The Future Of “Smobile”Henry BlodgetCEO, Business InsiderSeptember 27, 2012
Social + Mobile =“Smocial”?“Smobile”?
Henry BlodgetFounder, CEO & Editor-in-Chief,Business InsiderMarcelo Ballve, Editorial DirectorAlex Cocotas, Analyst
Something profoundhappened last year…
Smartphone sales overtook PC sales                                                         Global Internet Device Sales   ...
And will soon DWARF them…                                                         Global Internet Device Sales      3,000,...
Tablets will also blow past PC sales in a few years                                  Tablet Sales Forecast          500   ...
So the future is mobile!                                                G-20 Internet Access           3,000           2,5...
20                                  0%                                        10%                                         ...
Time spent on mobile apps is rising fast                        Total Mobile App And Web Dura on On Android And iOS       ...
Where are we in themobile revolution?
Globally, we’re early                               Global Smartphone Penetra on Forecast                2,500            ...
The U.S., however, is more than halfway there        Changes In Smartphone Ownership, 2011-2012 (U.S.)  60%  50%          ...
Smartphone “demo” is young and rich            (but will soon be everyone)                                         Smartph...
What does thismean for social?
Social is one of the fastest growing                                                           uses of mobile phones      ...
People spend more time on apps than        they do browsing web       U.S. Mobile Apps vs. Web Consump on, Minutes Per Day...
And social and games are the big apps  Daily Smartphone App Consump on, Minutes Per Category                              ...
37% of U.S. smartphone owners check social       networks daily; 64% monthly         U.S. Frequency Of Social Networking U...
Facebook ~500 million mobile users                          Facebook Mobile Users          600          500          400 M...
More than half of Twitter usage is mobile                            75%                                                  ...
Instagram hit 100 million users in 2 years
What are mobile users doing onsocial networks?
They are (surprise!) mostly using them to communicate                                  U.S. Social Networking Ac vity On M...
Sharing, reading, and liking posts and links…
Taking and sharing lots of photos…                         U.S. Mobile Phone Usage By Ac vity, May 2012                   ...
Unfortunately, thereare some things users    are NOT doing
Clicking on ads (only 32%)                              U.S. Social Networking Ac vity On Mobile Phones                   ...
And mobile monetization still lags desktop                              ARPU, Desktop vs. Mobile                          ...
Why?
Mobile CPMs are lower                  Effec ve CPM, Desktop vs. Mobile                       $3.50                       ...
Including for companies like Google and                Facebook                                  Google CPC Growth15%10% 5...
Smartphone users really don’t like                  intrusive ads          Smartphone Owners Recep vity To Mobile Adver si...
And ads on smartphones may not be           particularly effective…                           Smartphone Adver sing Effec ...
Overall, mobile is still a tiny fraction of              digital ad spending                                U.S. Digital A...
What aboutmobile/socialcommerce?
One “mobile commerce” theory is this: Take advantage of a phone’s GPS  to offer something desktop can’t Mobile users sha...
But, local couponing experiments are             not working well Only 36% of smartphone users  are using coupons or offe...
Why not?
That’s not how people        shop!
Proximity and discounts are not enough Few customers are drawn into a  store simply because of a sale They need to be in...
Another idea, “Check-ins,” not going                             mainstream                   U.S. Geoloca on Service Usag...
And social referrals to commerce sites are still tiny                                              Drivers of E-Commerce T...
So, what canmake “smocial”    huge?
“Native” mobile ads… Facebook just released  “Sponsored Stories” for mobile Brands can turn an action by a  user into an...
Twitter has them, too Mobile promoted tweets Mobile revenue surpasses web  revenue many days ~$125 mm mobile revenue in...
And there may be bigopportunities in social     discovery
Contextual relevance Goes beyond  location Must understand  user’s buying  habits, preferences,  tastes, etc. Social ne...
Push, not pull This is Groupon’s secret Sent to users when they are  receptive to it Messages must be infrequent  and r...
Services and experiences – not goods Works best for service-based  businesses These kinds of businesses lead  to spontan...
Brand advertising Opportunity for brands to  connect themselves to social  experiences
Affiliate payouts Users could recommend  purchases to friends Users could then be paid out  when friends buy something ...
So, who is poised to win?
Three obvious leaders
Facebook 500+ million mobile users Superb mobile engagement Lack useful location data, as  check-ins did not catch on ...
Twitter More than 60% of traffic is  mobile Product and ad-platform  inherently suited for mobile Lots of information a...
Google Great combination of assets World-leader when it comes to  determining relevance Most popular set of mobile  pro...
Other players may comeup with a winning formula
Foursquare Fourth most popular mobile  social service in U.S. Pivoting into local search and  discovery ~20m users; eno...
Pinterest Very popular on mobile Lots of commercial potential Interesting local possibilities
Groupon or LivingSocial Both have experimented with  mobile location-based deals Results have not been impressive Both ...
Apple No social DNA, Ping shut down Massive resources and iPhone  sales could allow them to enter  market as they please...
Microsoft Lots of local business data and  advertising relationships Partnership with Facebook  provides access to socia...
Or… new startups! Facebook only 7 years old;  Twitter 5. Many ways to combine social+  mobile phones in new, intriguing ...
Thank you!
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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

  1. 1. The Future Of “Smobile”Henry BlodgetCEO, Business InsiderSeptember 27, 2012
  2. 2. Social + Mobile =“Smocial”?“Smobile”?
  3. 3. Henry BlodgetFounder, CEO & Editor-in-Chief,Business InsiderMarcelo Ballve, Editorial DirectorAlex Cocotas, Analyst
  4. 4. Something profoundhappened last year…
  5. 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. 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. 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. 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. 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. 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. 11. Where are we in themobile revolution?
  12. 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. 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. 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. 15. What does thismean for social?
  16. 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. 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. 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. 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. 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. 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. 22. Instagram hit 100 million users in 2 years
  23. 23. What are mobile users doing onsocial networks?
  24. 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. 25. Sharing, reading, and liking posts and links…
  26. 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. 27. Unfortunately, thereare some things users are NOT doing
  28. 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. 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. 30. Why?
  31. 31. Mobile CPMs are lower Effec ve CPM, Desktop vs. Mobile $3.50 $0.75 Desktop Internet Mobile InternetSource: comScore, Vivaki, Mobclix Exchange
  32. 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. 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. 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. 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. 36. What aboutmobile/socialcommerce?
  37. 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. 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. 39. Why not?
  40. 40. That’s not how people shop!
  41. 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. 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. 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. 44. So, what canmake “smocial” huge?
  45. 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. 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. 47. And there may be bigopportunities in social discovery
  48. 48. Contextual relevance Goes beyond location Must understand user’s buying habits, preferences, tastes, etc. Social networks have this kind of information
  49. 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. 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. 51. Brand advertising Opportunity for brands to connect themselves to social experiences
  52. 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. 53. So, who is poised to win?
  54. 54. Three obvious leaders
  55. 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. 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. 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. 58. Other players may comeup with a winning formula
  59. 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. 60. Pinterest Very popular on mobile Lots of commercial potential Interesting local possibilities
  61. 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. 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. 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. 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. 65. Thank you!

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