Mobile Apps Will Drive the Future of the Internet
“If you search it, they will come.” The advertisers and marketers, that is. This is the gist of a new report from analyst firm Juniper Research predicting that revenue from mobile search and discovery will skyrocket to $15 billion by 2017 (nearly 3X the expected revenues for 2012). The report also found that mobile search and discovery (including web search, local search, augmented reality search and discovery apps) enjoys some of the highest click-through-rates and cost-per-click rates in mobile advertising.
I’d be lying if I said I was the least bit surprised.
As industry oracle Mary Meeker notes in the 2012 installment of KPCB’s annual Internet Trends report, the future is all about mobile, which currently only accounts for 10% of Internet traffic, up from just 1% in 2009. Moreover, mobile monetization is “growing rapidly,” with 71% of that growth coming from apps and 29% from advertising. In the report, Meeker also points out that advertisers looking to get the most out of their ad spend should focus on the Internet, and specifically, the mobile Internet.¹
What is fueling this obsession with mobile? Perhaps it’s because a large proportion of Americans own at least one mobile device. As of January of 2012, over 100 million Americans owned smartphones. With tablets becoming more available and affordable, tablet adoption is also skyrocketing. eMarketer predicts that over 70 million Americans will own a tablet by the end of 2012; by 2015, more than half of US Internet users will use tablets to go online.²
Why is the fact that nearly everyone in the US has a smartphone or tablet a big deal? Because these devices are mobile.
By a happy coincidence, as it turns out, so are people.
IN-STORE MOBILE USE
New research from Deloitte suggests in-store smartphone use influences 5.1% of sales. While this might not sound like a high percentage, it translates into big bucks- $159 billion in forecasted sales for 2012 alone. Deloitte predicts this number to rise dramatically in the coming years, with smartphones influencing 1 in 5 in-store purchases by 2016, equating to $689 billion in sales revenue.³
In-store mobile users are not just casually browsing the web: according the Deloitte findings, 37% of smartphone owners who used a smartphone on their last shopping trip used a 3rd-party mobile shopping application; 34% used a retailer’s dedicated app. Significantly, in-store conversion rates among shoppers that used a retailer’s dedicated app was 85%, compared to 64% for those that did not.³
LOCATION-BASED MOBILE APPS
Marketers are taking notice. A recent survey of marketers by Association of National Advertisers (ANA), found that mobile is the new marketing focus. 17% of survey respondents reported that this was their first year using mobile, and another 17% planned to start using it in the next year. Location-based apps are especially hot, with 19% of marketers expecting to employ them in the next year.⁴
Keep in mind that in 2007, the same ANA survey found that just 20% of marketers were using social media; now 90% do.⁴
As mobile device usage becomes even more massive and mainstream, users will become increasingly reliant on mobile search and discovery. This of course means that mobile ad space on various search and discovery platforms becomes a more lucrative proposition.
According to the Juniper report cited above, a large percentage of web searches on mobile are localized, but local search apps like Yelp and Poynt are a better option for both users and advertisers alike because the search experience is fully optimized for mobile, offering a simpler user interface that can be targeted to encourage purchase decision.
Aside from local search apps, retail or merchant apps will become more ubiquitous in the next few years as well. Anyone who has tried to perform a general web search on a mobile device knows that it is not a user-friendly process, often taking forever to type in a query, and then sift through an endless stream of results. Mobile apps, on the other hand, are better able to target specific actions, providing a simpler and more-relevant user experience.
As a marketer or business owner, you need to start thinking about how mobile apps can fit into your current and future marketing equation, whether it is by advertising on them, building them for your brand, or both.
Believe me, this not an exercise in futility. Eventually, perhaps very soon, mobile apps will be everywhere, driving the future of the Internet.
¹ Washington Post, “Mary Meeker’s Internet Trends Report Lands”
² eMarketer, “Tablet Shopping Growing, But Retailers Must Keep Up”
³ Marketing Charts, “Smartphones Influence 5.1% of In-Store Sales”
⁴ eMarketer, “Social Media Usage Plateaus Among Marketers”
Info-graphic courtesy of eMarketer