went online primarily via a non-PC device (smartphone/tablet). Regardless, these numbers will will only grow larger over time. 

Chart 1

Tablet Market Exploding: How Is It Affecting PC Usage?

In January of this year the Pew Internet Project released survey data that showed 19% of US adults owning tablets (iPads). That was up from just 10% only a month before in December. Now comScore has released data showing that roughly 24% of smartphone owners also have tablets.

If we extrapolate these numbers, the Pew data suggest that there are roughly 42 million tablet owners in the US (as of January 2012). The comScore data argue the number is now 55 million. These figures seem entirely reasonable. Apple CEO Tim Cook reported 55 million iPads sold to date in February. 

Screen shot 2012-06-11 at 8.25.25 AM

People use the term "tablet" but the market remains largely about the iPad. The only other two models with any traction are the Kindle Fire and the Samsung Galaxy Tab. According to Gartner Apple's share of the tablet market will be 61.4% at the end of the year. IDC says Apple had a 68% share of the global tablet market in Q1 2012.

Both of these figures are incorrect and largely based on shipment estimates. Shipments don't equal sales to consumers. 

Perhaps I should say instead that people may be buying other devices but it still doesn't matter. According to ad network Chitika, based on an analysis of millions of impressions in the US, the iPad "accounted for 94.64% of all tablet based traffic." By contrast Chitika said that the nearest competitor, the Samsung Galaxy tablet, "boasts a lack luster market share of 1.22%."  

Late last week ad network InMobi released its own tablet data, showing gains by the Kindle Fire and total Android tablet ad-impression share of 28%. That argues the iPad controls a 72% share of the total tablet market. 

Screen shot 2012-06-11 at 8.24.43 AM

Screen shot 2012-06-11 at 8.24.34 AM

We're likely to hear an update of tablet numbers this morning from Tim Cook during the Apple WWDC keynote. 

Back to the comScore tablet data: the company says that just over half of tablet owners are watching video on the device, while nearly 10% are doing so every day. 

Screen shot 2012-06-11 at 8.25.17 AM

A year ago in March AdMob found, based on a survey, that 77% of tablet owners were using their PCs less. In addition 28% of respondents said that the tablet had become their "primary computer." Clearly tablet ownership does cannibalize PC usage, while smartphone ownership may complement it. Roughly 80% to 90% of tablets are used mainly at home. 

Screen shot 2012-06-11 at 8.45.01 AM

Once Microsoft puts Office on the iPad it will become a true PC substitute.

Gadget Forecaster Says Android Has Peaked, Is Bullish on Windows Phones

Earlier today we got a refreshed device forecast from IDC. The firm believes that Android's market share will peak this year globally at 61% and decline to 52.9% by 2016. It sees Apple basically maintaining its current market share, while the company is bullish on Windows Phones.

Reiterating the notion that Windows Phones will dramatically gain share, IDC says they will surpass the iPhone by 2016 and ascend to a 19.2% market share. Here's how IDC justifies that prediction:

Windows Phone 7/Windows Mobile will gain share despite a slow start. Windows Phone 7/Windows Mobile will be aided by Nokia's strength in key emerging markets. IDC expects it to be the number 2 OS with more than 19% share in 2016, assuming Nokia's foothold in emerging markets is maintained. 

Screen shot 2012-06-06 at 9.44.31 PM

Source: IDC, June 2012

The idea is that low-cost Windows Phones, made by Nokia, will do well in China, India and other developing markets. Yet so far there's really no indication that prediction will come to pass. Sales have been "mixed" at best. I have long believed that Nokia Windows Phones would enjoy modest success but not become the breakout product that both companies need. 

Today ZDNet columnist Matthew Miller encouraged Microsoft to buy Nokia and pursue an Apple-like approach to the smartphone market. Indeed, Nokia as we know it today is quite unlikely to exist in 2016 let alone capture 20% of the smartphone market. 

IAB: Global Mobile Ad Spend in 2011 Was $5.3B, Paid Search the Largest Chunk

This morning the IAB released estimates of mobile advertising spending in 2011 on a global basis. Previously the trade group said that US mobile advertising was worth $1.6 billion in 2011.

According to the IAB mobile search advertising made up the largest component of US and international mobile advertising -- much like PC ad spending. It constituted 62% of global mobile ad spending in 2011 according to the IAB. That compares with roughly 46% of total ad spending (if memory serves me) on the PC. Almost all this money goes to Google. 

Below is the IAB chart showing the breakdown by region and ad unit category. 

Screen shot 2012-06-06 at 8.04.08 AM

We had previously forecast that combined North American and European mobile advertising revenue would be worth just over $5 billion in 2012. Assuming these IAB numbers are based on some sort of actual empirical evidence and not simply vague estimates the combined North American and European mobile ad markets were worth $2.3 billion last year. Our estimate for 2011 was $3.1 billion, about $800 million too optimistic. 

Still not bad. 

I suspect by this time next year we'll see some impressive revenue growth, making our 2012 numbers pretty close to actuals. Again, Google is the biggest single beneficiary of all this mobile spending on a global basis.

Deals Once Again Most Desired Form of Mobile Advertising

Ad network Mojiva released some data last week about usage of mobile devices during the auto-shopping process. For example the ad network said, "More than two thirds (69%) of consumers are interested in using their mobile phone to research buying or leasing a vehicle." This was based on a small survey of just over 200 US consumers.

What was most interesting to me about the data is this chart: 

Screen shot 2012-06-04 at 12.14.36 PM

Question: "What information would you find most valuable in a mobile ad?" The answer: "deals and offers."

This is something of a "generic answer" for consumers. Deals and coupons are typically the preferred form of mobile advertising when consumers are surveyed according to Opus data, and data from InsightExpress and Luth Research among others. Deals are the most common reason consumers "Like" brands on Facebook (Nielsen, October 2011). The slide above simply reinforces the other findings.  

In the real world consumer attitudes and behavior often diverge -- so the ads most clicked on or investigated by consumers may not always be offer or coupon oriented ads. But the data above reinforce and illustrate consumer interests and motivations. 

The End of the Spam Line: 45.4% in US Are Mobile Only or Mostly Mobile

I was recently speaking with a friend who said that he and his wife had eliminated their landline. I was surprised because this friend is successful and it's not a financial issue. Cost is often cited among younger people who've jettisoned their landlines.

"We were tired of getting all these telemarketing calls," he told me. In other words, his landline had become a "spam line." 

That's also the case for me and probably most of the people reading this. Our mobile numbers are for the people we need and want to talk to, landlines are for spam and others we don't really care about. Most of the calls we receive at home are telemarketers or fundraising calls in one form or another.  

I looked up the latest CDC statistics (.pdf) on mobile only households and found that just under 30% (29.7%) of American households are mobile only and have no landline. According to the data, "nearly one of every six American homes (15.7%) received all or almost all calls on wireless telephones." Accordingly 45.4% of US homes are mostly mobile or mobile exclusively. 

This is staggering in a way. Just under half of American households are without a landline or simply ignore their landlines. For that 16% who basically ignore their landlines it's only a matter of time before they cancel. This was my friend's situation; he had considered canceling his landline for a couple of years before he actually did it.

It's worth pointing out these data are from 2010. These numbers are likely to be higher now. They're positively correlated, I would imagine, with smartphone adoption as well. 

There are all sorts of implications of these figures, for telemarketing (no robodialing allowed) and political polling (no longer representative if landline centric) -- to name just two areas. 

There are some countervailing forces that may slow the abandonment of landlines. Among them the carrier move toward tiered data plans; calls will be part of data relatively soon. People using only their mobile phones to talk could be subject to overages accordingly. In addition, businesses will retain landlines in many cases. Some bundling of landlines with other serivces (e.g., cable "triple play") will also retain landlines for some. However they will be increasingly ignored. 

Regardless, the next tranche of CDC data will likely show that mostly mobile and mobile only homes have crossed the 50% threshold in the US.  

Mobile CPMs Just a Fraction of PC Display Costs

Former Wall Street analyst Mary Meeker just did one of her famous data dumps at the D10 conference. The 100+ slide deck is a discussion of "Internet trends." However I just want to focus on three slides.

The first shows that mobile Internet traffic in India just this month has surpassed PC Internet traffic. This is a trend that will replicate itself in markets all over the globe as time goes on. It will take longer for this to happen in developed countries than developing markets but it will happen. 

Marketers are going to be shocked by this as in market after market the PC Internet will become subordinate to mobile.  

Screen shot 2012-05-30 at 12.04.07 PM

The second slide shows that CPM rates in mobile are much less than on the PC. This is bad news for everyone except advertisers as more users migrate to mobile devices for much of their Internet usage. 

Screen shot 2012-05-30 at 12.03.53 PM

However compare our recent ad network test, which showed that the local networks (xAd, LSN) were able to command a much higher CPM. 

This shows us that premium or highly targeted mobile inventory will be able to deliver PC-like, or potentially higher, CPMs. 

The final Meeker slide I wanted to discuss is one of those familiar monetization vs. time spent slides. Flurry Analytics has a good one as well. Meeker points out a potentially $20 billion digital advertising opportunity over time, as PC usage migrates and ad spending catches up to consumer usage. 

Screen shot 2012-05-30 at 12.04.16 PM

The "X variable" is time, however. The logic is sound but the timeframe is less certain.

It took many years for the PC Internet to start to equalize time spent and digital ad spend. Mobile is evolving faster than the PC Internet but it may well be several years before mobile advertising begins to approach user engagement/time spent levels. 

Clearly what's going on right now is that advertisers are not valuing mobile impressions as much as PC impressions. In fact mobile impressions are much more valuable than PC impressions -- for both awareness and direct response.

As mobile becomes the primary Internet access vehicle for many more people marketers will be compelled to wake up, and competition should intensify for mobile ad impressions, especially well targeted impressions. In the interim it's a buying opportunity for smart marketers who right now can get high quality eye balls at a fraction of the cost of the PC Internet. 

Nielsen: Average Number of Apps per Smartphone Now 41

Last week Nielsen released data comparing US smartphone users' app adoption and usage vs. last year. Nielsen says that the average US smartphone owner in 2012 has 41 apps on his/her phone vs. 32 apps in 2011:

In just a year, the average number of apps per smartphone has jumped 28 percent, from 32 apps to 41. Not only is the 2012 smartphone owner downloading more apps, they are increasingly spending more time using them vs. using the mobile web — about 10 percent more than last year.

Nielsen also says that smartphone owners spend roughly 39 minutes a day using apps (vs. 37 last year). However this finding is much lower than Flurry's earlier declaration that smartphone owners spent 94 minutes per day in apps. It's not clear why these numbers should be so far apart. It may be that Flurry's data are behavioral (analytics based) and Nielsen's figures are based on self-reported survey data -- in which case the former would be more accurate. However, this is speculation. 

Flurry_App_versus_WebUsage_Dec2011

Earlier this month comScore released data that asserted "4 in every 5 mobile media minutes" are spent in apps vs. the mobile browser. 

According to Nielsen the top five mobile apps across smartphone platforms are Facebook, YouTube, Android Market, Google Search and Gmail. Finally, the measurement firm added that its surveys show users continue to be concerned about mobile privacy and location sharing: 

[P]rivacy continues to be a concern with the vast majority (70% in 2011 and 73% in 2012) expressing concern over personal data collection and 55 percent wary of sharing information about their location via smartphone apps.

Millennial: iOS Gains Share, Feature Phones Decline in Device Mix Report

Millennial Media puts out regular data about activity on its large ad network. However that data typically lacks historical context. It's a snapshot or a moment in time. It's more interesting to examine movement and trends over time. 

This morning the Q1 Mobile Mix report came out. I've gone back to the equivalent report a year ago to compare metrics. In one instance the current report does compare smartphone and tablet penetration vs. a year ago. The most striking thing is that feature phone share on Millennial's network has declined from 23% to 7% since last year. By Q3 or Q4 it's likely to be below 5%. 

Screen shot 2012-05-24 at 9.03.58 AM

In terms of operating system share, iOS and Windows have gained share relative to their positions a year ago. Apple's operating system is bolstered by the iPad. In Q1 2011 the top two tablets were the iPad and the Samsung Galaxy Tab. In Q1 2012 the top three tablets are the iPad, Galaxy Tab and Kindle Fire. Unfortunately, however, the report doesn't indicate volume of impressions by tablet. 

Screen shot 2012-05-24 at 9.16.34 AM

Top app categories haven't changed that much in a year. Weather has fallen somewhat and Travel has appeared in the top 10.

Screen shot 2012-05-24 at 9.24.58 AM

Finally (though it may be hard to read) the list of Millennial's top 20 devices is pretty similar to last year. The iPhone is the top device and the rest are mostly Android devices. However, very surprisingly, several more RIM devices appear in the 2012 list vs. the one from last year. Given the continued delcine in RIM's sales there's no clear explanation for why RIM has gained positions.

Screen shot 2012-05-24 at 9.33.33 AM

Despite growing to 3% of Millennial's network overall impression share, no Windows Phones appear on the 2012 list. 

NPD: Apple Maintains Top "PC" Position on Strength of iPad

According to NPD, Apple remains the top "PC" manufacturer globally, largely because of the iPad. According to the NPD shipments (not sales) data, Apple had a 22.5% share of the PC market. Overall NPD said "PC" shipments (including tablets) grew 30% year over year.

However Dell reported earnings this week and missed analysts' estimates because of slumping PC sales. Dell was hurt by smartphone and iPad sales, which have taken the place of PC replacements for many consumers. 

Among tablet makers, NPD said that Apple had a 62.8% share. However these estimates -- based on shipments, not sales -- are undermined by various analytics firms that report well over 90% of tablet-generated traffic is coming from the iPad. 

Below are the NPD charts showing PC and tablet shipments. 

 Screen shot 2012-05-23 at 9.40.05 AM

Screen shot 2012-05-23 at 9.39.54 AM

Source: NPD Group 

While tablets increasingly can function as PCs it's a mistake to include them in the conventional PC counts. It's part of a different category of devices. By including tablets into PC forecasts and estimates it obscures the true state of the PC market. 

Marchex: Directories Deliver Highest % of New Customers, Mobile Display Lowest

Last year survey data were released that asserted "47% of mobile app users . . . click/tap on mobile ads more often by mistake than they do on purpose." In the subsequent write-ups that often turned into the broader claim that "half of all mobile ad clicks are unintended." 

With all the touchscreen smartphones out there a high level of accidental clicks isn't hard to imagine.

Now comes a kind of parallel but stronger finding from Marchex that argues 76% of all calls coming from mobile display ads are bad calls: pocket dials or otherwise accidental. The data aren't based on survey information but an analysis of more than 200,000 calls on the company's network. These calls were part of advertising campaigns to company runs for clients. 

Marchex also analyzed the percentage of new and existing customer calls by channel. Below is a chart the company generated to illustrate these findings: 

Screen shot 2012-05-21 at 9.41.17 AM

Online and mobile directory sites generated the highest percentage of new leads/customers. Marchex added that directory sites work best for advertisers with physical stores or business locations (perhaps an obvious point). Mobile display, according to the report, generated the lowest percentage of new customers and had the highest percentage of non-qualified calls, as previously indicated.

Search engines had the lowest percentage of spam but the highest percentage of existing customer calls. This suggests people repeatedly use mobile search to find phone numbers for businesses they already know.

Marchex's report also best practices advice for (national-local) marketers. One of the recommendations is that marketers look more deeply at whether calls have generated desired outcomes (e.g. sales) to determine their true ROI, and not simply rely on the top-level data: 

  1. Give consumers a variety of connection options to suit their intent, such as app downloads, QR codes, form fills and click to call
  2. Test different consumer flows for mobile calls, such as the ability to call from an ad or call from a landing page
  3. Take advantage of the fragmented media landscape with placements across a range of mobile webpages, search engines and applications
  4. Test and analyze the performance of ad campaigns across different calls to action, formats and media
  5. If possible, analyze the types of calls you are getting from ad campaigns and connect with the call center to determine whether those calls convert to sales.

Monica Ho of xAd confirmed that when call buttons are in top-level display ad creative the number of accidental calls is high. However she said that calls coming from mobile landing pages are "98-99% valid and of very high quality."