Android Users: Natural Born Clickers?

I'm an Android EVO user and I rarely click on ads, but that's apparently not true of my Android brethren and sistren. According to ad network Chitika, "people on the Android OS clicked on ads 81% more often than people on the iPhone." Chitika quickly comes to the conclusion that 'Android users [are] 80% more valuable than iPhone users." However I wouldn't equally jump to that immediate conclusion. 

Ad mediator/exchange Smaato previously found, similarly, (in February) that Android users clicked-through more than iPhone users: 

But later Smaato reports, as Android penetration grew, saw its CTR position decline. Compare July numbers for the US and then globally:

There may be some novelty around mobile advertising for many Android users, especially if they've upgraded from feature phones and this is their first smartphone. However, the Smaato figures suggest that the Chitika numbers will similarly change in a few months after the newbie Androids become jaded and embittered.

Once again, however, this all begs the question of whether we should be paying any attention to CTRs on mobile ads (other than paid search). If there's a lead-gen form on a landing page or a store locator, then arguably yes. But otherwise CTR is probably the wrong metric.

It's an easy, lowest-common denominator metric so people gravitate to it. But comScore has repeatedly argued and shown that CTR is the wrong metric to assess the efficacy of onlne display advertising. That should equally apply to mobile. 

There are a range of metrics that mobile marketers can and should be using to assess the success of their campaigns, depending on their objectives. The generic CTR is not necessarily very helpful or meaningful in terms of brand lift, purchase intent or other actions that mean something in the real world. 

The Demographics of Talk & Text

Nielsen offers data culled from a year of looking at US mobile subscriber phone bills and other sources. It shows the places and populations who talk and text the most by state and ethnic group.

There are geographic differences in terms of voice minutes and texts per month. And it's a bit of a non-surprise that teens text way more (emphasis on the word "way") than anyone else -- more than twice as many texts per month than those in the 18-24 age bracket. 

Residents of the south talk more than others, while the states with the greatest volume of texts are distributed: 

The chart above confirms (again) that the most effective way to market to teens may be SMS-based.

Millennial: Android Passes RIM, iPhone Still on Top

Millennial's July data were released earlier this morning. They reflect what's been broadly reported elsewhere: continued growth of Android (and the iPad). Here are the headlines:

• Android grew 47% month-over-month. Since January Android has grown 690%.
• Android also officially became the number two OS on the Millennial network (surpassing RIM)
• Apple ad requests increased 24% month-over-month, but are actually down 15% since January; iPad ad requests grew 327% month-over-month.
• Smartphones and connected devices increased their impression share 7%, and now represent 68% of the total impression share.

Basically, the story is that Android is now a rapidly gaining number two to the iPhone's number one on the Millennial network.

RIM has grown both in terms of representation on the network and in terms of developer involvement, but the news that Android has passed it is more confirmation that the company is in an increasingly challenging competitive position.

And now for the graphics: 

Survey: 25% Do In-Store Price Comparisons on Phone

A survey of 3,600 US mobile consumers by Sterling Commerce found that 15% of mobile users have made purchases on their phones.This number is broadly consistent with other studies and surveys (see links below) for the US market.

In this survey population slightly less than 50% of respondents reportedly owned smartphones, whereas the number is 23% to 25% in the overall US mobile population. So the results can't be directly extrapolated to the population of mobile users. 

More findings (nearly verbatim):

• 60%+ [of respondents] believe being able to verify product availability (on mobile device) at a particular store location is important to very important.
• Nearly 25% use their phone while in a store to competitively price shop an item.
• 20% of consumers currently use their phones to create shopping lists or baskets . . .
• Two thirds are interested in using their mobile phone to scan and purchase items, thus enabling them to bypass checkout lines.
• 25% of [respondents] believe that receiving specials/promotions (such as coupons) would be an important use for their mobile phone when shopping, although they were less enthusiastic about receiving advertising via their phones.
• The survey also highlighted mobile shopping frustrations (small screen, keypad, slow speeds) and m-commerce concerns around security (for 28% of respondents).

A striking datapoint above is that 60% want store inventory information; while "only" 25% want offers or coupons while shopping. An equal percentage said they performed in-store price comparisons. As barcode scanning becomes more commonplace and easier to use, this latter figure will go way up. 

Separately, Insight Express recently found that 82% of survey respondents used their mobile phones while shopping in stores.  

Related posts:

• Amazon, eBay Mobile Success Defies 'M-Commerce' Trend
• Survey: Growing Minority Warming to 'M-Commerce'
• Survey: Europeans Not Doing 'mCommerce'
• MMA: 21% Now Using 'M-Commerce'
• Report: People Using Smartphones for Shopping, Not Buying
• Harris Poll: 46% Willing to Make Purchases with Mobile Phones

iPad Metrics: Users & Ad Performance

These numbers were previously released but I thought it would be interesting to present them together. Below are Nielsen data regarding iPad ownership demographics and Mobclix data about engagement ad ad performance on the iPad.

iPad users appear comparable in age ranges, though perhaps slightly younger, than the iPhone population. They're more affluent than iPhone users however. Nielsen says the "sweet spot" for the iPad is "affluent 25 to 36 year olds."

Interestingly, 51% of iPad users responding to the Nielsen survey did not own an iPhone. I fall into that category as well. 

According to Mobclix, rich media/video ads on the iPad have a 10.7X higher CTR than "standard" display on the iPad. In addition, iPad apps generate a 5X eCPM vs. the iPhone.   

It's clear that the iPad audience is desirable for brand marketers and that users are much more engaged with media and ads on the iPad than on smartphones or the iPhone. 

Report: Deeper Mobile Internet Penetration in China

Nielsen offers some very interesting data on China's mobile market, based on almost 5,000 face-to-face consumer interviews, and compares it to mobile behavior in the US. The finding: a higher percentage of Chinese subscribers use the mobile Internet than their US counterparts. 

Just over 37% of China's 755 million mobile phone subscribers in China access the Internet on their handsets. That represents roughly 279 million people overall. In the US there are 77 million mobile Internet users, representing about 27% of subscribers, according to the most recent Nielsen estimates.

The size of the Chinese market is currently about three times larger than the US market. However there's much more growth potential in China vs. the US, which is already a mature market in terms of subscriber penetration. By contrast just over half of China's population has a mobile phone. And China is one of those developing markets where primary Internet access is very quickly likely to be via mobile vs. a PC. 

The mobile market in China is almost equally split between men and women and different age groups. Almost 90% (87%) are pre-paid subscribers. Below is the breakdown of mobile activities by category and then a comparison with US mobile user behavior. 

New Report Confirms Android Sales Momentum

Confirming earlier data, the NPD Group said today that Android is outselling the iPhone:

For the first time since the fourth quarter (Q4) of 2007, RIM fell to second position, as Android took the lead among operating systems in handsets sold to U.S. consumers. NPD’s latest wireless market research reveals that Android accounted for 33 percent of all smartphones purchased in Q2, ahead of RIM (28 percent) and Apple (22 percent).

Based on U.S. consumer purchases of mobile phones in Q2, the top 5 Android smartphones were as follows:

1. Motorola Droid
2. HTC Droid Incredible
3. HTC EVO 4G
4. HTC Hero
5. HTC Droid Eris

Earlier Nielsen reported that in the first half of this year Android handsets had outsold Apple's iPhone. However, in the market as a whole the iPhone still has 2X share of the US smartphone market vs. Android devices.

That share probably goes up if all iOS devices (iPod Touch, iPad) are factored in. 

If Android maintains sales momentum like this it will eventually (2011) capture market share and move into second position after RIM, which just introduced a new OS (6) and device (Torch) to blunt the rise of Android and the iPhone. It's not clear, however, it will succeed. 

See also: Will New, More Complicated Dataplans Cost Smartphones the Market Majority?

Correction: iPhone Has 2X Android's Share in US

Based on a third party report of unreleased Nielsen mobile marketshare data this morning, I incorrectly described what the data reported. So did almost everybody else.

The original GigaOM discussion of the Nielsen data is technically correct -- it refers to sales rather than overall market share -- but it failed to provide context and all the relevant data. I was also swept up in what seemed like a dramatic 10 point gain in Android's market share. 

The headline asserted that Android had surpassed the iPhone in the US. But that's not what the data actually show it turns out. The accurate statement is that in the last six months Nielsen says that Android handsets have taken a greater share of all smartphones sold in the US than the iPhone. However the iPhone still has considerably more share in the US market than Android.

Nielsen later in the day posted with more context. The first chart below is reflective of the overall market: Android has 13%, while the iPhone has 28% share -- more than double. 

The chart below is the one that made its appearance this morning and caused the problem. It focuses not on the entire market but only on "recent acquirers." The chart is somewhat misleading because in the absence of the one above it appears to be a snapshot of the overall distribution of handset marketshare (notwithstanding the slide title). 

I hadn't seen the first chart until this evening.

What we take away from this is what we already know: Apple has saturated its single carrier market (AT&T), while Android, with multiple handsets and carriers, is gaining momentum. Again, the iPhone's market share is more than double Android's but more recently Android handsets appear to be outselling the iPhone. 

The most important datapoint released by Nielsen however is that smartphones now represent 25% of the total US handset market. That's a psychologically significant milestone. The next one is 50%, which Nielsen projects will happen in Q2 next year. I'm skeptical it will be quite that soon but we're definitely on our way. 

Report: Android on a Tear, Passes iPhone in US

With multiple handset OEMs and multiple carriers the "Android army" of devices has reportedly overtaken the iPhone in terms of market share in the US smartphone market according to Nielsen (via GigaOm). The data show the following Q2 (survey based) US smartphone market share distribution:

• RIM: 33%
• Android: 27%
• iPhone: 23% 
• Windows Mobile: 11%
• Combined others: 6% 

The Nielsen data reflect that Android's share in Q1 was 17%, which would mean an amazing 10 point leap in a single quarter.

We may see some sort of Apple push-back on or attempted spin of this data. For context and comparison purposes, here are Gartner global smartphone data share figures for Q1, 2010:

The Nielsen data, however, continue to show greater loyalty among iPhone owners vs. Android and other handset types: 

Android has clearly emerged as a viable alternative to the iPhone in the US, which remains locked up with AT&T so to speak -- a strategic blunder by Apple that has now apparently cost the company some of its credibility and potentially its mindshare in the smartphone segment. While Android continues to be not as "elegant" or polished as the iPhone (it isn't), it's much more widely available and for a large number of people a perfectly acceptable alternative.

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Related: Android smart phone shipments grow 886% year-on-year in Q2 2010

Millennial Media: 81% Audience Reach, Plans IPO Next Year

Millennial Media released its June SMART report this morning. As usual it's "chock-a-block" full of data. I'll point to a few of the things that interest me. You can get the entire report here.

All data are based on Millennial's network and not necessarily representative of the broader mobile Internet. 

The company cites Nielsen data for the proposition that the mobile Internet in the US is now 77 million people. The company asserts that it can reach to 81% of that audience.

Here are Millennial's top DMAs (by ad requests): 

1. LOS ANGELES, CA
2. DALLAS, TX
3. HOUSTON, TX
4. PHOENIX, AZ
5. SACRAMENTO, CA
6. SAN FRANCISCO, CA
7. CHICAGO, IL
8. FRESNO, CA
9. SAN ANTONIO, TX
10. HARLINGEN, TX
11. NEW YORK, NY
12. TAMPA, FL
13. ATLANTA, GA
14. LAS VEGAS, NV
15. ALBUQUERQUE, NM

The fact that "HARLINGEN, TX" is ahead of "NEW YORK, NY" is suggestive of the idea that the company's network is not synonymous with the mobile Internet per se.

This month's SMART report focuses on the entertainment vertical (one of Millennial's top 3) and its campaign tactics. I'm not going to drill into those numbers. Rather I'll show Millennial's list of the top verticals:

Millennial shows that almost 60% of its campaigns are national, with "broad reach." However of the 41% that are targeted; the top two strategies are geo and demo targeting. When the audiences get large enough these layers will be married for geo + demo + other. But geo can also be a proxy for demographic targeting in the right circumstances. 

Report: Local Search on Mobile Growing in 'Double Digits'

Data released today by comScore and the Yellow Pages Association show that local search on mobile devices is growing significantly. The data focus on use of directories and IYPs on mobile (and online). Here are the top-line mobile figures:

• Mobile subscribers accessing business directories on a mobile phone increased 14% year-over-year to 17.3 million users in March 2010
• People accessing directories on a mobile device at least once per week increased more than 16% YoY growth to nearly five million in March 2010.
• Mobile browser was the most common access method for users, with 10.8 million subscribers in March 2010 and 21% YoY growth.
• Apps grew at a more rapid pace with 42% YoY growth (4.1 million subscribers)

 Mobile IYP users are more affluent and better educated than the general population: 

• 58 percent are 34 or younger.
• Over half have a household income in excess of $75,000.

 Study methodology:

ComScore utilized "both 1) a unique survey sample of over 10,000 U.S. respondents each month, resulting in a sample in excess of 35,000 when running 3-month average reports and 2) a meter-based smartphone mobile browser measurement tool based on a representative panel of approximately 2,500 devices."

ComScore has always been conservative regarding how it defines a "local search." These data too likely undercount activity online and on mobile devices directed toward offline purchases and other local commercial behavior.

The slide above also reflects activity on IYP and directory sites exclusively and doesn't look at search engines or locally focused apps in the aggregate. 

Related: Report: Local & Social Huge on Smartphones

Opera: State of Mobile Web, June 2010

The latest Opera report is out. The focus of the report this month is on Africa and the World Cup. Opera said it had 59.4 million users of the Opera Mini globally. I'm now using it on my Android Evo at least as much as the native browser (which often tries to send me to the carrier portal annoyingly).

Below are the top sites and handsets for China, the UK and US. The iPhone is now the top handset in both the UK and US, while Nokia continues to dominate in the aggregate.

Compare the data from roughly a year ago, July, 2009. While there is some shuffling among the top sites (e.g, MySpace has gone from #3 to #10 in the US) the data reflect mostly the same top 10 in these countries over the past year. 

Updated US Wireless Carrier Numbers

This week AT&T and Verizon reported Q2 revenues. Verizon Wireless had 1.4 million net wireless customer additions, while AT&T reported 1.6 million net customer gains for the most recent quarter.

Here are the "big four" in the US:

• Verizon: 92.1 million total subscribers
• AT&T: 90.1 million 
• Sprint: 48.1 million (reports Q2 July 28)
  
• T-Mobile: 33.7 million

Total: 264 million (not counting smaller carriers). CTIA says there are 285.6 million total US mobile subsribers.  

The gap between the two leaders and the smaller carriers certainly argues in favor of some sort of combination, which has previously been rumored and even supported in principle by Sprint CEO Dan Hesse.

Amazon, eBay Mobile Success Defies 'M-Commerce' Trend

The current state of mobile commerce -- purchases made on mobile devices -- is not dire but most users aren't buying things over their handsets. There are a number of semi-contradictory surveys and studies in the market about the health of m-commerce: 

• Survey: Growing Minority Warming to 'M-Commerce'
• Survey: Europeans Not Doing 'mCommerce'
• MMA: 21% Now Using 'M-Commerce'
• Report: People Using Smartphones for Shopping, Not Buying
• Harris Poll: 46% Willing to Make Purchases with Mobile Phones

In contrast to buying there is a great deal of "shopping" and price comparison lookups going on in stores on mobile devices. However there are two companies in particular that already have very healthy m-commerce businesses. The first, eBay, said that it was on track for $1.5 billion in sales from mobile devices in 2010. Amazon is the other.

Yesterday Amazon reported second-quarter earnings that included more than $1 billion in global sales from mobile devices:

In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device," said Jeff Bezos, founder and CEO of Amazon.com.

Are these two companies simply leading indicators of where the market is going or are they exceptions, suggesting that it may be a long time before others achieve comparable mobile success. My view is somewhere in-between.

These are two strong and, in Amazon's case in particular, trusted brands. In addition Amazon (like iTunes) has stored credit card information, removing fricition from the m-commerce process. The credit card and the challenge of entering 16 digits on the small screen is by itself enough to kill 99% of mobile transactions.

Over time consumers will feel more comfortable buying a wide range of things on their handsets, but it will take time for retailers, etailers and others to assimilate best practices and properly address the needs and use case of consumers on the go.

Takeaways from the IAB Mobile Conference

The following are some "takeaways" by Citi analyst Mark Mahaney from the recent IAB Mobile Marketing Conference in New York (we didn't attend): 

• JumpTap reported 3X user engagement in Rich Media Ads on mobile smartphones vs. PC display. Also: 2X the views of mobile movie trailers for studio clients vs. on PCs.
• PointRoll also noted iPad Ad (display) interaction at 1.10% vs. Mobile at 0.5%, and desktop at 0.26%.
• Jumptap: 42% of its customers advertise on RIM, followed by 24% on iPhone, 15% on WinMo, 13% on Android. By contrast 55% of JumpTap’s mobile traffic comes from non-smartphones.
• Quantcast: the iPhone had 65% mobile Web traffic share and Android had 12% less than a year ago. In May the iPhone had 59% share, while Android had 20% share.
• Mobile Search ads: Advertisers Citi spoke with said search on mobile works well for branded terms, but not for generic terms. Also CPMs continue to be prohibitively high due to the current 2 ads at the top of Google, which result in aggressive bidding of keywords to get ads one of those two spots.

These data reflect a nice snapshot of the market today. There's higher engagement with mobile ads but the medium is more complex and challenging in some respects, as the search data suggest. Android is an increasingly viable #2 platform to the currently dominant iPhone.

Feature phones (and SMS) should also not be neglected. While smartphones in the US constitute about 23% of the market, that means non-smartphones are 77%. While the numbers will become more balanced over time there are still lots of people on feature phones in the US and around the globe. 

Apple Continues Momentum with Giant Revenues

Apple posted impressive quarterly results and "record revenue" for its third fiscal quarter. The company announced revenue of $15.7 billion and net profit of $3.25 billion. This compares to revenue of $9.73 billion a year ago. 

Hardware sales were as follows:

• 3.47 million Macs, "representing a new quarterly record and a 33 percent unit increase over the year-ago quarter."
• 8.4 million iPhones, "representing 61 percent unit growth over the year-ago quarter."
• 9.41 million iPods during the quarter, "representing an eight percent unit decline from the year-ago quarter."
• 3.27 million iPads, but we knew that. 

Apple slightly beats consensus estimates on unit sales it appears and, revenue-wise, strongly exceeded expectations.

Read more on Techmeme. 

Survey: Europeans Not Doing 'mCommerce'

Research firm Forrester conducted a survey of European mobile users and found -- few surprises here -- that most respondents are not transacting on mobile devices. Here are the high-level datapoints:

• A mere 2% of respondents reported purchasing products from their mobile phone and only 5% are actually interested in doing so.
• Only 16% of online buyers have used their mobile phone for a shopping-related activity such as researching products, checking on the status of an order, or locating a nearby store to buy a specific product. 
• Italian, Swedish, and UK online buyers have warmed up the most to mobile commerce.

The firm says, however, its earlier survey data show more engagment with these activities among smartphone users:

28% of European iPhone owners research products for purchase, while 13% of them report purchasing products via mobile at least monthly

Compare this to earlier Insight Express (US) data, which show much higher levels of smartphone activity in stores:

Source: Insight Express, June 2010 (n=1300 US mobile phone users)

In addition, recent Compete data show heavy smartphone usage to find local stores/businesses:

• Nearly one in three smartphone owners has called or stopped into a local business after finding it using a local search application.
• In Q1 alone, close to a third of Android and iPhone owners discovered at least two new businesses that they were not previously aware of as a result of using local search applications.

We discussed in the past that a major obstacle to so-called "mCommerce" is the need to enter 16 digit credit card numbers on a tiny screen. Even a smartphone screen is very awkward. Stored credit card numbers with trusted online etailers (e.g., Amazon) or payment platforms will fuel mobile-online purchases by removing the credit-card-entry fricition. 

Mobile "commerce" should not be confused with mobile "shopping" or use of phone for shopping purposes. Smartphone owners, as the IE data above suggest, are using their handsets extensively in stores and in the shopping process on the go.

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Two earlier US-based surveys show more interest in mCommerce among mobile users than the Forrester survey data:

• Survey: Growing Minority Warming to 'M-Commerce'
• Harris Poll: 46% Willing to Make Purchases with Mobile Phones

Survey: Apple, HTC Demand High, RIM Loses 'Cool'

ChangeWave released a new survey of 4,028 US smartphone owners that looked at future intent to purchase and customer satisfaction. The survey included polling about iPhone 4 and Droid Incredible. It showed Apple and HTC to be among the winners and RIM, Palm and others to be among those suffering by comparison in the survey.

The firm noted that overall smartphone demand is growing:

[C]onsumer interest in smart phones [is now at] unprecedented levels – with consumer planned buying now at an all-time high for a ChangeWave survey.

As mentioned, Apple and HTC gained in the survey while demand for RIM and Motorola waned. (That may change with today's release of the Motorola Droid X.) RIM also suffered Customer Satisfaction. According to the survey findings:

RIM . . . has fallen to sixth place in terms of customer satisfaction (30%) – their seventh consecutive quarterly decline."

Notwithstanding the snafu over iPhone 4 antenna problems ("death grip") -- this survey was conducted before the controversy erupted -- satsifaction levels are much higher for Apple than its smartphone rivals. 

Here's a final and interesting observation about BlackBerry devices from ChangeWave:

In recent quarters RIM models appear to have lost their 'cool factor,' and the onus is now squarely on RIM to regain consumers' confidence in their products.

We haven't done any polling but if in fact that interpretation is accurate and RIM has "lost its cool" that could be quite damaging for future sales. Younger users were buying RIM devices in surprising numbers, partly because they've been aggressively discounted but also for their texting capabilities. 

Fashion and image have been among the strongest selling features of the iPhone and certainly the Droid devices at Verizon in the US. 

In addition, as demand for apps and the Internet on mobile devices grows, RIM is in a weaker position with its current smaller selection of apps and generally weak mobile Internet experience. However the company has vowed to change that with a better browser and renewed emphasis on its app store.