Industry leader, Greg Sterling presents on the State of SoLoMo (Social, Local, Mobile) internet marketing at SIMposium 2012.

1. t
The State of „SoLoMo‟:
Where Are We Today, Where Are
Going?
Greg Sterling
June 14, 2012
1

2. Greg Sterling, Internet/Mobile Analyst
• Former lawyer, editor, startups, analyst, blogger
• Search, social media, mobile, local, multi-channel
shopping, SMB advertising/marketing
• “The Impact of the Internet on Offline Buying”
• Twitter: @gsterling

3. Daunting Task

4. The SoLoMo „Mandala‟
A Mandala is a kind of
Social Local symbolic representation of
.
the universe used to help
“access progressively
deeper levels of the
unconscious, ultimately
assisting the meditator to
experience a mystical
sense of oneness with the
ultimate unity from which
the cosmos in all its
Mobile manifold forms arises.”*
*Author David Fontana, “Meditating with Mandalas”

5. Coherent or Just a Catchphrase?
Social + + Mobile . . .
The convergence of three major “online” trends:
• Social: word of mouth, user-generated content
• Local: online research  offline buying
• Mobile: the internet “in context” (time/space)
Is it “necessary,” inevitable or “organic”?

6. Brought to You by „Post PC‟ Devices
"This transformation is going to make some people
uneasy...because the PC has taken us a long ways. It's
brilliant. We like to talk about the post-PC era, but when it
really starts to happen, it's uncomfortable." -- SJ June, 2010

7. Is SoLoMo „Web 3.0‟?
• Just hype or real shift in the direction of the market?
• Deskltop or laptop PC is just one of multiple Internet
devices (joined to varying degrees by “the cloud”)
• Internet: from “always on” to “always available”
• We use mobile devices to communicate and document our
experiences in the world
• Mobile devices help us literally navigate the real world

8. It‟s App-tastic and App-centric
comScore (5/12): “4 in every 5 mobile media minutes”
is spent with apps (vs. mobile browser)

9. Apps Surpass PC Time Spent?
Time Spent - Minutes per Day
94
Nielsen says
smartphone
72 owners have 41
apps, spend
roughly 39
minutes a day
using apps
PC-based Internet Mobile apps
Source: Flurry Analytics, comScore, Alexa (2012)

10. Increasing Audience Fragmentation
Many marketers finding challenges in
addressing all these channels coherently . . .
then tracking, doing attribution

11. Multiple Media in an X-Platform World

12. Other Media Stimulate Mobile Search
2010 2012
1. Response to traditional Performed a mobile search after
media/ads (68%) seeing an ad (66%);
2. Word of mouth (61%) Ad medium:
3. Saw something in a store 1. TV (58%)
(44%)
2. In-store (57%)
4. Responding to mobile ad
(27%) 3. Magazines (48%)
5. Responding to online ad 4. Outdoor ad (36%)
(18%)
Source: Google-Ipsos Q4 2010, n=5,000 Source: Google-Ipsos Q1 2012, n=1,000

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

14. Generation ADD?
Are we creating a generation of anti-social, narcissists
with ADD?

15. PC Ascent Has Stopped
90%
80% 79% 78%
73% 75%
70%
63%
60%
50% 50%
40%
30%
20%
10%
0%
Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
Source: Pew Internet & American Life Project, 2012

16. Smartphone Penetration
Likely: 75% to 85% of mobile subscriber population in 3 years
53.0%
49.7%
44.0%
Pew Nielsen comScore
Source: Surveys conducted in 2012 by each of the sources identified

17. Mobile Internet Grows with Devices
Millions of users (US) Total US PC
109+ Internet Audience
220M (comScore)
85
Smartphone owners who Smartphone owners who
access the Internet access the Internet daily
Source: Opus Research, Pew, wireless carrier data (2012)

18. Sizable Segment Prefers Mobile to PC
25% 17.6%
Pew 4/11 n=2,277 Opus 3/12 n=1,502
• Over 100 million on mobile internet
• More than 20 million people prefer smartphones
and tablets to PCs for internet access
Source: Opus Research (2012), Pew American Life & Internet Project (2011)

19. Tablets Cannibalizing PC Usage
Since you started using a tablet, has your
desktop/laptop usage decreased?
77%
28% of respondents said that the tablet is
their primary computer
23%
Yes No
Source: Google-AdMob, March 2011

20. Developing World: Mobile Passing PC
India: Mobile vs. PC Internet Traffic
Desktop Mobile
80
70
Percent of traffic
60
50
40
30
20
10
0
Source: StatCounter (June, 2012)

21. Apple Gets into Local in a Big Way
• How good is it and how widely used will it be?
• What will Google’s response be?
• Will there be any paid advertising?
• Will there be potential Siri or Apple Maps optimization?

22. Local

23. US Ad Spend by Major Segments (2011)
$ Billions
Broadcast TV 38.5
Internet 31.7
Cablet TV 30.0
Newspapers 20.7
Total $174 billion*
Magazines 18.0
Radio 15.2 The only traditional
Yellow Pages 10.0 medium to see a
Out of home 6.5 positive CAGR since
2005 has been
Mobile 1.7
cable TV
Video game ads 1.0
In theater 0.7
Local range: $95 to $130 billion
Source: IAB-PwC (2012), Opus Research, Kantar Media
*Total US ad revenues exceed $230 billion

24. Top 10 Advertising Categories (2011)
About $60 billion
of this is local ad
spending
Sources: Kantar Media (2012); categories are not all-inclusive

25. 95% of Retail in Stores
$4T in annual US
retail spending
E-commerce is 4.9%
of total US retail
Source: US Census Bureau Q1 2012

26. Online Research  Offline Buying
90% (or more) of online consumers conduct online
research before buying offline
Source: Opus Research, Yahoo, e-Taling Group (2010-2011)

27. Local Never Got Any Digital Respect
I told my wife the truth. I told her I was
seeing a psychiatrist. Then she told me
the truth . . . that she was seeing a
psychiatrist, two plumbers, and a
bartender.
Despite billions in potential ad
revenue digital marketers
haven’t given Local much
respect . . .
It’s been seen as a “niche” or a
“vertical”

28. SMB Market Hard to Crack
94% of all US businesses have 4 or fewer employees
Nonemployer firms
Firms with 1 to 4 employees
16%
Firms with 5 to 9 employees
Firms with 10 to 19 employees
79%
Firms with 20 to 99 employees
“Last mile” problem: very tough to reach
SMBs w/o sales outreach.
Low value: majority of SMBs spend less than
$5K per year on marketing/advertising
Sources: US Census Bureau, Opus Research

29. Challenges Facing National-Locals
Source: CMO Council October, 2011 (n=300 brands, agencies)

30. Mobile

31. Mobile Helps People „Get Local‟
• Mobile phones can be located in a place at a point in time
• Bridges and brings more transparency to online  offlline pattern
• Marketers’ own smartphone adoption and behavior helps them
understand

32. Mobile Users More Active, Engaged
• Roughly 40% to 50% of browser-
based mobile search “related to
location”
• Local-mobile users take action:
- MSFT: within 1 hour (70%)
- Google: within a day (88%)
Source: Google-Ipsos, Microsoft (2010-2011)

33. Mobile Search  Local Action
• 94% of smartphone users have looked for local information
- 90% have taken action as a result
- 70% connected with the business
- 66% visited the business
- 36% made a purchase
- 23% told others about it
• 58% search for local information at least once a week
• 27% search for local info daily
Source: Google-Ipsos Q1 2012, n=1,000 US adults

34. Users Prefer Locally Relevant Ads
Would you prefer ads that are locally
relevant to you?
82% 9% 9%
77% 13% 1% %
0
19
20% 66% 15%
45% 16% 39%
No
28% 14% Yes
80%
Source: JiWire, Q4 2011; survey of adults in the US and UK using JIWire ad-supported WiFi networks

35. Local Targeting Increases Relevance
82% 9% 9%
77% 13% 1% %
0
19
66% 15%
45% 16% 39%
28% 14%
Source: IAB, 5/12 “mobile shopping diaries,” n=260

36. Mobile Growth in Paid Search Clicks
“Between 15% and 25% of paid
search traffic is now coming from
mobile devices . . .
In local-heavy categories, such as
dining, auto services and
entertainment this jumps to 50%
or more.”
-- DataPop CEO Jason Lehmbeck

37. Mobile Users Click More
Search Ad CTR Comparison
4.12%
3.12%
2.39%
PC Smartphones Tablets (iPad)
Source: Marin Software (Q1 2012)

38. But Do They Convert?
Comparative Conversion Rates
5.2%
4.9%
2.0%
PCs Smartphones Tablets
Source: Marin Software (Q1 2012)

39. Conversion Happens Somewhere Else
• 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

40. Only 26% Tracking Offline Impact
DataPop: “In some rare but interesting
cases [paid search marketers] are
tracking mobile ads down to the offer
level and they have seen 5 – 10X sales
when accounting for in-store
conversions.”
26%
Tracking offline
impact
Not tracking
74%
Source: Google/MMA , Global Perspectives: The Smartphone User & Mobile Marketer, June 2011

41. Smartphones/Tablets: Local Nuances
Stage of local business search when device is used
22% 24%
Throughout the entire
12%
17% process
21% At the end
29%
In the middle
45%
In the beginning
29%
Mobile Phone Tablet
Source: comScore-Localeze-15Miles Local Search Study, Q1 2012, n=4,000

42. Where Do You Use Your Smartphone?
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

43. IAB: US Mobile Ad Revenues (2011)
(in millions)
1,678
Search where local-mobile revenues
concentrated today.
Overall about 25% to 28%
811
64 572 66 74 81 MINUTES
43
MINUTES MINUTES
MINUTES MINUTES
295
MINUTES
Search Display SMS Total
Source: IAB June, 2012

44. Meeker: $20B Mobile Opportunity
64 66 74 81 MINUTES
43
MINUTES MINUTES
MINUTES MINUTES
MINUTES
Sources: Mary Meeker, KPCB “Internet Trends” presentation May 2012

45. Marketers Not Mobile-Ready
• Google: Mobile-friendly sites produce 75% higher rate of
engagement (revenue, page views, etc.) per visit for mobile users
• Feb 2011: “Of top 800 Google customers, 79% are not ready to
engage mobile customers.”*
• Feb 2012: Only 9% of 1,000,000 sites “mobile ready”**
• Q1 2012: Only 5% of independent restaurants have a mobile
website***
I’m
disappointed
in you
*Google: Jason Spero (ThinkMobile event 2011)
**Mongoose Metrics, February 2012
*** Restaurant Sciences Restaurant Internet Marketing Study (2012)

46. Social

48. Social Sites Follow Users: Mobile
901 million monthly active users; 526 million daily
active users; 500 million mobile users
80.4% reach; time spent: 20% (browser), 80% (apps)
500M registered users; 140M active users (55% to
60% active on mobile). Twitter generated more ad
revenue from mobile than from PC site “on many days
in the last quarter” (Twitter CEO Dick Costolo, 6/12)
Making a big push into mobile . . . with Google+ Local
content
Source: Company information, comScore (3/12)

49. Mobile Minutes on Social Apps/Sites
Average Monthly Minutes
(US Smartphone Users)
441.3
145.6
114.4
52.9 68.4
12.9
Facebook Twitter LinkedIn Pinterest Foursquare Tumblr
Source: comScore March, 2012

50. Reviews Preferred Information Source
Which is the preferred source for product/service
information?
Consumer ratings 63%
Consumer reviews 62%
Company website 50%
Call Center 47%
Email 45%
Top two reasons consumers
Video clip 34%
write reviews and share
Live chat 30% experiences online:
Company's Facebook Page 15%
1. Give recognition “for a job
Mobile app 9%
well done”
Online ad 8%
2. Protect others
Company's Twitter account 7%
Source: Nielsen and NM Incite (2011)

51. SMBs: How Do Customers Find You?
82%
66%
37%
23% 23% 21%
17%
Source: AMEX/Network Solutions 2/11 (n=400 US small businesses who did some form of online marketing)

52. Small Business Embracing Social Media
Which sites do you use to promote your business?
Facebook 70%
Google 55%
LinkedIn 52%
Google Places 42%
Yahoo 36%
Yelp 34%
Twitter 32% Other surveys: 45% to
Bing 26% 60% adoption of
Facebook Pages
YP.com 23%
Youtube 20%
Other 13%
Groupon 5%
Source: Opus Research-MerchantCircle (Q4, 2011) N=2,096 US small businesses under 100 headcount; Implied-Intelligence
analysis of 1.3 million US SMB websites

53. Study: 58% on Either FB or Twitter
Source: Palore July 2011

54. Search  Social Feedback Loop
Bing teamed up with
FB for “social search”
Search to differentiate from
Google.
Google responded
with
social/personalized
search and Google+
Also: Google+ Local
Social “Local is social” (M.
Mayer, June 2012)

55. Search + Social (Bing)

56. Google+ Local: SoLo Convergence

57. Foursquare: SoLoMo
Most well-known
“organic” SoLoMo app
Mobile was necessary
for check-ins and real-
time social notifications

58. Other Developments to Watch
• Siri: the further evolution of the voice interface and
intelligent assistant
• Facebook mobile initiatives (Local? Deals?
Facebook search?)
• Evolution of Facebook Credits (as offline [loyalty]
currency)
• Mobile payments and convergence of payments +
deals + offline analytics (“closing the loop”)
• Big (Local) Data: e.g., Skyhook, PlaceIQ
• Telematics and other new Internet access points
• Visual search (AR, scanning, Goggles)

59. And Remember, Wherever You Go . . .
There You Are
You Are
Here

60. Questions?
greg.sterling@gmail.com
@gsterling
Social Local
.
Mobile