Henry Blodget of BusinessInsider gave an excellent presentation titled The Future of Digital at a recent Ignition conference.
As you can see from the trendlines in the graphs below, the promise of smartphones is rapidly coming to fruition, with over 50% penetration in the US, and an especially-significant stat that by 2015 the number of broadband connections coming from mobile devices will be over 300% the number coming from fixed (i.e., desktop computer) devices. Translated, that means the promise of blazing-fast broadband on your phone is already here with 4G LTE on many new smartphones, and it’s about to become ubiquitious. And that means that people will just reach for their phone instead of walking over to a desktop computer whenever they want to do anything online. I wrote about this phenomenon in a personal blog post about how the iPhone 5′s connectivity has been growing exponentially since its introduction.
Another significant stat shown below is that the time smartphone users spend in apps is 600% greater than mobile web. As TechCrunch reported last October, mobile app downloads are skyrocketing from 2 billion in 2010 to 98 billion 2015 — an increase of almost 50x. And as Localytics reports, 26% of users only open an app once after downloading. Already, engagement is a problem in mobile, and as the number of downloads skyrockets fifty fold, the problem is going to get much worse. Just think about your own phone: How many apps are on it that you downloaded, but never use.
Fred Wilson coined the term “30/10/10” to refer to 30% of the download base being MAUs (Monthly Active Users) and 10% of the download base being daily actives. I believe the engagement stats for many apps are often even worse than that. Oftentimes, as the Localytics data illustrates, 25% to 50% of users don’t even open the app once after downloading it. In a presentation from PinchMedia (now several years old), the active user rate 90 days after install was well under 5% of the download base.
We believe the engagement problem comes down to a simple aspect of human nature: We are social creatures. And there are communities hidden inside of every app — not ‘friends,’ but a group of strangers who all share just one common interest: The content of the app. This means there’s an ‘interest graph’ hiding inside of every app. It’s ridiculous that you don’t know who any of the other users of an app are. You’ll never want to be ‘friends’ with them all, but around topics you both care about, you definitely might have something to say. An example is Amazon comments: I may not be your ‘friend,’ but if you make a comment about a product I care about, you may very well influence my buying behavior on Amazon. Socialize takes that simple truth and applies it to all the content inside of an app, unleashing the communities of users inside the app, and ‘turning the lights on’ so they can all socialize with each other regardless of friend status. To learn more about that, click here.
Here are some of the highlights of the BusinessInsider presentation:
A huge rise in smartphone and now tablet sales starting in 2009:
With the vast majority of broadband consumer connections coming from mobile devices by 2015:
With smartphone and tablet e-commerce growing fast:
And fast-growing digital advertising, but still with much lower CPMs than desktop:
With mobile-specific advertising expected to continue to grow:
Time spent in apps is vastly outpacing time spent in mobile web:
And while Android is gobbling up market share:
Most of the actual commerce & traffic is coming from iOS: