LSS'11: Opening Keynote: Local Social 2011 – The Paradigm Shift Picks-up Speed, by Greg Sterling


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Opening Keynote: Local Social 2011 – The Paradigm Shift Picks-up Speed.

By Greg Sterling, Senior Analyst at Internet2Go/Opus Research, Principal at Sterling Market Intelligence, Contributing Editor at SEL. Greg starts with the The SoLoMo ‘Mandala’... Sacred image of the Social-Local-Mobile universe and a symbol of our collective search for beauty and wholeness in a world of chaos and disorder.

Key Themes:
- Hype-Local: Demand, Awareness Growing
- Mobile Momentum Continues
- Social Media, SMBs& the ‘Now What?’ Problem
- Local Data Tsunami
- Payments and Real-World Analytics
- From Clicks to Transactions

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LSS'11: Opening Keynote: Local Social 2011 – The Paradigm Shift Picks-up Speed, by Greg Sterling

  1. 1. The Local Paradigm Shift 2011: „Big Trends‟ Edition Greg Sterling Opus Research/Sterling Market Intelligence November 9, 2011
  2. 2. The SoLoMo „Mandala‟ Social Local Sacred image of the Social-Local-Mobile universe and a symbol of our collective search for beauty and wholeness in a world of chaos and disorder. Mobile
  3. 3. The „Big Themes‟• Hype-Local: Demand, Awareness Growing• Mobile Momentum Continues• Social Media, SMBs& the „Now What?‟ Problem• Local Data Tsunami• Payments and Real-World Analytics• From Clicks to Transactions
  4. 4. Hype-Local: Demand,Awareness Growing
  5. 5. A Rough Timeline• Before 2000: Local was hot as part of internet-everything bubble• Before 2000 – 2007: Local misunderstood, underappreciated• After 2009: Mobile helps make local transparent and sexy• Premium product: Local impressions/calls/clicks pay/command a premium (e.g., Nexage, xAD, AT&Ti, etc.)• Not just for SMBs anymore: “86 percent of national marketers surveyed intend to look for ways to better modify, adapt, and localize their marketing content, messaging, and prospect engagement practices. Clearly, localized marketing is becoming a critical area of strategic focus and competitive advantage for brands.” (Source: CMO Council study of brands/agencies October, 2011)
  6. 6. Brands: “What localized marketing channels currently using?” In-person events 57% Social media 48% Mobile, SMS, email 44% Newspapers 41% Portals, search engines 33% Local mags 31% YP/IYP 7%, daily deals 6%Source: CMO Council October, 2011 (n=300 brands, agencies)
  7. 7. The Value of Local • In US, annual retail sales are roughly 4T USD (2.48T GBP) • 80%+ of online consumers use the internet to do product research • E-commerce is 4.6% (95% purchases happen offline)Source: US Census Bureau Q2 2011
  8. 8. Mobile Momentum Continues
  9. 9. Smartphone, Mobile Internet Growth • By 2015 more mobile/wireless internet users than fixed-line users – multiple predictions • Between 30% and 40% (or so) of “EU5” have smartphones • UK smartphone penetration 40% (50% by Q1 2012) • US smartphone penetration: 43% • In US and UK roughly 7% of Internet traffic coming from non-PC devices • US mobile internet audience now 100M usersSource: Morgan Stanley, 2010, IDC, 2011, Ofcom, comScore, Nielsen (2011)
  10. 10. Smartphones: 50%+ for Under 45 Feature phone Smartphone Others: 43% • Pew: 42% 53% 62% • comScore: 37% 57% 47% 38% Overall Smartphone (18- 44 yrs) Smartphone (25-34 yrs)Source: Nielsen, Q3 2011
  11. 11. Smartphone Ownership: by Income At least 53% penetration for those making over $75K USD (54.2K EUR)Source: Pew Internet Project, July 2011
  12. 12. Mobile vs. PC Time Spent Global mobile apps vs. web consumption, minutes per day 90 80 70 60 50 40 64 70 66 74 81 MINUTES 30 MINUTES MINUTES 20 MINUTES 43 MINUTES MINUTES 10 0 June 2010 Dec 2010 June 2011 Desktop Web iPhone/iPod TouchSources: comScore, Alexa, Flurry Analytics
  13. 13. Android Users: Apps Trump Mobile Web Mobie Web 33% Mobile apps 67% Average Android user (US) spends 56 minutes per day actively interacting with the mobile web and appsSource: Nielsen 8/11
  14. 14. Usage Concentrated in Top 10 Apps Allocation of time spent among apps Top 10 11 to 20 39% 21 to 30 43% 31 to 40 41 to 50 All others 3% 4% 8% 3% This is Android data but the pattern also holds for iPhone usersSource: Nielsen 6/11
  15. 15. Mobile Impressions Already Massive If there were advertisers sufficient to fill all the mobile app "inventory" the value of that inventory would exceed of online display advertising.Source: Flurry Analytics September, 2011
  16. 16. Tablets a 4th Screen, Mobile-PC Hybrid• Total tablets “in the market” as of end of Q3: 46 million (not counting eReaders)• 40 million iPads (sold); 6 million Android tablets (shipped) – 95% of tablet traffic coming from iPad• T-commerce: 48% of US tablet owners made a purchase in past month (October, 2011) 15% iPads Android 85%Source:Company statements, comScore Q3 2011
  17. 17. Tablets Cannibalizing PC Usage Since you started using a tablet, has your desktop/laptop usage decreased? 77% 28% of respondents said that the tablet is their primary computer 23% Yes NoSource: Google-AdMob, March 2011
  18. 18. Mobile/Tablet Access „Primary‟ for Many• Pew Internet Project (July 2011): - 87% use internet on their phones - 68% of smartphone owners go online daily - 25%“mostly” use their phones to access internet• Google-AdMob: 40% of iPhone/iPod Touch owners (n=7,300) go online more often on their mobile devices than via PC (2009)• Mobile will be a primary access method for a substantial segment of the population within 3-5 years
  19. 19. Siri Mainstreams the „Voice Interface‟ Siri is to voice commands and “voice search” what the iPhone was to smartphones in 2007: a breakthrough experience that forces competitors to respond “Voice is the new touch” --Dylan or Simon
  20. 20. Deals/Offers Preferred Mobile Ads How would you prefer to receive Deals/coupons preferred coupons on your mobile? form of mobile advertising In store coupon searching Text message (push) 25% common use case on smartphones (smartphones) Email 18% 50% of survey respondents Text to receive (pull) 17% have made a special trip to a store after receiving a mobile coupon App 13% QR code 10% Check-in 8% Source: InsightExpress Q2 2011, Luth Research (Q2 2011), Opus Research 2010
  21. 21. Social Media, SMBs&the „Now What?‟ Problem
  22. 22. What Is „Social Media‟?• Consumers talking to each other online• Consumers talking about companies, products and brands• User-generated content• Online word of mouth• Coming up: Search vs. Social, Can Social Media Be Outsourced?
  23. 23. Mobile Inherently Social • Facebook has 350 millionactive mobile users globally • Twitter has100 million active mobile users and “46% of active users make mobile a regular part of their Twitter experience” • Overall comScore says US mobile- social networking audience just over 70 million • 40 million US mobile users access social networks (including blogs) dailySource: Company statements, comScore Q3 2011
  24. 24. Facebook Dominates Mobile Time Spent Top UK Mobile Sites by Time Spent (millions of minutes) 2523 702 373 240 127 109 79 64 57 48 25Source: GSMA UK, 12/10
  25. 25. Current SMB Marketing Methods Other surveys have shown social media usage by SMBs at 70% (varies by category)Source: AMEX 2/11 (n=400 US small businesses who did some form of online marketing)
  26. 26. Study: 58% on Either FB or TwitterSource:Palore July 2011
  27. 27. Mixed Experience with Social for SMBs • 66% of SMBs said they updated Facebook at least weekly • 63% of SMBs feel it has helped make customers more loyal • 56% feel it has taken up more time than they expected • 25% of SMBs estimate their investment in social media has made a profit while 15% estimate they have lost money; the remainder (46%) feel they broke even. • Often social media has fallen short of expectations (36%) vs. exceeded expectations (9%)Source: Network Solutions, 2011 (n=500 US small businesses)
  28. 28. Confronting the „Now What?‟ Problem• Business owners or surrogates set up accounts• They often don‟t know what to do after that• How to measure ROI, how to think about social• They lack education, best practices advice• Range of third parties now trying to help• But how much of social media can be outsourced?
  29. 29. Google+ Complicates Life – and Like
  30. 30. Consumers „Like‟ Deals • In North America, 45% of respondents said they Liked a brand to get a deal. • 33% of respondents said they wanted to “show support” for the brand or celebrity. • 9% wanted to be among the first to receive news from the brand or celebrity. • Nearly 60% of social media users visit social networks to receive coupons or promotions; 23% do so weekly Source: Nielsen October 2011, Nielsen/NM Incite global consumer survey
  31. 31. The (Local) Data Tsunami• Crowd sourced• Merchant created• Social media• Reviews/tips/ratings• Delivered everywhere via APIs
  32. 32. Mobile Payments & „Real- World Analytics‟
  33. 33. Mobile Payments Era Begins It‟s real and becoming intensely competitive: Google, PayPal, Intuit, mobile carriers, Amex, Visa, MasterCard , Square, among others In many instances payments and offers/incentives/loyalty cards are tied together Eventually online ads and offline purchases will be connected for a “closed loop”
  34. 34. Real World Analytics Many companies trying to connect online and offline data/purchase behavior Check-ins and other methods being used by Euclid to track in-store presence Lots of mobile promotional efforts (e.g., offers) to get people into stores Eventually much closer visibility on which ads delivered in-store visits, even purchases
  35. 35. From Clicks to Transactions
  36. 36. Deals Introduce Transactions to Local• Traditional “lead-gen” has always existed at the local level in certain verticals (cars, jobs, real estate)• Pay per call has existed in pockets (now increasingly)• Deals introduces a “transactional” model to SMBs with potentially profound results for local advertising market• Deals more tangible for SMBs vs. “advertising”• Movement from a speculative advertising model to a more concrete “pay per customer” model
  37. 37. SMBs Like Idea of Buying Customers How would you prefer to be billed for new customers? Pay per store visit 16.5% A percentage of a sale, generated by an online 27.3% marketing program Paid-search clicks (e.g. 15.3% Google sponsored listings) Telephone calls to your 16.6% business Other 24.4%Source: Opus Research 2/11 n=7,510 US small businesses
  38. 38. But Would They Do It Again? Yes 48% On average just over 50% of deals turn out to be profitable, while 25% to No 14% 30% lose money. -- Rice University, June 2011 n=324 daily deal merchants Not sure 37% 0% 10% 20% 30% 40% 50% 60% Source question for this chart: If youve participated in a Deals program, will you do so again? Respondents = 159Source: Borrell Associates, September 2011
  39. 39. Diversion of Ad Spending to Deals Have you diverted marketing dollars away from other types of advertising in order to offer coupons/deals? 80% 68% 70% 60% 50% 40% 30% 19% 20% 14% 10% 0% No Yes I havent offered coupons for my businessSource: Borrell Associates, September 2011
  40. 40. Impact on Traditional Media Percentage spending decrease among surveyed businesses using deals to promote themselves:  Yellow Pages: - 27.5%  Print advertising: - 21.6%  Direct mail: -17.6%  TV: -14.7%  Local radio: -13.7%Source: Rice University, June 2011 n=324 businesses that conducted a daily deal promotion between August 2009 and March 2011
  41. 41. RedBeacon Exemplifies Transactional Model • 35% of merchant responses coming from mobile (in 2 mos). • App is feature rich and allows for video and audio to be uploaded • In app scheduling • Calls, chat, multiple communication tools • RedBeacon: mobile could become primary way that consumers and service businesses interact • Biz model is commission
  42. 42. From Publisher to „eMarketplace‟ PlatformIn summer 2011 Yell announced a “Emarketplace platform:” Yell says itchange of strategy: will “establish the first local eMarketplace platform for consumersFrom publisher to platform: Yell and SMEs to connect and transactsays it will move from being a locally (local ecommerce, coalitionpublisher/provider of advertising loyalty programs, conciergeservices a publisher of “digital services).”services” (marketing services, co-branded affinity cards, paymentservices, businessoperations, government accessservices).
  43. 43. To FollowContact Me Me Follow or or Contact Greg Sterling