The opening session at LSS'12. Greg gives his 10 top trends and more. Plus we review LSS 2011 and theme for the 2012 summit.

1. Ten Big Trends in Ten Short Minutes
Greg Sterling
Opus Research/Sterling Market Intelligence
November 13, 2012

2. Last Year: LSS ‘11
• Hype-Local: Demand, Awareness Growing
• Mobile Momentum Continues
• Social Media, SMBs & the ‗Now What?‘ Problem
• Local Data Tsunami
• Payments and Real-World Analytics
• From Clicks to Local Transactions

3. This Year: LSS ‘12
• Continued momentum of mobile and ―decline‖ of the PC
• Growth of tablets (and emergence of smaller tablets)
• Rise of multi-screen consumer
• Mobile shopping and ‗showrooming‘
• Mobile payments – not quite there yet
• Bursting of the deals ―bubble‖
• Decline of Facebook?
• Fragmentation of search, growth of apps and ―assistants‖
• Slow merchant response (brands, SMBs) to consumer changes
• SMB confusion amid market complexity
• Novel uses for location data (proxy for audiences)
• Indoor location, ―turn by turn‖ directions
• Coming of the ―Zombie Apocalypse‖

4. Shift from PC  Mobile

5. Smartphone Penetration Passing 50%
Source: IPSOS, Google, ROA Holdings (2011-2012)

6. Global Mobile Penetration
Mobile vs. PC Penetration (Q4 2011)
7,000
6,000 • Total mobile subscribers: between
237-250 million
5,000
• Smartphones: 125 million approx
Millions
4,000 • Current smartphone penetration:
55%, moving to 62% by Q4/Q1 2013
3,000
• Pew: 68% with incomes $75K+ have
smartphones today
2,000
1,000
0
Mobile phones (overall) Smartphones PCs
Source: ITU World Telecommunication/ICT Indicators database, Gartner, Morgan Stanley (2011-2012)

7. Traffic: Mobile vs. PC
Desktop Mobile
100
90
80
70
60 • Globally: Mobile 12.3% of global web traffic
50 • Europe: 6.5% is mobile
40
30
20
10
0
Source: StatCounter, November 2012

8. Mobile vs. PC in India
Desktop Mobile
100
90
80
70
60
50
40
30
20
10
0
Source: StatCounter, October 2012

9. Apple: 100 Million iPads Sold
• 100 million iPads sold since launch 2.5 years ago
• 91% of tablet-generated web traffic comes from the iPad
• 94% of the Fortune 500 is testing or using the iPad

10. Microsoft Attempting to Adapt
Microsoft CEO Steve Ballmer:
sales ―starting modestly."

11. Rise of Multi-Screen User

12. Same Day ‘Sequential Screen Usage’
• 90% use screens sequentially to accomplish a task; majority of that activity
happens the same day
• Different ―start screens‖ for different types of activities
• Nearly impossible to track
Source: Google-IPSOS (August, 2012), n= 1,455.

13. Simultaneous Media Usage
Where you using/looking at any other media at the same time
[when using smartphone]?
82% 9% 9%
Yes No
77% 13% 1% %
0
19
66% 15%
36% 45% 16% 39%
28% 14%
64%
Source: IAB, 5/12 “mobile shopping diaries,” n=260

14. Context, Need, Time Impact Device Use
Source: Google-IPSOS (August, 2012), n= 1,611

15. Smartphones Used Extensively at Home
At home 97% Top 3 locations:
On the go 83%
1. Home
In a store 78%
2. On the go
Restaurant 71% 3. In store
Work 71%
Social gathering 60% IAB ―mobile diaries‖ study:
Dr.'s office 56%
Café 50% 1. At home: 47%
2. Out and about: 29%
Airport 49% 3. At work: 10%
On public trans. 36%
School 30% AdMob survey (3/11): 82% of
tablets used primarily at home
Source: Google-Ipsos Q1, 2012 n=1,000 US smartphone owners

16. Mobile Shopping (not
buying) & ‘Showrooming’

17. Mobile Comparison Shopping
• Multiple studies: 60% to 80% (approx) of consumers use mobile
devices in stores
• Google research: 70% of smartphone owners use them in stores
- What are they doing? Smartphone owners do price
comparisons, check product reviews and locate stores
After consulting their smartphones: 64% of in-store
• 37% decided to not purchase the product at all smartphone
users decided
• 35% purchased the product at that store not to buy on the
spot
• 19% purchased the product online
• 8% purchased the product at another store
Source: Pew Research Center (Q1, 2012), n=1,000 US mobile phone owners, Google, InsightExpress surveys 2011

18. Half of Mobile Lookups Lead to Purchase
Made a Purchase Related to Visit on App/Website by Device
Yes No
16% 15%
51% 52% 48%
57%
84% 85%
49% 48% 52%
43%
Restaurant Travel Automotive Restaurant Travel Automotive
Smartphone Tablet
Source: xAd-Telmetrics “mobile path to purchase” study conducted by Nielsen (Q2 2012), n=1,500 survey respondents and behavior
observed from 6,000 Apple and Android users

19. M-Commerce Penetration (US)
Q: Which of the following do you use your phone for?
Taking pictures/video 25%
75%
Location services/maps 54%
46%
Listening to music 59%
41%
Making purchases 80%
20%
Access social networks 57%
42% No
Accessing internet 44% Yes
56%
Playing Games 65%
35%
Email 48%
52%
Messaging 15%
85%
Voice calls 11%
89%
Source: UC Berkeley School of Law (July 2012), n=1,119

20. Mobile-Influenced Purchases: Offline, PC
• 65% of smartphone owners would prefer to use a
PC/laptop for transactions
• 37% researched but later purchased online
• 32% researched and later purchased offline
Source: Google-Ipsos Q1 2012, n=1,000

21. Mobile Payments

22. Mobile Payments Are Sort of Here
• Lots of anticipation for mobile
commerce and mobile payments
• Mainstream adoption not there
• PayPal has a plastic card
• Google about to introduce one
• Getting from here to there: time
frame, device replacement, POS
upgrades?

23. Interest M-Payments (US)
Q: Would you like to use your mobile phone for any of the following purposes?
Compare prices when shopping 48%
Receive offers/promotions based on location 33%
Track finances daily 31%
receive and manage coupons 31%
Buy things at in-store POS 25%
As a membership card 24%
As a photo ID 23%
Purcahse tickets to events 23%
Organize and track gift/loyalty cards and programs 21%
As ticket for bus 19%
As house key 18%
Refused to answer 18%
Source: US Federal Reserve (3/12) n=2,002 US adults

24. Main Reasons for Not Using M-Payments
Q: What are the main reasons why you have not used mobile payments?
Concerned about security 42%
See no benefit from using mobile payments 37%
Easier to pay with cash or credit card 36%
My phone doesn't have necessary feature(s) 31%
Don't trust the technology to process payments 20%
Cost of mobile data too high 15%
Other 12%
Consumers express lack
Difficult/time consuming to set up 9% of trust, fear and confusion
about mobile payments.
Unaware of stores that accept mobile payments 9%
They also don‘t yet see the
Not offered by bank/credit union 4% benefits.
Refused to state 2%
Source: US Federal Reserve (3/12) n=1,780 US adults

25. Decline of Facebook?

26. Facebook: 1 Billion Users . . . But
• Facebook announced 1 billion users globally
(October)
• 600MM mobile users
• 17 billion location-tagged posts, including check-ins
• Median age of the user is about 22
• However engagement declining?
- September 2012: 6 hrs 40 minutes (US)
- March 2012: 7 hrs 9 minutes
• Rise of alternatives
Source: Facebook internal data, Nielsen (November 2012)

27. Local Businesses Souring on Facebook?
• 12.8 million local businesses have Facebook pages
• 8 million of them monthly updates
• 3.5 million update weekly
Does your business have a
presence on Facebook?
• Yes, and I find it valuable —
42%
• Yes, but I don‘t find it valuable
— 30%
• I used to, but didn‘t feel it was
worth it — 5%
• No — 23%
58% had negative view
Source: Facebook internal data (Q3 2012); Reply.com, September 2012 (n=3,270 US SMBs under 99 employees); Manta September 2012, n=614 US
SMBs

28. Evolution of Search, Rise of
‘Assistants’ in Mobile

29. Mobile Search Is Almost All Google
66% of mobile users find mobile sites through
search engines
US Market Global
• Google: 93.8% • Google: 97.1%
• Yahoo: 3.89% • Yahoo: 1.88%
• Bing: 1.48% • Bing: 0.65%
• Others: 0.83% • Others: 0.37%
• Android now leading smartphone OS globally
• In US Android has 52% of US smartphone market (comScore)
Source: Google-sponsored study with 1,088 US adults (25-54); survey/interviews conducted Q3 2012; StatCounter, September 2012
.

30. Mobile App Use for Local Search
Half of mobile users conduct local searches with apps (volume unclear)
Use of apps for local
Most popular local search apps
search on (among the 49%)
smartphones and
tablets
Google Maps 64%
Yahoo 52%
49% Mapquest 39%
Bing 38%
YellowBook 38%
YPMobile 36%
Yelp 31%
SuperPages.com 28%
Citysearch 24%
Urban Spoon 23%
2011
Other 3%
Source: comScore-Localeze-15Miles Local Search Study, Q1 2012, n=4,000

31. Time Spent in Mobile: Apps Dominate
Apps Mobile web
90%
81%
80%
72%
70%
60%
50%
40%
30%
28%
19%
20%
10%
0%
May 2011 May 2012
ComScore: ―4 in every 5 mobile media minutes‖ is spent with apps (vs. browser)
Source: Nielsen (May 2012)

32. Assistant Metaphor Taking Hold

33. Merchants Slow to Respond

34. Screen Time: 90% of Media Interactions
90% of media Interactions are through one of four screens
10% of media time with traditional channels
Source: Google-IPSOS (August, 2012), n= 1,611

35. Time Spent with Mobile vs. Ad Spend
US mobile ad revs (IAB 2011) approx $1.7B
64 66 74 81 MINUTES
MINUTES MINUTES
MINUTES
43 MINUTES
MINUTES
Sources: Mary Meeker, KPCB “Internet Trends” presentation May 2012, Flurry Analytics

36. Most Marketers Still Not Mobile-Ready
• Mobile-friendly sites produce 75% higher rate of engagement
(revenue, page views, etc.) per visit for mobile users*
• 55% of consumer survey respondents said a frustrating
mobile experience hurts opinion of the brand*
• Roughly 80% - 90% of Fortune 500 don‘t have mobile-
optimized site**
• 79% of large online retailers don‘t either***
I‘m
disappointed
in you
*Google: Jason Spero (ThinkMobile event 2011), Google, Sterling Research 9/12 (US
consumer survey; n=1,088)
**iMomentus, August 2012
***Magento (Q2 2012)

37. Is This a Good Ad?

38. What about This?

39. New Uses for Location Data

40. Location As ‘Context,’ Proxy for Audience
Skyhook Wireless, Factual, PlaceIQ, Placed, JiWire and others using
location profiling to enable brands and marketers to target audiences

41. Mapping the Great Indoors

42. Indoor Location, Turn-by-Turn
Range of
companies:
• Google
• Bing
• Nokia
• Micello
• Meridian
• Point Inside
• Aisle411
• Wifarer
• Others

43. To FollowContact Me Me
Follow or or Contact
Greg Sterling
greg.sterling@gmail.com
Twitter.com/gsterling