Mobile Apps Will Drive the Future of the Internet

Chris Horton
Chris Horton Digital Strategist, Synecore

Posted on July 19th 2012

Mobile Apps Will Drive the Future of the Internet

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

MARKETING TAKEAWAY

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.

time spent on mobile vs web apps

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, is 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 

   

Chris Horton

Chris Horton

Digital Strategist, Synecore

Chris Horton is a content creator and digital strategist for Minneapolis-based integrated digital marketing agency, Synecore. An avid tech enthusiast, Chris has written extensively on a number of topics relevant to the growing marketing technology industry, including SEO, inbound, content, social, mobile, email marketing, apps, online branding/PR, and Internet trends. Chris' marketing tips can be found on Synecore's Marketing Technology for Growth blog. You can connect with Chris on TwitterLinkedIn, or Google Plus, or email him at chris@synecoretech.com. Check out his new book, Digital Marketing: Integrating Strategy and Tactics with Values, published by Routledge in October of 2014.

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Comments

Dev Bhatia
Posted on July 21st 2012 at 3:58PM

Thanks, Chris. This is absolutely, spot-on right. Too often, small businesses get distracted by the noise. There are lots of new things out there, but the strongest one is mobile search. And in mobile search, setting up itself often requires a sherpa. The major search engines do not make it easy and transparent. At mTrax we're setting up our SMB clients exclusively in mobile search on Google, Yahoo, and Bing. And we set them up exclusively with click-to-call, because that's what they want: calls, not clicks. Mobile search should be compared to traditional new customer acquisition channels, like the Yellow Pages or Val-Pak. And it should be compared on a cost-per-quality-call basis. When SMBs do that, they see the need to be in mobile search quickly.

Chris Horton
Posted on August 2nd 2012 at 8:45AM

Dev,

Thanks for that real-world input! I'm seeing the click-to-call concept appearing more and more. Especially for smaller SMBs, click-to-call can be of great value, especially when it is part of a solid geo-local centric ad campaign.

I appreciate the insight!

Chris

Urban Media
Posted on August 2nd 2012 at 5:05AM

I agree, soon it will mainly be phones people use for the internet. As companies make bigger and better mobile devices, it will be made easier to use Facebook, Twitter etc. 

 

Chris Horton
Posted on August 2nd 2012 at 8:42AM

Phones and tablets, but as you point out, I think the line will blur, especially with bigger phones and smaller tablets...

Thanks for the comment!