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Special BI Intelligence Presentation: Cracking The Mobile Code In Social Media
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Special BI Intelligence Presentation: Cracking The Mobile Code In Social Media

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  • 1. The Future Of “Smobile”Henry BlodgetCEO, Business InsiderSeptember 27, 2012
  • 2. Social + Mobile =“Smocial”?“Smobile”?
  • 3. Henry BlodgetFounder, CEO & Editor-in-Chief,Business InsiderMarcelo Ballve, Editorial DirectorAlex Cocotas, Analyst
  • 4. Something profoundhappened last year…
  • 5. Smartphone sales overtook PC sales Global Internet Device Sales 1,000,000,000 900,000,000 800,000,000 Tablets 700,000,000 600,000,000Units 500,000,000 Smartphones 400,000,000 300,000,000 200,000,000 100,000,000 Personal Computers - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Gartner, IDC, Strategy Analy cs, company filings, BI Intelligence es mates
  • 6. And will soon DWARF them… Global Internet Device Sales 3,000,000,000 2,500,000,000 2,000,000,000 TabletsUnits 1,500,000,000 We are here 1,000,000,000 Smartphones 500,000,000 Personal Computers - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E Source: Gartner, IDC, Strategy Analy cs, company filings, BI Intelligence es mates
  • 7. Tablets will also blow past PC sales in a few years Tablet Sales Forecast 500 450 400 E-Readers 350 300 Units Sold 250 (millions) 200 We are here 150 100 50 0 2010 2011 2012E 2013E 2014E 2015E 2016E
  • 8. So the future is mobile! G-20 Internet Access 3,000 2,500 2,000 Consumer Mobile Broadband 1,500Connec ons (milions) 1,000 Mobile 500 Fixed Fixed Fixed 0 2005 2010 2015 Source: Boston Consul ng Group, Mary Meeker, Kleiner Perkins, Morgan Stanley Research, Berg Insight
  • 9. 20 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 08 20 - 12 09 20 - 02 09 20 - 04 09 1% 20 - 06Source: StatCounter 09 20 - 08 09 20 - 10 09 20 - 12 10 20 - 02 10 20 - 04 10 20 - 06 10 20 - 08 10 20 - 10 10 20 - 12 11 4% 20 - 02 11 20 - 04 11 20 - 06 11 20 - 08 11 20 - 10 11 Global Internet Trafic: Mobile vs. Desktop 20 - 12 12 20 - 02 Mobile 12 20 - 04 12 Desktop 20 - 06 12 -0 12% 8 Mobile now accounts for 12% of global internet traffic
  • 10. Time spent on mobile apps is rising fast Total Mobile App And Web Dura on On Android And iOS 140 120 100 80Minutes Spent Per Month (Biillions ) 60 Apps 40 20 Mobile Web 0 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Source: Nielsen Smartphone Analy cs
  • 11. Where are we in themobile revolution?
  • 12. Globally, we’re early Global Smartphone Penetra on Forecast 2,500 We are here 2,000 1,500 Feature Phone SalesGlobal Mobile Phone Sales (millions) 1,000 500 Smartphone Sales - 2010 2011 2012 2013 2014 2015 2016
  • 13. The U.S., however, is more than halfway there Changes In Smartphone Ownership, 2011-2012 (U.S.) 60% 50% 48% 46% 41% 40% 35% 30% 20% 17% 12% 10% 0% Smartphone Feature Phone No Cell Phone May-11 Feb-12
  • 14. Smartphone “demo” is young and rich (but will soon be everyone) Smartphone Penetra on By Age And Income (U.S.)90% 80%80% 77% 74% 75% 69% 70%70% 65% 65% 65% 63% 60%60% 58% 56% 53% 52% 50% 51%50% 48% 43% 44% 41% 42%40% 38% 31% 32% 30%30% 27% 23% 24% 21%20% 18% 16% 17% 16% 15% 16%10%0% Ages 18 - 24 Ages 25 - 34 Ages 35 - 44 Ages 45 - 54 Ages 55 - 64 Ages 65+ <15k 15k - 35k 35k - 50k 50k - 75k 75k - 100k 100k+ Source: Nielsen, January 2012
  • 15. What does thismean for social?
  • 16. Social is one of the fastest growing uses of mobile phones U.S. Mobile Content Usage 80% Sent Text Message 70%Share of mobile popula on that has... 60% Used Downloaded Apps 50% Used Browser Accessed Social Network 40% Or Blog Played games 30% Listened to music 20% 10% 0% Feb Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12 12 Source: comScore
  • 17. People spend more time on apps than they do browsing web U.S. Mobile Apps vs. Web Consump on, Minutes Per Day 94 81 74 72 70 64 66 43 June 2010 Dec 2010 June 2011 Dec 2011 Web browsing Mobile appsSource: Flurry Analy cs, Alexa, comScore
  • 18. And social and games are the big apps Daily Smartphone App Consump on, Minutes Per Category 7 7 10 10 12 11 24 15 25 24 Q1 2011 Q1 2012 Games Social Networking News Entertainment Other Source: Flurry Analy cs
  • 19. 37% of U.S. smartphone owners check social networks daily; 64% monthly U.S. Frequency Of Social Networking Use On Mobile Phones (May 2012) % of Smartphone Users % of Total Mobile Audience Ever in monthOnce to three mes per month At least once each week Almost every day 0 10 20 30 40 50 60 70 80 90 100 % who accessed a social network or blog (3 month average)
  • 20. Facebook ~500 million mobile users Facebook Mobile Users 600 500 400 Monthly Ac ve 300 Users(millions) 200 100 0 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q09 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12
  • 21. More than half of Twitter usage is mobile 75% 70% 55% % of Traffic from Mobile Pandora 50% Twi er 33% Facebook 25% 5% 1% 0% 2008 2009 2010 2011 Source: Mary Meeker, Kleiner Perkins, companies
  • 22. Instagram hit 100 million users in 2 years
  • 23. What are mobile users doing onsocial networks?
  • 24. They are (surprise!) mostly using them to communicate U.S. Social Networking Ac vity On Mobile Phones % of Total Mobile Audience, Aug. 2011 Clicked on an adver sement. % of Total Mobile Audience, May 2012 Received a coupon or offer. Posted a link to a web site Read a post from a public figure. Followed a posted link to a web site. Read a post from an organiza on, event, or brand. Posted a status update. Read a post from someone they know personally. 0 10 20 30 40 50 60 70 80 90 100 Source: ComScore % who did ac vity at least once per month (3 month average)
  • 25. Sharing, reading, and liking posts and links…
  • 26. Taking and sharing lots of photos… U.S. Mobile Phone Usage By Ac vity, May 2012 Accssed news Listened to music Accessed maps Accessed search Played gamesAccessed social networking site or blog Accessed weather info % of Smartphone Users Used email % of Mobile Audience Used browser Used an app Accessed news and informa on Took a photo Sent text message 0 10 20 30 40 50 60 70 80 90 100
  • 27. Unfortunately, thereare some things users are NOT doing
  • 28. Clicking on ads (only 32%) U.S. Social Networking Ac vity On Mobile Phones % of Total Mobile Audience, Aug. 2011 Clicked on an adver sement. % of Total Mobile Audience, May 2012 Received a coupon or offer. Posted a link to a web site Read a post from a public figure. Followed a posted link to a web site.Read a post from an organiza on, event, or brand. Posted a status update.Read a post from someone they know personally. 0 10 20 30 40 50 60 70 80 90 100 % who did ac vity at least once per month (3 month average)
  • 29. And mobile monetization still lags desktop ARPU, Desktop vs. Mobile $58.95 $25.00 $17.61 $6.62 $5.00 $3.87 Pandora Zynga Tencent Mobile Desktop Source: Pandora, Zynga, Tencent
  • 30. Why?
  • 31. Mobile CPMs are lower Effec ve CPM, Desktop vs. Mobile $3.50 $0.75 Desktop Internet Mobile InternetSource: comScore, Vivaki, Mobclix Exchange
  • 32. Including for companies like Google and Facebook Google CPC Growth15%10% 5% 0%-5%-10%-15% 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Source: Company data, Evercore Group LLC Research
  • 33. Smartphone users really don’t like intrusive ads Smartphone Owners Recep vity To Mobile Adver sing 40% 33% 30% 30% 27% 26% 19% 16%Dont mind adver sing as long as does not disrupt ac vi es Adver sing is acceptable UK Italy Germany US Source: Nielsen Mobile Connected Device Report
  • 34. And ads on smartphones may not be particularly effective… Smartphone Adver sing Effec veness 34% 28% 27% 27% 24% 22% 20% 19% 17% 14% 12% 12% 11% 8% 7% 4%Made a purchase on internet Clicked on ad to view full ad or Searched for more info about Made a purchase directly via PC product offering business I saw adver sed through device based on ad Italy Germany UK US Source: Nielsen Mobile Connected Device Report
  • 35. Overall, mobile is still a tiny fraction of digital ad spending U.S. Digital Adver sing Revenues $35 Mobile $30 $25(billions) $20 $15 $10 $5 $0 2007 2008 2009 2010 2011 Source: IAB, BIA-Kelsey, BII es mates
  • 36. What aboutmobile/socialcommerce?
  • 37. One “mobile commerce” theory is this: Take advantage of a phone’s GPS to offer something desktop can’t Mobile users share their location by checking-in, or allowing app to track them Users then receive coupons from nearby businesses
  • 38. But, local couponing experiments are not working well Only 36% of smartphone users are using coupons or offers “Groupon Now” numbers have been unimpressive LivingSocial abandoned “Instant”
  • 39. Why not?
  • 40. That’s not how people shop!
  • 41. Proximity and discounts are not enough Few customers are drawn into a store simply because of a sale They need to be interested in the products being sold first They also need to be actively looking to buy that product at that time
  • 42. Another idea, “Check-ins,” not going mainstream U.S. Geoloca on Service Usage By Demographic 25 20 15Percentage 10 5 0 18-29 30-49 50+ Age Group May-11 Feb-12
  • 43. And social referrals to commerce sites are still tiny Drivers of E-Commerce Traffic 90.0% 80.0% 70.0% 60.0% Facebook referrals up 92% year-over- 50.0% year…Percentage Of Traffic 40.0% 80.6% 30.0% 20.0% 10.0% 9.7% 7.5% 1.7% 0.5% 0.02% 0.0% Google Yahoo Bing AOL Facebook Twi er Source: RIchRelevance
  • 44. So, what canmake “smocial” huge?
  • 45. “Native” mobile ads… Facebook just released “Sponsored Stories” for mobile Brands can turn an action by a user into an ad Highly shareable ~500 million mobile users, ~$500 million revenue
  • 46. Twitter has them, too Mobile promoted tweets Mobile revenue surpasses web revenue many days ~$125 mm mobile revenue in 2012 Also highly shareable, can link to additional richer info
  • 47. And there may be bigopportunities in social discovery
  • 48. Contextual relevance Goes beyond location Must understand user’s buying habits, preferences, tastes, etc. Social networks have this kind of information
  • 49. Push, not pull This is Groupon’s secret Sent to users when they are receptive to it Messages must be infrequent and relevant
  • 50. Services and experiences – not goods Works best for service-based businesses These kinds of businesses lead to spontaneous purchases And these are types of purchases most likely to be made on mobile phones
  • 51. Brand advertising Opportunity for brands to connect themselves to social experiences
  • 52. Affiliate payouts Users could recommend purchases to friends Users could then be paid out when friends buy something Could be used for big-ticket items that users consider over time
  • 53. So, who is poised to win?
  • 54. Three obvious leaders
  • 55. Facebook 500+ million mobile users Superb mobile engagement Lack useful location data, as check-ins did not catch on Acquisitions like Instagram and Glancee may help
  • 56. Twitter More than 60% of traffic is mobile Product and ad-platform inherently suited for mobile Lots of information about user interests based on tweets and who they follow
  • 57. Google Great combination of assets World-leader when it comes to determining relevance Most popular set of mobile properties and services Biggest weakness is relative lack of social data
  • 58. Other players may comeup with a winning formula
  • 59. Foursquare Fourth most popular mobile social service in U.S. Pivoting into local search and discovery ~20m users; enough to collect useful relationship data Needs more users and business data
  • 60. Pinterest Very popular on mobile Lots of commercial potential Interesting local possibilities
  • 61. Groupon or LivingSocial Both have experimented with mobile location-based deals Results have not been impressive Both lack any real social data But… email still mobile, social and big.
  • 62. Apple No social DNA, Ping shut down Massive resources and iPhone sales could allow them to enter market as they please Likely to do it only to sell more iPhones or differentiate iOS from other platforms
  • 63. Microsoft Lots of local business data and advertising relationships Partnership with Facebook provides access to social graph data (already used in Bing) Eager to differentiate WP8 Company focus is more likely on other, more core products
  • 64. Or… new startups! Facebook only 7 years old; Twitter 5. Many ways to combine social+ mobile phones in new, intriguing ways Successful entrants will make for great acquisition targets
  • 65. Thank you!

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