The latest column post from our Managing Director – Martin Wilson -  mSearchgroove; the leading source of analysis and commentary on mobile search, mobile advertising, and social media.  Seven Shortcomings That Can Wreck Your Mobile Strategy – Not just saying whats wrong, but suggesting solutions.

Link to post on msearchgroove: Here

Column post

The report is from Pew Internet & American Life Project written by Kristen Purcell, Roger Entner, Nichole Henderson

As there are some very interesting elements of the report I have chosen to publish the complete report on my blog. Alternatively you can download a PDF version of report or use the link below of visit the Pew Research centre website to view an online version.  

PDF Report: Here

Online version: Here

Overview

 Main findings

Cell phone use in the U.S. has increased dramatically over the past decade.  Fully eight in ten adults today (82%) are cell phone users, and about one-quarter of adults (23%) now live in a household that has a cell phone but no landline phone. 

Along with the widespread embrace of mobile technology has come the development of an “apps culture.”  As the mobile phone has morphed from a voice device to a multi-channel device to an internet-accessing mini-computer, a large market of mobile software applications, or “apps,” has arisen. 

Among the most popular are apps that provide some form of entertainment (games, music, food, travel and sports) as well as those that help people find information they need and accomplish tasks (maps and navigation, weather, news, banking).  With the advent of the mobile phone, the term “app” has become popular parlance for software applications designed to run on mobile phone operating systems, yet a standard, industry-wide definition of what is, and is not, an “app” does not currently exist.  For the purpose of this report, apps are defined as end-user software applications that are designed for a cell phone operating system and which extend the phone’s capabilities by enabling users to perform particular tasks. 

The most recent Pew Internet Project survey asked a national sample of 1,917 cell phone-using adults if they use apps and how they use them.  Broadly, the results indicate that while apps are popular among a segment of the adult cell phone using population, a notable number of cell owners are not yet part of the emerging apps culture.

35% of adults have cell phones with apps, but only two-thirds of those who have apps actually use them

Of the 82% of adults today who are cell phone users, 43% have software applications or “apps” on their phones.  When taken as a portion of the entire U.S. adult population, that equates to 35% who have cell phones with apps.  This figure includes adult cell phone users who:

• have downloaded an app to their phone (29% of adult cell phone users), and/or
• have purchased a phone with preloaded apps (38% of adult cell phone users)

Yet having apps and using apps are not synonymous. Of those who have apps on their phones, only about two-thirds of this group (68%) actually use that software.  Overall, that means that 24% of U.S. adults are active apps users.  Older adult cell phone users in particular do not use the apps that are on their phones, and one in ten adults with a cell phone (11%) are not even sure if their phone is equipped with apps. 

Apps users are younger, more educated, and more affluent than other cell phone users

When compared with other cell phone using adults, and the entire U.S. adult population, the apps user population skews male, and is much younger, more affluent, and more educated than other adults.  Overall, the apps-using population also skews slightly Hispanic when compared with other adult cell phone users.

App use still ranks relatively low when compared with other uses of cell phones

While 24% of adults, 29% of adults with cell phones, use applications on their phones, apps use still ranks relatively low when compared with other non-voice cell phone activities.  Taking pictures and texting are far and away the most popular non-voice cell phone data applications, with more than seven in ten adult cell phone users embracing these features of their phones.

29% of adult cell phone users have downloaded an app to their phone

As with the apps-using population as a whole, downloaders are younger, more educated, and disproportionately male when compared with the total U.S. adult population.  And while they resemble adults who only have preloaded apps in terms of education, they are still disproportionately young and male even when compared with this group. 

One in ten adult cell phone users (10%) had downloaded an app in the past week; 20% of cell phone users under age 30 download apps this frequently

Those who download apps do so fairly frequently.  Among apps downloaders, roughly half (53%) say their most recent download was in the past 30 days, including one third (33%) who say their last download was within the past week.   As a fraction of all cell phone-using adults, that equates to 15% who have downloaded apps in the past month, and 10% who have downloaded apps in the past week.  Among cell phone users under age 30, 20% have downloaded an app in the past week.

One in eight adult cell phone users (13%) has paid to download an app

Among the 29% of adult cell phone users who download apps, just under half (47%) have paid for an app, with the remainder saying they only download apps that are free.  Put in broader context, that means that 13% of all adult cell phone users have paid to download an app to their phone.  There are few notable demographic differences between downloaders who pay for apps and those who do not. 

Among cell phone users with apps, the average adult has 18 apps on his or her phone

Among adult cell phone users who have software applications on their cell phones, the mean number of apps is 18.  However, the median number of apps is 10, indicating there are heavy apps users on the high end of the response scale who have a disproportionate number of apps on their phones.  This is particularly true among the youngest adults.

Again, there is some uncertainty among cell phone users, particularly older cell phone users, about what software they have on their phones.  Fully 18% of cell phone users with apps on their phones do not know how many they have.  That figure doubles to 36% among cell phone users age 50 and older.

Nielsen data indicate that games are the most popular apps, followed by news/weather, maps/navigation, social networking, and music. 

In addition to drawing on results from the Pew Internet Project’s own nationwide probability sample of 2,252 adults, this report also presents findings from The Nielsen Company’s Apps Playbook, a December 2009 survey of a nonprobability sample of 3,962 adult cell phone subscribers who had downloaded an app in the previous 30 days.¹ Although the Nielsen survey cannot be projected to the population of all app downloaders with a known degree of accuracy, it provides an extensive snapshot of the types of apps people are downloading and a broad sense of how they are using them.  

Among the recent downloaders Nielsen surveyed, game apps were the most downloaded apps overall in terms of both volume and the percent of adults who had downloaded them.² In terms of actual apps use, six in ten of Nielsen’s recent downloaders (60%) said they had used a game app in the past 30 days, and roughly half said they had used a news/weather app (52%), a map/navigation app (51%), or a social networking app (47%) in that same timeframe.  While music apps ranked second on the most downloaded list, they ranked fifth on the most used list.

In the Nielsen survey, most recent apps downloaders said they used their apps daily but for short periods of time, and used them in a variety of situations

Some 57% of the recent apps downloaders in the Nielsen study said they use their apps daily.  While one quarter of these recent apps downloaders (24%) said they use their apps for more than 30 minutes a day, the vast majority said they spend less time using their apps each day. 

Asked where they use their apps most frequently, 71% of the Nielsen sample said they frequently used their apps when they were alone, and about half said they frequently used their apps while waiting for someone or something (53%) or while at work (47%).  One in three (36%) said they frequently used apps while commuting. 

The Nielsen survey indicates that different people may use apps in different ways

There were several notable differences among the Nielsen recent-downloader sample in terms of which apps they favored and how frequently they used them. For instance:

• Women in the sample were more likely than men to have used a social networking app in the past 30 days (53% v. 42%), and women who used the Facebook app were also more likely to use that app everyday (64% v. 55%)
• Women in the sample were more likely than men to have a used a game app in the past 30 days (63% v. 58%), while men were more likely to have used a productivity app (29% v. 21%) or a banking/finance app (31% v. 25%)
• Among the Nielsen sample of recent downloaders, whites (53%) and Hispanics (47%) were more likely than African-Americans (36%) to have used a map/navigation/search app in the month prior to the survey
• Hispanics, on the other hand, were the most likely to have used a music app recently (48% of Hispanics v. 42% of whites and 42% of African-Americans)
• In the Nielsen sample, 75% of 18-24 year-old Twitter app users reported using that app every day, compared with 52% of the 25-34 year-olds and 48% of the Twitter users age 35 and older
• In contrast, among Nielsen’s Facebook app users, 25-34 year-olds were more likely than both younger and older Facebook app users to report using their Facebook app daily
• The African-Americans and Hispanics in the Nielsen sample were significantly more likely than whites to be daily users of their Youtube apps (33% of African-Americans v. 24% of Hispanics v. 12% of whites) and their Pandora music apps (33% of African-Americans v. 27% of Hispanics v. 14% of whites)

The Nielsen study indicates that cell phone screen real estate is valuable

Slight majorities of Nielsen’s recent app downloaders said they organize their apps so that the most frequently used are easily accessible (59%), and that they delete apps from their phones that are not useful or helpful (56%).  And this culling process happens relatively quickly; among those who had deleted an app, 62% said they usually do it within two weeks of downloading the software.  The men in the Nielsen sample deleted apps more quickly than women; 40% of the male recent-downloaders said they delete apps they did not find useful within a week, compared with 29% of the women. 

The figures from the Pew Internet Project survey were gathered in a telephone survey of a representative sample of 2,252 U.S. adults age 18 and older between April 29 and May 30, 2010. The sample included 1,917 adult cell phone users, 744 of whom were contacted on their cell phones.  The margin of error is +/- 2.4 percentage points for results based on the total sample of adults, and +/- 2.7 for results based on cell phone users.

The Nielsen data are from an online, self-administered survey with a nonprobability sample of 4,265 recent apps downloaders originally identified in Nielsen’s Mobile Insights survey of cell phone subscribers.  Because the survey is not based on a probability sample, no margin of error can be computed and the results cannot be generalized to the population of recent app downloaders with a known degree of precision. The Mobile Insights sample is drawn from a combination of online panels and is augmented by a Spanish language phone survey in highly concentrated Hispanic markets using a residential phone list sample frame for improved coverage of Hispanics. The Apps Playbook follow-up survey was conducted in December of 2009, and screened for “recent downloaders”—those who had downloaded an app in the past 30 days.  The Apps Playbook data includes teen as well as adult cell phone subscribers, but for this report, percentages are based only on the 3,962 adults ages 18 and older who had downloaded an app in the past 30 days. 

 Part 1. The apps landscape

 A new “apps culture”

Cell phones now permeate American culture. As they become more powerful as connected, multi-media, handheld devices, a new ecosystem of computing applications is being created around them. The emergence of this pervasive mobile connectivity is changing the way people interact, share creations, and exploit the vast libraries of material that are generated for the internet.

The newest national phone survey of the Pew Research Center’s Internet & American Life Project shows that 82% of adults are cell phone users, and about one-quarter of adults (23%) now live in cell phone only households – that is, households with no landline phone. According to Pew Internet survey data, as of September 2009, three-quarters of 12-17 year-olds had cell phones, and a 2010 Kaiser Family Foundation study indicated almost a third of 8 to 10 year-olds in the U.S. have cell phones today.³

The widespread embrace of mobile technology has spawned the development of an “apps culture.” As the mobile phone has morphed from a voice device to a multi-channel device to an internet-accessing mini-computer, a large market of mobile software applications designed specifically for cell phones has developed alongside it.

Currently, the cell phone industry lacks a standard, widely shared definition of what is and is not considered an “app.” Traditionally the term “app” has been used as shorthand for any software application. With the advent of the mobile phone, the term “app” has become popular parlance for software applications designed to run on mobile phone operating systems. For the purpose of this report, apps are defined as end-user software applications that are designed for a cell phone operating system and which extend the phone’s capabilities by enabling users to perform particular tasks. Assuming this definition, cell phone apps as discussed here are distinct from cell phone functions, which are hardware-enabled activities such as taking pictures and recording video and/or which run on systems software. Cell phone apps as defined here rely on or require certain systems software and/or hardware features to function, and may be thought of as being layered on top of them.

To understand whether and how U.S. adults have jumped into the emerging apps market, and how apps use compares to the use of other cell phone features, the Pew Internet Project recently conducted a national survey of adults age 18 and older that included 1,917 cell phone users.

Broadly, results indicate that while apps are popular among a young, tech-hungry segment of the adult cell phone using population, a notable number of adult cell phone users are not part of apps culture. Many adults who have apps on their phones, particularly older adults, do not use them, and one in ten adults with a cell phone (11%) are not even sure if their phone is equipped with apps. Moreover, apps use ranks fairly low when compared with the use of other cell phone functions such as taking pictures and texting.⁴

35% of adults have cell phones with apps

Of the 82% of adults today who are cell phone users, 43% have apps on their phones. When taken as a portion of the entire U.S. adult population, that means that 35% have cell phones with apps. This figure includes adult cell phone users who:

• have downloaded an app to their phone (29% of adult cell phone users), and/or
• have purchased a phone with preloaded apps (38% of adult cell phone users)

A “yes” answer to either question was sufficient to include someone in the apps population. Of course, many cell owners (23%) have both pre-loaded and downloaded apps on their cell phones.

One in ten adult cell phone users do not know if they have apps on their phone

While 38% of adults cell phone users report having a phone that came preloaded with apps, another 11% of cell phone users said they did not know if their phone came with any software applications. This uncertainty about cell phone features is most pronounced among cell phone users age 50 and older, 15% of whom did not know if their phone came with apps. Just 4% of cell phone users under age 30 could not say if their phone came with software applications.

Adult cell phone users are more confident when asked whether they have ever downloaded an app, with 29% saying yes, 70% saying no, and less than one half of one percent saying they did not know.

Two-thirds of adult cell phone users who have apps actually use them

While 35% of adults have apps on their phones, only about two-thirds (68%) of adults who have apps report actually using them. That means that 24% of all adults in the U.S. use apps.

Among those who actively use their apps, the vast majority (91%) have used them within the past 30 days.  Just 9% of apps users say it has been more than 30 days since the last time they used the apps on their phone. 

Apps users are younger, more educated, and more affluent than other cell phone users

Apps users have a distinct demographic profile when compared with other cell phone using adults, and when compared with the entire U.S. adult population.  Apps users skew male, and they are much younger than the broader population.  Overall, they are also more educated and more affluent than other cell phone users or the adult population as a whole.  The apps-using population also skews slightly Hispanic when compared with other cell phone users and all adults.

Among adults who have apps, age is the strongest predictor of apps use

It is clear that young adult cell phone users are the most eager apps adopters.  While 79% of 18-29 year-olds who have apps on their phones say they use them, that figure drops to 67% among 30-49 year-olds and just 50% among adults age 50 and older. 

Cell phone only adults (those who have a cell phone but no landline phone) are also especially likely to use the apps on their phone. Some 75% of this group who have apps say they use them. This may be due in part to a disproportionate number of cell only adults relying on their phones for internet access and participation in online activities.⁵

It is not surprising that adults who are heavy cell users in general (heavy texters and heavy voice users) are much more likely than other adults to use their apps and to have used them in the past 30 days.  The relationship between apps use and the use of other cell phone features/technologies is discussed in detail in Part III of this report. 

Overall, adults who have more apps on their phone, those who have downloaded apps (as opposed to purchasing a phone that is preloaded with apps), those who have downloaded an app recently (within the past 30 days), and those who have paid for an app download are significantly more likely than other adults to actually use the software on their phones.  

Among those who have apps, the average number of apps is fairly high at 18

Among adult cell phone users who have software applications on their cell phones, the mean number of apps is 18.  However, the median number of apps is 10, indicating there are heavy apps users on the high end of the response scale who have a disproportionate number of apps on their phones.  This is particularly true among the youngest adults.

Again, there is some uncertainty among cell phone users, particularly older cell phone users, about what software they have on their phones.  Fully 18% of cell phone users with apps on their phones do not know how many they have.  That figure doubles to 36% among cell phone users age 50 and older.

Looking just at those who know how many apps they have, young adult cell phone users on average have a greater number of apps on their phones.  The mean number of apps for 18-29 year-olds is 22, compared with a mean of 16 for 30-49 year-olds, and 13 for adult cell phone users age 50 and older.  However, the medians show considerably less variation, with young adults having a median of 12 apps on their phone and those over age 50 having a median of 8. 

Apps use ranks relatively low when compared with other cell phone activities

While 24% of adults, or 29% of adult cell phone users, report using apps on their phones, apps use is not the most popular feature of cell phones when compared with other non-voice cell phone activities.  Taking pictures and texting are far and away the most popular cell phone activities, with apps use ranking lowest among the various activities Pew Internet has asked about.

These data may reveal again, however, some uncertainty among adult cell phone users about when they are, and are not, using apps.  Many of the activities in the above table, such as playing a game and sending and receiving email, often make use of software applications, and therefore constitute apps use.  Thus, one would expect the percent who say they use apps to be higher.  Yet, apps use garners a slightly lower percentage of “yes” responses from cell phone users than do other app-enabled activities. 

One might infer from these figures that adults are not always aware when engaging in various activities using their phones that they are, in fact, using an app or software application.  This may be due, in part, to confusion among the public over whether the different software that comes preloaded on their phone are “apps,” or whether an app is something that must be purchased separately or downloaded from the internet.

 Part 2: Apps downloading

The downloading population is demographically skewed

As noted above, while 43% of adult cell phone users have apps on their phone, significantly fewer (29%) have actually downloaded an app.  The remaining 14% only have preloaded apps on their phone.  Apps downloaders are slightly different demographically from those who have only preloaded apps, and are distinct from cell phone users in general.

The downloading population is demographically skewed

As with the apps-using population as a whole, apps downloaders are younger, more educated, and disproportionately male when compared with the full U.S. adult population.  When downloaders are compared just to other adults with apps—those who have preloaded apps but do not download—they are similar in their educational attainment yet are still disproportionately young and male.   

One in ten adults with a cell phone has downloaded an app in the past week; one in five 18-29 year-old cell phone users has done so

In the Pew Internet survey, respondents who had downloaded apps were asked when their most recent download had occurred.  About half (53%) say their most recent apps download was in the past 30 days, including 33% who say their last download was within the past week.  As a fraction of all cell phone-using adults, that equates to 15% who have downloaded an app in the past month, including 10% who have downloaded an app in the past week. 

Thus, even among downloaders, the portion who is very actively engaged in apps culture is relatively small.  A significant percentage of downloaders, 43%, say they have not downloaded an app in more than a month.

Again, it is the youngest adult cell phone users leading the way, with 62% of 18-29 year-old apps downloaders having downloaded software to their phone in the past month (including 39% in the past week).  That equates to 20% of adult cell phone owners under age 30 who had downloaded an app to their phone in the past week. 

One in eight adults with a cell phone has paid to download an app

Among the one-third of adult cell phone users who download apps, just under half (47%) have paid for an app, with the remainder saying they only download apps that are free.  Put in broader context, that means that 13% of all adult cell phone users have paid to download an app to their phone.  The more apps someone has on her phone, the more likely she is to have paid for one at some point. 

There are very few notable demographic differences between downloaders who pay for apps and those who do not.  Only one subgroup of downloaders stands out in this regard, and that is heavy cell voice users.  Downloaders who make more than 30 calls on their phone per day are significantly more likely than other downloaders to have paid for an app (61% v. 45%). 

For more on what types of apps downloaders pay for, and how much they spend, see Part IV of this report. 

 Part 3: Mobile computing

 The transition to mobile computing devices

The rise of “apps culture” reflects the transition of cell phones from voice communication devices to mobile computing devices.  As cell phone use in general increases, wireless internet use is also on the rise, particularly among Hispanic and African-American adults.⁶  Fully 59% of adults are now mobile internet users, meaning they access the internet wirelessly via a laptop or cell phone.  As mobile computing and internet use become the norm, cell phones are increasingly taking on functions once served by desktops and laptops.  And for a significant portion of low income and nonwhite adults, cell phones represent their only means of accessing the internet and engaging in some online activities.  Thus, many adults today expect (and need) their phones to serve a wide range of functions.  

As one might expect, adult cell phone users who embrace “apps culture” also tend to embrace other cell features and other technologies in general.  These patterns are difficult to disentangle, as there are circular relationships between apps use and the use of the internet and other technologies.  For instance, social media users (adults who use either social network sites such as Facebook or status update sites such as Twitter) are twice as likely as other cell phone users to have apps on their phones (59% v. 24%). Yet many cell phone apps enable social media use, and these apps are in fact among the most popular (see Part IV of this report).  Likewise, wireless internet users are more likely than other online adults to be apps users.  Yet downloading an application in and of itself requires wireless internet access, which would mean that apps downloaders are wireless internet users by default.  Moreover, these relationships are even further complicated by the fact that not all cell-using adults recognize activities they engage in on their phones as app-enabled, when in fact they might be. 

Therefore, rather than pinpoint causal direction in these relationships, in this section we simply show the strong correlations between apps use and various online activities, cell phone activities, and technology use in general. 

Heavy technology users are particularly likely to have apps on their phones and to use the apps they have

As noted earlier in the report, 38% of cell phone users have purchased a phone with preloaded apps and 29% have downloaded an app themselves.  About a quarter of adult cell phone users (23%) have both paid and preloaded apps on their phones.  Not surprisingly, heavy technology users are more likely than other adults to both download apps and to purchase phones with apps.

As the above table indicates, adult cell phone users who use the text features on their phones, and particularly heavy texters (those who send more than 50 texts on a typical day), are significantly more likely than other cell phone users to download apps.  About four in ten texters (39%) have downloaded an app, a figure that drops to just 4% among adult cell phone users who do not text.  Among the heaviest texters, those who send and receive more than 50 texts a day, 63% have downloaded an app to their phone.

Heavy technology users on average have more apps on their phones

As one might expect, heavy technology users in general tend to have more apps on their phones than cell phone users who do not embrace other technologies. The table below shows that some of the highest reported mean numbers of apps are among heavy cell voice users and heavy texters.  Cell-using adults who have premium broadband at home, those who use status update sites such as Twitter and adults who go online from their phones on a daily basis also report a higher average number of apps on their phones. These groups are also especially likely to report using the apps they have.

App users are more likely to take advantage of all of their phone’s features

Overall, apps users are significantly more likely than other adult cell phone users to take advantage of every feature of their cell phone asked about in the survey, including email, texting, taking pictures, playing music, instant messaging, recording a video, playing a game, accessing the internet, purchasing a product online, and accessing social networking sites from their phone. 

Again, it is important to note that apps use and use of these other cell phone features are not mutually exclusive.  Many of these activities make use of apps, and apps that enable these activities are among the most popular downloads (see Part IV of this report). 

It is also important to note that these figures include adults whose phones may not be equipped to perform some of these tasks.  Apps users are likely to have phones that are able to perform more of these functions, which explains, in part, their higher reported use of different phone features. 

Apps users are more engaged in a wide range of online activities

Due in part to the web accessibility and increased engagement many apps provide, it is logical that apps users are more likely than other adults to engage in almost every online activity asked about in the survey.  They are particularly likely to use social network sites such as Facebook and status update sites such as Twitter when compared with internet users as a whole. 

 Part 4: The Nielsen Apps Playbook  

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 Apps and app users

As part of its ongoing research into telecom trends, the Nielsen Company conducts a quarterly tracking survey of more than 80,000 mobile subscribers age 13 and older sampled from a combination of online panels and augmented with listed Hispanic telephone sample.  Among other measures, the Mobile Insights survey identifies mobile subscribers who have downloaded an app to their phone.  In the fourth quarter of 2009, Nielsen found that 13% of their adult (age 18 and older) mobile subscribers had downloaded an app in the past 30 days.  As noted earlier, the current Pew Internet survey finds that as of April 2010, 15% of cell-phone using U.S. adults age 18 and older had downloaded an app to their phone in the past 30 days.

In December 2009, Nielsen completed online, self-administered surveys with 4,265 apps downloaders originally identified in the Mobile Insights survey.  This follow-up survey (The Nielsen Apps Playbook) asked “recent downloaders”—those who had downloaded apps in the past 30 days—more detailed questions about the types of apps they download, in what contexts they use their apps, and whether and how much they pay for apps.  The results reported here are based on the 3,962 adults ages 18 and older in the Nielsen sample who had downloaded an app in the past 30 days.

It should be noted that because Nielsen’s Mobile Insights survey is administered to a nonprobabilty sample, it is not representative of all recent apps downloaders and the findings reported here should be considered descriptive.  However, the Nielsen data produce overall estimates of adult apps downloading rates comparable to the most recent Pew Internet survey.  As the table below indicates, after weighting, the two samples are similar in terms of sex and race/ethnicity, though the Nielsen sample is skewed slightly toward white non-Hispanics and away from African-Americans.  The two samples diverge more notably on education and income, with the Nielsen sample overrepresenting college graduates and the highest income categories.  In terms of age, the Pew probability sample produces a recent-downloader population that is slightly older than the Nielsen sample.

Adult apps users are hooked on games

As indicated by the Pew Internet survey data, apps downloading and apps use are not synonymous.  Some adults may download apps that they do not actually use.  Thus, the Nielsen App Playbook asks about both recent downloading behavior, as well as which apps recent-downloaders have used in the past 30 days, how frequently they use them, and in what contexts.

As the table below indicates, the adult downloaders in the Nielsen sample are hooked on games.  Six in ten of these recent downloaders said that they had used a game app in the past 30 days.  By comparison, roughly half said they had used a news/weather app, map/navigation app, or social networking app in that same timeframe.  While music apps ranked second in terms of total downloads, they ranked fifth on the most used list for this group.

In the Nielsen sample, some demographic groups were more likely than others to use particular categories of apps.  For instance, men in that sample were more likely than women to have used banking/finance, sports, productivity, and video/movie apps in the past 30 days.  Women recent-downloaders in the sample, on the other hand, were more likely to have used games, social networking, music, and entertainment/food apps. 

The tables below show rates of use for the major categories of apps across demographic groups.

Within the different categories of software applications, some apps stood out as particularly popular among the Nielsen sample.  Asked which specific apps they had used in the past 30 days, puzzle/strategy games ranked highest in the games category, while the Weather Channel was far and away the most used news/weather app for this group.  Google applications comprised three of the top four map/navigation/search apps, while Facebook topped the list of social networking apps used by Nielsen’s adult downloaders. 

Frequency of Apps Use

More than half of the Nielsen recent apps downloaders (57%) reported using their apps daily, yet the vast majority said they spend less than 30 minutes per day using their apps.  Just one quarter of Nielsen’s downloaders (23%) said they use their apps for at least a half an hour a day.

Somewhat surprising is the fact that the youngest apps downloaders in the Nielsen sample, those age 18-24, were not the most frequent apps users.  While 29% of this age group said they use their apps multiple times a day, the same was true of 44% of the 25-34 year-olds and 44% of those age 35 and older.  Nielsen’s young apps users were also more likely than their older counterparts to say they use their apps for less than 30 minutes per day (84% of the 18-24 year-olds v. 74% of the 25-34 year-olds v. 75% of those age 35 and older).

Among Nielsen’s sample of downloaders, the frequency of apps use varied by race as well, with the white and Hispanic downloaders more likely than the African-Americans to use their apps daily (57% whites v. 54% Hispanics v. 48% African-Americans).  However, Nielsen’s white apps downloaders were also the most likely to say that they use their apps for less than 10 minutes a day (30% whites v. 25% Hispanics v. 23% African-Americans). 

Adult downloaders in the Nielsen sample reported using their apps in a variety of contexts.  Asked in which situations they most frequently use their apps, seven in ten (71%) said they frequently use their apps when they are alone, and about half said they frequently use their apps while they are waiting for someone or something (53%) or while at work (47%).  Roughly one in three Nielsen downloaders (36%) said they frequently use their apps while commuting.  Overall, the adults in the Nielsen sample reported using their apps for a mix of entertainment and instrumental purposes. 

In the Nielsen sample, men were more likely to report using apps at work (52% v. 40% of women), while women were slightly more likely to report using apps while alone (73% v. 70% of men) and while waiting for someone (59% v. 52%).  Nielsen’s Hispanic and African-American downloaders were more likely than the whites in the sample to report using their apps at school (17% Hispanics v. 17% African-Americans v. 6% whites) and while socializing with friends (33% Hispanics v. 33% African-Americans v. 22% whites).  The Hispanics in the sample were also more likely than whites to report using their apps while commuting, while finding a place to eat, and while shopping. 

The Nielsen sample also produced some interesting situational use differences across age groups.  The table below shows that young adult apps users in the Nielsen sample (those age 18-24) were the most likely to report using their apps while socializing with friends, while Nielsen’s middle-age users were the most likely to report using their apps while at work, commuting, shopping or finding a place to eat.  App users age 55 and older in the Nielsen sample were the most likely to report using their apps while alone, while waiting for someone/something, and to help in an activity they are currently doing.

What kinds of apps are being downloaded most often by this group?

Among Nielsen’s recent adult downloaders, game apps were the most downloaded apps overall in terms of sheer volume, followed distantly by music and entertainment/food.  Overall, apps that are used for personal entertainment made up a greater portion of this group’s recent downloads than those that are used for instrumental purposes, such as productivity, navigation, and finance apps. 

For the Nielsen sample, games and music were the most popular in terms of the percent of downloaders who have downloaded each type in the past 30 days.  Games were far and away the most popular, with almost half of Nielsen’s recent-downloaders saying they had downloaded at least one paid or free game app in the previous month.  Roughly equal percentages of Nielsen recent-downloaders (about one in five) said they had downloaded a music app, a news/weather app, a social networking app, a map/navigation app, or a food/entertainment app in the 30 days prior to the survey.

Games and music were also the most commonly downloaded paid apps for this group, as measured by the percent of Nielsen recent-downloaders who had purchased at least one of these types of apps in the past month.

The Nielsen sample produced some interesting downloading differences across age group, race/ethnic groups, and income categories, yet these differences only occurred in the case of free downloads.  For instance, Nielsen downloaders between the ages of 25 and 44 had a higher mean number of free game downloads in the past 30 days (2.0) than both the younger (1.4) and the older (1.7) adults in the sample.  Similarly, downloaders ages 25-34 in the Nielsen sample had the highest mean number of free social networking apps downloads in the month prior to the survey (.9 for the 25-34 year-olds v. .5 for the younger adults and .7 for the older adults).

The tables below show some demographic differences that emerged in the Nielsen sample in the mean number of free downloads for major categories of apps.

Consistent with the Pew Internet survey data, the Nielsen sample produced few notable demographic differences between recent-downloaders who have paid to download an app and those who have not.  Nielsen’s youngest apps downloaders, those age 18-24, and adults with incomes below $50,000 were only slightly less likely than the older and more affluent downloaders in the sample to have paid for apps. 

What do Nielsen’s downloaders report paying for apps?

In the Nielsen Apps Playbook, 37% of the recent-downloaders said they had paid for an app in the past 30 days.  As noted earlier, games accounted for the highest percentage of paid apps by this group, followed by music apps.  Asked if they had ever converted from a free/lite trial version to a full paid version of an app, one in three (33%) Nielsen downloaders said they had done so.

To determine what the recent-downloaders are paying for apps, the Apps Playbook asked respondents how many of the total apps they had downloaded in the past 30 days fell into each of eight different price categories.  Responses indicate that among this sample of downloaders, most paid downloads were between $0 and $2.99.  Fully 60% of paid downloads from the month prior to the survey fell in this price range. 

When they did pay for an app, about a third (34%) of the downloaders in the Nielsen sample said their preference was to have it billed directly by their cell phone provider, while just under a third (29%) said they preferred to put it on a credit card.  Asked what factors drive those preferences, eight in ten Nielsen downloaders (80%) said that convenience was a factor, while roughly six in ten said they take into account bill consolidation (63%) and security (57%).

Where do downloaders say they learn about apps?

Asked how they discover the apps they download, the two most common responses from downloaders in the Nielsen sample were searching an apps store on their phone and relying on recommendations from friends and family.   About half (49%) of this group said they discover apps by browsing an apps store on their phones, and about one in three (34%) said they hear about them from friends and family. 

The women in the sample were slightly more likely than the men to say they learn about apps from friends and family (39% v. 33%), while the men were twice as likely to say they learn about apps from third party websites (25% v. 12%).  Nielsen’s older apps downloaders, those age 55+, were also particularly likely to say they hear about apps from friends and family (42% v. 34%), and were twice as likely as the younger apps downloaders in the sample to discover apps through newspapers, magazines and radio (15% v. 7%). 

In the Nielsen sample, apps downloaders in the highest income categories, those earning $100,000 or more annually, were particularly likely to say they discover apps by searching the apps store on their phones and through sync software, while those in the lower income categories were more likely to say they hear about apps through their carrier’s homepage. 

The African-American and Hispanic downloaders in the sample were also particularly likely to say they find apps through their carrier’s homepage (25% African-American v. 18% Hispanic v. 12% white) and their device homepage (24% African-American v. 19% Hispanic v. 15% white).  

Nielsen’s downloaders reported not only relying on the recommendations of friends and family in downloading apps, but also relying on the recommendations of strangers.  The Nielsen App Playbook asked recent-downloaders how important user reviews and ratings are in their decision to download an app.  Almost nine in ten downloaders in this survey (88%) said that user reviews are at least somewhat important, including 19% who said they are extremely important.

Cell phone real estate is valuable

Most apps users in the Nielsen sample report organizing their apps so that the most frequently used are most easily accessible. They also report deleting apps from their phones.  The most common reasons given by this group for deleting an app is that it is not useful.  And they report that this culling process happens relatively quickly; among those who had deleted an app, the majority (62%) said they usually did it within two weeks of downloading the software.  The men in the sample tended to delete apps they did not find useful more quickly than the women did; 40% of the male recent-downloaders said they deleted apps they do not like within a week of getting them, while only 29% of the women said they delete apps that quickly. 

¹ In probability sampling, all individuals in the population have some opportunity of being included in the sample, and the mathematical probability that any one of them will be selected can be calculated. In nonprobability sampling, individuals are selected on the basis of their availability (e.g., volunteering for an online panel) and an unknown portion of the population is excluded (e.g., those who did not volunteer). Because Nielsen’s Mobile Insights survey is administered to a nonprobabilty sample, the results cannot be projected to the entire population of recent apps downloaders and the findings reported here should be considered descriptive. When compared to the Pew Internet probability sample, the Nielsen sample of recent-downloaders is similar in racial/ethnic and gender makeup, but overrepresents high income adults and college graduates. It also skews younger than the Pew sample.

² For more on the popularity of games and other apps among mobile subscribers, see Nielsen’s September 9, 2010 report “Games Dominate America’s Growing Appetite for Mobile Apps.” Available at: http://blog.nielsen.com/nielsenwire/online_mobile/games-dominate-americas-growing-appetite-for-mobile-apps/

³ Kaiser Family Foundation, Generation M2: Media in the Lives of 8 to 18 year-olds, January 2010. Available at: http://www.kff.org/entmedia/upload/8010.pdf

⁴ Aaron Smith, Mobile Access 2010, July 7, 2010. Available at: http://pewinternet.org/Reports/2010 /Mobile-Access-2010.aspx

⁵ In the current Pew Internet Project survey, adult cell phone users who either only have a cell phone or who have a landline but rely mainly on their cell phone to make calls are significantly more likely than other adults to be wireless internet users (74% of cell only adults and 86% of dual phone users who rely mainly on their cell are wireless internet users, compared with just 47% of other adults).

⁶ Aaron Smith, Mobile Access 2010, July 7, 2010. Available at: http://pewinternet.org/Reports/2010 /Mobile-Access-2010.aspx

 Methodology and topline

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 Pew Internet Project Survey

This report is based on the findings of a daily tracking survey on Americans’ use of the Internet. The results in this report are based on data from telephone interviews conducted by Princeton Survey Research Associates International between April 29 and May 30, 2010, among a sample of 2,252 adults, age 18 and older.  Interviews were conducted in English.  For results based on the total sample, one can say with 95% confidence that the error attributable to sampling and other random effects is plus or minus 2.4 percentage points.  For results based on cell phone users (n=1,917), the margin of sampling error is plus or minus 2.7 percentage points.  In addition to sampling error, question wording and practical difficulties in conducting telephone surveys may introduce some error or bias into the findings of opinion polls.

A combination of landline and cellular random digit dial (RDD) samples was used to represent all adults in the continental United States who have access to either a landline or cellular telephone. Both samples were provided by Survey Sampling International, LLC (SSI) according to PSRAI specifications.  Numbers for the landline sample were selected with probabilities in proportion to their share of listed telephone households from active blocks (area code + exchange + two-digit block number) that contained three or more residential directory listings. The cellular sample was not list-assisted, but was drawn through a systematic sampling from dedicated wireless 100-blocks and shared service 100-blocks with no directory-listed landline numbers.

New sample was released daily and was kept in the field for at least five days. The sample was released in replicates, which are representative subsamples of the larger population. This ensures that complete call procedures were followed for the entire sample.  At least 7 attempts were made to complete an interview at a sampled telephone number. The calls were staggered over times of day and days of the week to maximize the chances of making contact with a potential respondent. Each number received at least one daytime call in an attempt to find someone available. For the landline sample, half of the time interviewers first asked to speak with the youngest adult male currently at home. If no male was at home at the time of the call, interviewers asked to speak with the youngest adult female. For the other half of the contacts interviewers first asked to speak with the youngest adult female currently at home. If no female was available, interviewers asked to speak with the youngest adult male at home. For the cellular sample, interviews were conducted with the person who answered the phone. Interviewers verified that the person was an adult and in a safe place before administering the survey. Cellular sample respondents were offered a post-paid cash incentive for their participation. All interviews completed on any given day were considered to be the final sample for that day.

Non-response in telephone interviews produces some known biases in survey-derived estimates because participation tends to vary for different subgroups of the population, and these subgroups are likely to vary also on questions of substantive interest. In order to compensate for these known biases, the sample data are weighted in analysis. The demographic weighting parameters are derived from a special analysis of the most recently available Census Bureau’s March 2009 Annual Social and Economic Supplement. This analysis produces population parameters for the demographic characteristics of adults age 18 or older. These parameters are then compared with the sample characteristics to construct sample weights. The weights are derived using an iterative technique that simultaneously balances the distribution of all weighting parameters.

Following is the full disposition of all sampled telephone numbers:

The disposition reports all of the sampled telephone numbers ever dialed from the original telephone number samples. The response rate estimates the fraction of all eligible respondents in the sample that were ultimately interviewed. At PSRAI it is calculated by taking the product of three component rates:

• Contact rate – the proportion of working numbers where a request for interview was made
• Cooperation rate – the proportion of contacted numbers where a consent for interview was at least initially obtained, versus those refused
• Completion rate – the proportion of initially cooperating and eligible interviews that were completed

Thus the response rate for the landline sample was 21.8 percent. The response rate for the cellular sample was 19.3 percent.

Since Apple raised the profile of mobile phone apps two years ago, it appears smartphone owners are downloading more apps onto their devices than ever before.

According to a new survey by Nielsen of more than 4,000 smartphone users who have downloaded at least one app in the past 30 days, the average number of apps they have on their mobile phones has increased to 27 by August 2010, from 22 last December.

Apple’s iPhone users significantly tops the list with an average of 40 Apps on their device.  Android and Blackberry owners’ app usage has also steadily increased to 25 apps and 14 apps, respectively, from 22 apps and 10 apps last December.

Nielsen said games are still the most popular category of downloads, but weather, maps/navigation and social networking apps are also becoming significant categories. Facebook is the most popular individual app across all platforms according to Nielsen. (Nielsen release)

However, before  joining the app frenzy organisations should consider the basics – ‘WHY’ and ‘WHAT’.  Only then should they start to think about the ‘HOW’. Organisations need to stop thinking tactically, not be drawn in by the hype, media, technology buzz surrounding mobile.

We see so many organisations investing in mobile without really understanding what they are getting themselves into. Many are spending large sums of money and sadly will likely see very little return (or even worse create negative brand perception amongst consumers). Why?  They are delivering tactical solutions – failing to recognise the addressable market, the mobile environment, understand the ongoing costs of their decisions, falling short of consumer expectations, led by people who are not acting in their best interests.

At Indigo 102 we specialising in bringing out the realities – communicate the benefits and risks – at the early stages. We work with organisations to build mobile strategies that deliver value over time and develop services that are sustainable. If we can support you to invest wisely and establish a sustainable mobile platform get in touch (martin@indigo102.com).

(Follow us on twitter : @indigo102)

Study Shows Double Digit Growth of Local Mobile Usage, Unlocking Access to Younger, Wealthier, On-the-Go Consumers

“A US report published today by Comscore and the Yellow Pages association has shown that Consumers looking for local businesses are increasingly turning to their mobile devices to access Internet Yellow Pages and local sites, while similar local searches performed on personal computers grew at a steady but slower pace.

The number of mobile subscribers accessing business directories on a mobile phone increased 14 percent year-over-year to 17.3 million users in March 2010, extending the reach of Internet Yellow Pages beyond just the personal computer. This increase outpaced 10 percent growth in the number of mobile media users who browsed the mobile web, used applications or downloaded content during the same time period.

“Mobile offers significant opportunity, both for consumers who need convenient and reliable sources of local information on-the-go, and also for local search providers that are making this content available in new and innovative ways,” said Neg Norton, president, YPA. “Yellow Pages and other local sites that have a legacy for providing trusted local business information via print directories and Web search tools are best poised to take advantage of this phenomenally versatile and interactive media. Mobile allows them to extend Internet Yellow Pages to consumers wherever they are.”"

The greatest challenge for many traditional media organisations is that they simply do not understand how they can open the mobile channel and get it to start paying dividends. Although they are the best placed to commercialise and win big, many are simply not developing the foundation required to succeed - most seem like rabbits caught in a cars headlights, bamboozled by technology and swayed by the seeming ‘cool’ factor. For many knee jerk tactical development has usurped strategy - this will cost dear in the long term (a grave mistake as they have discovered in the fixed online environment) unless they start taking steps to rectify now. Mobile does not have to be the same as the fixed online environment.

Not surprising is the next part of the study – Mobile browsers are the most common method to access services, what is more surpising is the massively dispropotionate expenditure being directed towards the development of applications. WHY? Again I can only suggest a knee jerk reaction (see iSyndrome – why limit your slice ofthe pie?). Organisations need to be thinking about adopting a balanced approach, one that will enable them to capture users and importantly retain them in the long term. The highly fragmented approaches that many have adopted this is going to be very challenging to do in a cost effective way.    

“Apps and Mobile Browsers Clock in Growth

Mobile browser was the most common access method for users, with 10.8 million subscribers in March 2010 and 21 percent year-over-year growth. But even as the browser remained the most used mobile feature for access, apps grew at a more rapid pace with 42 percent year-over-year growth, totaling 4.1 million subscribers in March 2010.”

“Mobile Users Are Desirable Consumers

The comScore study finds that mobile media attracts a highly desirable consumer segment for advertisers. Mobile usage of business directories unlocks a younger, wealthier user base to advertisers. According to the report:

• 58 percent are 34 or younger.
• Over half have a household income in excess of $75,000.
• The number of people accessing business directories on a mobile device at least once per week increased more than 16 percent year-over-year to nearly five million in March 2010.

Mobile users also access content that is attractive for many advertisers. Mobile users who access business directories are three and half times more likely as the average mobile media user to access women’s magazine content, health information, real estate listings, and job listings via their mobile devices.

Local Search on Personal Computers

As local mobile grew double digits, local searches on personal computers saw single digit growth year-over-year. Searches on Internet Yellow Pages and portal sites increased 4 percent to 444 million in March 2010, or 5.3 billion annually. The overall universe of core web search — where users search for any kind of information on a major Internet search portal like Google or Bing — increased 8 percent to 15.4 billion searches in March 2010, or 187.3 billion annually.

Diving deeper into personal computer usage, people access Internet Yellow Pages and local online sites in a number of ways. Some visit Internet Yellow Pages sites directly by typing in the URL or with a bookmark, while others access Internet Yellow Pages through feed from other sites such as Google and Yahoo. Traffic to Internet Yellow Pages from these web search sites increased three points from the first quarter of 2009 to the first quarter of 2010, to 44 percent of visits. Direct traffic also increased over the same time period, up four points to 32 percent, while referrals from affiliate sites (advertisements, e-mail marketing, and other partner sites) decreased six points to 25 percent.

“What’s incredible about the growth in local search is that, even during a time of recession when many consumers reined in spending, the need to find a local business certainly didn’t go away,” said Norton. “Whether it is on a personal computer or a mobile device, consumers have more media choices than ever to find a product or service when they are ready to buy. Advertisers should be considering a multiplatform approach that combines a print, online, and mobile strategy designed with their target consumer in mind.”"

The oportunity is clearly there - literally staring Traditional media owners in the face - the reality is that many will simply not capitalise as they do not understand or see that mobile is very different to what has gone before. They need to get experienced players in that can help them lay down the strategic foundation and cut through the tactical distractions.

At Indigo 102 we specialising in bringing out the realities – communicate the benefits and risks – at the early stages. We work with organisations to build mobile strategies that deliver value over time and develop services that are sustainable. If we can support you to invest wisely and establish a sustainable mobile platform get in touch (martin@indigo102.com).

Mobile. Touch. Web

In the past 15 years technology has changed in ways that no one could have forseen. Now with the convergence of the mobile Web and touch screen technology we’re embarking on another journey into the unpredictable. However… 

A Collaborative vision

If we’re all heading in the same direction why not make use of the hive mind to prepare ourselves? We asked some leading industry thinkers what they thought. To make it easier to digest we’ve grouped these thoughts into common themes.

Take a look at what other people are thinking.

Welcome to the 217^th edition of Carnival of the Mobilists. This week it is again the turn of leading mobile strategist Martin Wilson of Indigo102 to provide his take on a week in mobile.

A week in mobile is never a dull affair.

The mobile buzz has continued in no uncertain terms; two major US events completed – South by South West, in Austin Texas and CTIA, Las Vegas Nevada. M&A activity continuing – Amdocs snapping up UK based MX Telecom, Nokia buying Chicago based mobile browser operator Novarro. Location based services and advertising still a major topic of conversation, Martin gives his view on the challenges and who he believes have potential to win out.

 A theme that seemed to resonate in a number of posts this week; People are key, their needs may not always be placed at the forefront of thinking! (We will let you judge). 

Here are some of the week’s highlights – we hope you enjoy the read.

EVENTS

The dates announced for the forthcoming Mobile 2.0 Europe 2010 – June 16th and 17th 2010 – the talk ‘Emerging Mobile Ecosystem and Disruptive Mobile Innovation’.

Another year of CTIA, event round-up through the eyes of Chetan Sharma – Ground Hog day or has the industry moved on? New devices, Network upgrades, mHealth, increasing focus towards developers and everyone talking about a ‘Revolution’ (?).

MONEY MAKERS

Location, Location, Location – Martin Wilson posts a Guest column at mSearchgroove. Advertising based on location is set to be the most valuable and highly contested sectors – the winners may not be who you think!

Mobile 2.0 – Because You’re Worth-it – Volker Hirsh, critics the Juniper forecasts for Mobile 2.0 as not being potentially lofty enough, have they missed the mash-up?     

New developer models – James Coops from Mobyaffiliates, talks up the potential for affiliate programs to support delivering value to app developers.

CUSTOMER’S WORLD

App (or not?) debate continues over at PSFK. Jeff Swystun, Chief Communications Officer for DDB Worldwide, suggests we are at an amazing pivot point where all channels of communication are valid – What, Who and the best Way, the questions for marketers?

Mobile Commerce is real, just ask Ebay and Amazon – Carl Martin at Redweb – points out the principles and argues that apps can segment and isolate – ‘look into the mobile web before taking the application route’.

Firefox Windows Mobile fire goes out – Tam Hanna – believes customers will now be left in the rain and frustrated as Mozilla puts their Windows Mobile development on hold. The Opera door opens.

HEADLESS

Herding chickens (or Cats?) – Declan Lonergan from the Yankee Group, accuses the mobile operators of being in danger of neglecting traditional services and alienation of profitable customers.

Whose mistake? Yours! – Mark Bridge of TheFoncast – argues; just admit the mistake is your own. Don’t blame the manufacturer or network operator!

LEARNING & DIALOGUE

The educating power of mobile Judy Breck gives an insight to how mobile offers individual kids the unrestricted opportunity to learn – Handschooling.

Spill the berries – unintended consequences – Russell Buckley at Mobhappy, following his visit to ArabNet; provides an interesting anecdotal insight into why BlackBerry maybe booming in the Middle East, and a lucrative premium grey market.

HELP IN HAND

Fortunately there is a solution – Dennis Bournique of wapreview.com. Highlights the trials and tribulations of the Android G1 and Magic [limited RAM] and gives guidance on making the most of a compromised device.

Hope you agree that there is some great content this week. Please keep your submissions coming in; email – Carnival of the Mobilists

Next Monday head over to Mobsessed for the next instalment of the Carnival of the Mobilists from Carl Martin.

ABOUT

Carnival of the Mobilists – the weekly line-up of top-notch mobile blogging from experts and mobile passionatas — the Carnival exposes you to the very best posts of the previous week, all written about mobile and gathered together in a central place. You can read the summary on the host’s site and click on any story that catches your eye. Each week, it’ll be hosted at a different site, so you can visit the Carnival and experience both new writers about mobile, as well as all your old favourites.

Martin Wilson – has been involved in digital media for over 14 years, during which time he gained a wealth of experience in the fixed line and mobile Internet, and a deep understanding of the local space. In January 2008, Martin established Indigo 102, an independent consultancy, to assist organisations (including digital advertising agencies, directory publishers, media owners and online service providers) take their brands – and value propositions – mobile. In this role Martin has supported the development and launch of mass market mobile services across three continents. You can contact Martin directly (martin@indigo102.com) and follow on Twitter (@indigo102). 

Image by foreversouls 

Guest post published on mSearchGroove 

EDITOR’S NOTE: Mobile advertising is certain the hot topic at CTIA, where Mobile Web And Apps World Forum (Ajit Jaokar’s CTIA partner event) was standing room only. (Well done Ajit!) Players from across the ecosystem are anxious to explore new models to monetize inventory, apps and services. However, as I pointed out during my panel — moderated by well-known analyst and author Chetan Sharma – there’s still is a lot of mileage left in established models such as text and MMS approaches to advertising before we focus too much of our effort on the whiz-bang new ad units and creatives. In his guest contribution, Martin Wilson – MSG columnist and owner of Indigo 102, a strategic consultancy with a focus on media and mobility and a deep understanding of the local space— argues that traditional media owners also have a lot of untapped energy and assets.

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Advertising based on location is set to be the most valuable and highly contested sectors as players including AdMob, AOL/ Third Screen Media, Jumptap, Millennial Media, and Quattro Wireless jockey for position. Who will be in the winners’ circle? So far, traditional media owners and directory publishers appear to be the laggards and not the leaders in this race – although they clearly have the capabilities mix to dominate this space. Why are they hell-bent on missing the boat? Martin Wilson argues traditional media owners and directory publishers can still be among the champions, not the casualties, provided they act fast.

Mobile advertising has come a long way in a short time. No need to ask ourselves when it finally be the “year of mobile advertising” because the recent flurry of activity tells us mobile advertising has arrived.

First, it was the milestone acquisitions – Google buying AdMob, Apple snapping up Quattro Wireless and Opera surprising us by purchasing AdMarvel. Then it was the funding – Millennial Media led by New Enterprise Associates and Glam Media led by Aeris Capital – that sealed it. Mobile advertising has been validated.

Almost overnight our attention has turned from fixed online advertising to mobile. Now mobile – a personal device that enables brands to market to an audience of one – is widely regarded as the Next Frontier companies must conquer. Little wonder that companies – including Apple, Facebook, Google, Millennial Media and Yahoo – are lining up to do just this.

The market is crowding and muddying our understanding of what matters most.

Predictably, we want to reuse our understanding of old media (online and TV, for example) to comprehend the role and importance of mobile, the new mass media. Thus, we are fixated on size and those players with high volume inventory. Unfortunately, mobile advertising is not just the same numbers game.

Take the narrow view communicated in a controversial report by U.S. research agency Interactive Data Corp (IDC). It estimated the total 2009 mobile advertising spend in the U.S. at around $290 million, a figure based on total page impressions. It calculated market share according to share of total spend and concluded Millennial Media leads the pack with 18 percent ($51 million), followed by AdMob with 14 percent ($40 million), Google with 10 percent ($28 million) and Quattro Wireless in sixth place with 7 percent ($21 million.).

It was also reported by IDC that Glam Media counts 160 million monthly visits to the sites they control or represent, resulting in some 2.5 billion page views. Does this make them a market leader?

Maybe on paper.

However, as I argue in this column, it’s not about page impressions. That is not where the battle will be fought (or won, for that matter).

RAISE YOUR GLOVES

The money is in local advertising, or more accurately advertising based on location. That’s not just my view. Google has been clear about its interest in local online mobile content – and its intention to own the space. In its fourth-quarter earnings call, Google described local mobile advertising as a “huge” opportunity and more recently at the 2010 Mobile World Congress (MWC) claimed to have made mobile its number one priority.

Interestingly, going local (delivering advertising based on location) brings with it a whole new challenge. For one, it is infinitely more difficult to deliver relevant advertising to people
(which is the way brands must deliver advertising on a personal device such as our mobile phones). The opportunity to target an individual based on location is hugely powerful, but the room for error in these brand messages is frightfully slim. Get it wrong and the advertising performance diminishes — significantly.

Put another way, local advertising can’t be a matter of hit-or-miss. Generic advertising is a “fail” and tactical, targeted advertising is – literally – spot-on.

But it sounds easier than it is. This approach – though essential – flies in the face of how we measure advertising success. Suddenly, our singular focus on numbers and quantity (high volume and market share) is irrelevant. Local means delivering quality advertising. It also requires a totally new skillset, a whole new understanding of what we mean by context and how we should deliver relevant advertising.

WHAT IS ‘LOCAL’

If you say ‘mobile’ and ‘local’ in the same sentence, two scenarios spring to mind: ‘where I am now’ and ‘where I am going to be’. But which one is it? It depends. A common mistake is to assume your current location is important, that your location at that point in time is key.

Often it is not.

Mobile is about being ‘mobile.’ It’s about roaming. Mobile location can be a related to a number of things, places nearby or places close to my final destination. Deciding what is relevant is core to the success of any service or proposition delivered via mobile. I’m amazed by the number of services that get it completely wrong.

Why? Because there is more to delivering a mobile location service (let alone location relevant mobile advertising) than knowing the location of the individual. Companies need a detailed knowledge of what is really nearby.

In the U.K. alone, there are over 30,000 recognised places or points of interest. And that’s before you take into account synonyms, postcodes and street names. Linking them together in a meaningful way is no simple task. What are the postcodes or streets in London’s West End or Soho? The taxonomy is complex. When expanding a location to deliver results the relationship between places is important to get right – otherwise the service will deliver meaningless results and fail in the consumers eyes.

With so much as stake, I wonder why companies are so willing to take risks. By adding location to the mix they think they are growing the size of their inventory. In reality they also increase their chances of failure.

Currently, mobile advertising companies work on serving relevant ads based on generic attributes such as country, mobile network, handset type, time of day or theme of the page content. Add location as an attribute and everything changes. Relevancy – potentially down to a micro level – has to be on the mark. Delivering advertising based on locations becomes a mammoth task with a very different set of management challenges.

FREEDOM OF CHOICE

Advertising is content and people will pay with their attention. The structure of the content is important, and keep in mind at all times that mobile is a ‘pull’ medium. Give the people what they want and need. Provide enough information to attract, influence and help inform the decision or action.

You also need to remember that ‘local’ at a micro level is all about offering rich content – which can be challenging to deliver and scale. At the other end of the spectrum, ‘local’ at a macro level is all about providing comprehensive content – which can be challenging to deliver with added-value and competitive differentiation. A rule that applies to both types of ‘local’ content: Content gives a service credibility, interest and value if there is a valid reason (that consumers can understand) why a particular content is shown to them at a specific point in time.

Poorly targeted content is more than a potential annoyance. For many consumers, being exposed to irrelevant content (this includes advertising) on their mobile phones represents a ‘fail’ that interrupts what they are doing and – depending on data plan – costs bandwidth and money. Get it wrong and deliver the wrong content and the consequences can be severe and instant.

Content also needs to be inclusive not exclusive. If a user wants a pizza place nearby, they mean it (!) The service should deliver them details on the restaurant nearby and not the one 15 miles away simply because that business owner paid a premium for it.

Put another way, a location-based social network service should offer people loads of places people can check-in to, and not just the ones a handful of ‘power users’ know, mark and promote. Likewise, a local guide service must have all the places of interest for a town or city, not just the well—known ones in the surrounding area.

Why do local services need to be all-inclusive?

Because the consumer is empowered. They are spoilt by choice and demand the content they want. The Long Tail taught us all that one-size-fits-all doesn’t work in entertainment content. And there is mounting evidence that the same focus on the mainstream will no longer be tolerated in location-based services.

Relevance, as I have shown, is critical in content services.

The consumer’s perception of relevancy is enhanced when:

• They are offered greater choice
• They are empowered to select from a range of options
• They are ultimately responsible for the due diligence and decision

Of course, offering a broad choice of content (in this case, location related information and location relevant advertising) requires the service provider has a stockpile of content to start.

WHAT REALLY COUNTS

Above all, a location-based service has to pass the toughest road test there is. It has to show the consumer what they know is there. Put simply, consumers judge the true accuracy and relevancy of a local service by its ability to offer breadth, choice and insight into the places and businesses they know are nearby.

If the service can pass the test, it earns consumer trust.

Thus, a shopping guide needs to list the shops nearby and not the ones across town. It needs to drill down to the hyperlocal level and present up shops in the area – even better if lists the shop they can see in the distance. Then they can feel secure knowing the service is up-to-date and mirrors the real world around them. (And isn’t that what we all expect of a service that professes to offer local information?)

The same goes for mobile advertising. A guide to city nightlife should be chock-full of bars and clubs and their promotions.

How do service providers get their hands on all this content and advertising?

They partner with companies that have it as their stock in trade.

Take the directory publisher Yell in the U.K. It boasts over 2.3 million business listings –that satisfies the requirement for basic core and structured content. Yell also has over 200,000 searchable online advertisers – that fulfils the demand for depth of differentiating content.

Surely tapping into this content (listings and advertising) is the first – and essential – step to building a strong foundation of content linked to location. What’s more, it’s shortcut to offering the wealth and breadth of content – including familiar content – that consumers have come to demand.

It seems self-evident. But some companies fail to grasp it. In the last weeks I have seen a number of services – TopTable, Grub.it, Center’d to name just a few – come to market with neither basic core and structured content nor in-depth and diffentiating content. Predictably, they were instantly knocked by consumers.

IT TAKES TWO [OR MORE]

As I have shown, the success of a service linked to location depends on the breadth and depth of content (listings and advertising) it offers. It’s content that has long been the lifeblood of directory publishers, but nowhere is it written that these giants will beat the nimble newcomers moving on their turf.

Granted, it will take time for these newcomers to learn the ropes and collect and index the location linked information core to competitive edge. However, there is little reason for more traditional media players, who sit on a stockpile of location linked content, to assume that time is on their side.

Take the case of uLocate Communications, a location services company, headquartered in the U.S.

Sensing a business opportunity it moved fact to fill the gap in the current mobile advertising environment and recently launched Where Ads, a hyperlocal and holistic ad network that pulls together local ad providers that work in other mediums, including directory services, coupons, events and other aggregation services.

Partnerships will be increasingly important. Even for the traditional players it is unlikely that they will excel alone. The recent pairing of directory publisher DexOne and Yelp in the U.S. is a testament that neither company has the critical mass and/or appeal to succeed in isolation.

The new network underlines the importance of getting the right players to the table. Strategic partnering brings a new dimension to the service offer and delivers value to the consumer. But it’s knowing whom to partner with that will decide if a service flies or fails. Picking the right partner requires knowledge and focus. It also helps if the partners we choose have a track record in local and a proven ability to generate revenue.

While the newcomers may have the ambitious mobile strategies, it’s the traditional media owners and directory publishers from the online space that have mastered the capabilities necessary to convert consumer activity (a need/desire to know what’s really nearby) into revenue.

Case in point: Pages Jaunes, the French directory publisher. In 2009 the company counted 885 million visits and online revenues of €461 million. That’s equivalent to €0.52 per visit – a staggering conversion to value. Imagine a scenario where consumers conduct the same number of searches using Google – it’s nowhere near the same conversion rate (or revenues for the advertiser, I might add).

Make no mistake: No other organisation can even potentially come close to the conversion rates and value delivered by traditional media owners and directory publishers. Their ability to create value is inextricably linked to their superior capabilities. They have infrastructure, sales teams and existing customers to target.

In the online space traditional media owners and directory publishers lost their edge to search giants such as Google and Yahoo and have been struggling to catch-up ever since. Mobile is a new game with new possibilities. It’s also a space where location linked content – and lots of it – combined with the capabilities to deliver this content when/where consumers need and appreciate it most can mean the difference between success and failure. These market conditions play in favour of traditional media players and directory publishers. Now it’s up to these companies to recognise their advantage and work with the right people/companies to evolve their businesses, embrace mobile and deliver what users demand.

THE TAKEAWAY

Context, relevance, critical mass and content quality are all key components to a successful and sustainable service in the local mobile space. Who will own this space? Hard to say. But don’t be too quick to write off the traditional media owners and directory publishers that lost the plot in online. They could make a collective and explosive comeback in mobile. Success will be achieved by the companies that see the opportunity, accelerate their efforts, focus on their core strengths and bring the people and partners on board who have mobile expertise.

Get this right and you’re more than fit for the fight ahead. 

Editor’s note: Martin’s next column will focus on how companies should evolve a digital strategy that harnesses mobile to complement existing digital services and thus generate more value. As he shows us: in digital, the outcome can be worth more than the sum of the parts.

Martin Wilson has been involved in digital media for over 14 years, during which time he gained a wealth of experience in the fixed line and mobile Internet. In January 2008, Martin established Indigo 102, an independent consultancy, to assist organisations (including digital advertising agencies, directory publishers, media owners and online service providers) take their brands – and value propositions – mobile. In this role Martin has supported the development and launch of mass market mobile services across three continents. You can contact Martin directly (martin@indigo102.com) and follow on Twitter (@indigo102).

In the space of just a month (March) US directory publisher Dex One (DexKnows.com) announced what I would consider two progressive online partnerships – Is this a sign of things to come to help them develop their fixed online ambitions?

The first gives them Depth – a deal with Yelp, the second Distribution – a deal with CitySearch.   

This is what was released:

YELP

Dex One Corporation, leading provider of marketing services and solutions for local businesses, today announced it has signed an agreement with Yelp (yelp.com), the fastest growing local business review site, to provide consumer feedback on its local search sites.

Dex One will be integrating the new content – ratings and reviews written by the Yelp community – on DexKnows.com(R) (www.dexknows.com) later this month. The Yelp-branded content will appear within individual DexKnows.com local business listings and complement the existing user-generated content already provided by regular DexKnows.com users.

“Merging this robust consumer feedback on one site allows consumers to more easily see how others rank a business before deciding if that business is right for their specific needs,” said Sean Greene, senior vice president of interactive, Dex One. “And for our approximately 500,000 local business clients, adding content from Yelp – the leading local guide in real world word-of-mouth content – helps them better engage with their prospects and customers.”

DexKnows.com includes a feature that allows Dex One clients to access the site’s secure Account Management System (AMS) and directly respond to consumers’ comments – thus encouraging communication between businesses and their customers and fostering stronger, more successful business relationships.

“The Yelp community is made up of passionate locals who write about their experiences with neighborhood businesses,” said Geoff Donaker, chief operating officer, Yelp. “Our relationship with Dex One enables these yelpers to share their experiences with the millions of consumers and local businesses who rely on DexKnows.com.”

CITYSEARCH

Dex One Corporation (NYSE: DEXO), a leading provider of marketing services and solutions for local businesses, today announced a distribution agreement with Citysearch, an operating business of IAC (NASDAQ: IACI).

Dex One advertisers will now have the option to have their listings appear across CityGrid, the largest content and ad network for local, as well as DexKnows.com(R), Dex One’s popular online local search site. As a result, Dex One advertisers will be able to expand their online presence and increase opportunities to drive high-quality consumer leads.

“Partnering with an industry leader like Citysearch underscores our commitment to giving local businesses maximum online reach and multiple ways to capture leads,” said Sean Greene, senior vice president interactive, Dex One. “Enabling our advertisers’ content-rich DexKnows.com listings to appear on Citysearch is part of our ongoing effort to help local businesses get found wherever people are searching online.”

This agreement expands Dex One’s online distribution network of industry-leading partner sites by giving local businesses exposure across CityGrid. CityGrid connects millions of local businesses with 140 million unique users across the Web by distributing high quality local content to publishers.

“Whether it’s driving new customers to our advertisers from major search sites like DexKnows.com or mobile applications, CityGrid is about delivering local businesses the highest quality leads for the best value,” said Jay Herratti, CEO, Citysearch. “For over 15 years, Citysearch has helped small businesses gain exposure on our websites, and now we’re helping small businesses gain exposure across the web.”

News releases.

The frenzy has started as organisations jostle for a position in the mobile application hall of fame – ‘Local’ is shaping up to be one of the most hotly contested areas. What is it really going to take to make a mark and how ‘Local’ can you go?

The Apple strap-line resonates – “There is an App for that” – however creating an application does not mean a business will prevail. Many organisations seem to overlook the value part of the process – how are they going to deliver a sustainable model? Not one that relies heavily on investor generosity.

Who is going to ‘use’ the application and who is going to give you the ‘money’? Sounds obvious until you look to some of the fixed online giants – Facebook, Twitter and YouTube – who have huge usage, amazing associated price tags, but have yet to find a way to get anyone to give them real money. All now seek the revenue model –  a challenge as none want to upset the value chain that has given them their success. Making money would have been a far easier process if it had been defined from the outset.

In terms of ‘Local’ this should be obvious – consumers will use and businesses will give money. (If only life was that simple!)

Need for consumers

Setting distribution and marketing aside businesses need to focus on the offer. To get a consumer to use an application it has to offer something they actually want - utility is essential. Without utility a consumer will simply not come back. Analytics firm Flurry recently reported that on average a consumer uses a single mobile application an impressive 6.7 times a week, but also that over 70% of consumers stop using an application after just 60 days. Retention levels of around 30% are clearly not ideal when looking to build a sustainable business. This is especially true when you consider the application environment is becoming ever more crowded.

In a post recently I discussed how the outcome of the service interaction is so important – the consumer action is usually why they came. Recognising ‘what’ a consumer wants to do? is one of the most important components to deliver against. For Local the ‘what’ – call, book, buy, visit or simply provide information – is so important. A successful outcome will encourage a consumer to come back.

Context of ‘Local’

A critical mass of content is essential. A local service becomes useful when it has mass market appeal. Whether it is linked to a single street, district, town or city is largely irrelevant. A shopping guide needs all the stores, not just one or two, a Social guide all the bars and clubs. A core and consistent level of content is a must. Local information typically means a fixed location, building or business. The best historical players in this space are the Yellow Pages publishers as they have the basic details of all businesses – name, address and telephone number. Their challenge is that there are no attributes linked, reviews and comments, images – simply no life. 

It is possible to create or obtain core content, you just need to factor in cost and consistency. As this will form the basis of the Local offer it is important to get it right – otherwise consumers will simply not come back.

How ‘Local’ can you go?

Mobile and Local, two scenarios spring to mind – ‘where I am now’ or ‘where I am going to be’. A common mistake that many location based services make is to assume your current location is important – often it is not. Mobile is about ‘mobile’, it is about roaming. Understanding location is a key part in any service offering as it helps define what is relevant and what is not. This is far more challenging than many believe.

Local at a micro level means content – very rich content – which can be very challenging to deliver and scale. Local at a macro level – comprehensive content – can be challenging to deliver added value and differentiation. The credibility of a Local service will be judged on an area that a consumer is familiar - if positive trust will be instilled. To deliver a truly compelling and encompassing local service from scratch is likely to be a tall order for any organisation. Partnerships that add value and enhance the offer can and should play a valuable role. Whatever the offer, the service needs to evolve and do so in a timely manner to keep consumer interest and engagement. Strategy should reflect all these elements.

Show me the money

Once Usage has climbed to great heights attempts to deliver commercial value begin. It is unlikely that this will come from Users – they have become very reluctant to pay for anything in the digital environment – so businesses become a focal point. Commercial development needs to support delivering an actual return to a business, ideally with no impact on the application utility or usability.

Seeking money from businesses is a challenge and it is a very crowded market and a difficult one to gain a foothold in as there are very established players. Large businesses deal through agencies, small businesses don’t have the time. There are ways the key is to know how to use them for advantage.