e marketer mobile_content_activities_roundup

April 2015

The audiences for mobile content are huge—from video and games to social networking, apps and retail, more than 100 million US consumers are doing it on mobile phones. The smartphone hasn’t replaced the PC, but as more people consume more mobile content, they all expect an excellent mobile experience. eMarketer has curated a roundup of key stats, insights and interviews to help marketers stay on top of the latest trends.

MOBILE CONTENT AND ACTIVITIES ROUNDUP

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Mobile Content and Activities Roundup Copyright ©2015 eMarketer, Inc. All rights reserved. 2

MOBILE CONTENT AND ACTIVITIES ROUNDUP

Overview

Content is king—and that goes for mobile, too. In the US alone, the audiences for mobile phone video, music, games, search, social networks (and specifically Facebook) are more than 100 million strong. Not only that, but as late as 2015, each of those audiences is still growing by double-digit rates. More consumers are using more mobile devices to do more tasks than ever.

Apps are even bigger. eMarketer estimates nearly 170 million US consumers will install at least one app on their smartphone during 2015, up from around 150 million last year. Including tablet app installers brings the mobile app audience this year to more than 196 million.

The ecommerce audience on mobile is also growing robustly. This year, eMarketer forecasts, 121.8 million US consumers ages 14 and up will make at least one purchase via a mobile browser or app this year, whether on a tablet, smartphone or other device. That represents 70.9% of the total US digital buying audience this year. While nearly 100 million people will make a purchase via tablet this year, fewer than 80 million will do so on a smartphone—but that’s up from 67.2 million in 2014, and is expected to reach 105.6 million by 2019, when nearly half of all smartphone users will make a mobile purchase.

Though mobile users are gobbling up content—and stuff—via mobile, the smartphone is still not the equivalent of a PC. In the realm of commerce, mobile is still more popular as a research tool, while shoppers are out and about or in a store, showrooming, than it is for conversion. In terms of content, users still prefer short-form video clips to snack on, and tend to watch full-length shows or movies on larger devices.

As smartphones continue to get larger screens, and end up in the hands of ever-more users, publishers, app-makers and advertisers will all have to contend with growing audiences and continually changing expectation. But above all, these users want the same thing: an excellent mobile experience, no matter what they’re doing.

US Mobile Phone Content Usage Metrics, 2013-2019

Mobile phone video viewers (millions)

—% change

—% of mobile phone users

—% of population

Mobile phonemusic listeners(millions)

—% change

—% of mobile phone users

—% of population

Mobile phonegamers (millions)

—% change

—% of mobilephone users

—% of population

Mobile phonesearch users(millions)

—% change


—% of population

Mobile phonesocial networkusers (millions)

—% change


—% of population

Mobile phoneFacebook users(millions)

—% change


—% of population

Mobile phoneTwitter users(millions)

—% change


—% of population

2013

76.7

20.0%

31.0%

24.2%

71.6

31.9%

29.0%

22.6%

129.3

21.1%

52.3%

40.9%

109.6

32.7%

44.3%

34.6%

118.6

23.0%

48.0%

37.5%

100.3

21.2%

40.6%

31.7%

34.1

31.0%

13.8%

10.8%

2014

94.1

22.6%

37.2%

29.5%

87.2

21.7%

34.5%

27.4%

147.6

14.2%

58.4%

46.3%

133.6

21.9%

52.8%

41.9%

136.4

15.0%

53.9%

42.8%

115.9

15.5%

45.8%

36.3%

40.9

20.0%

16.2%

12.8%

2015

107.1

13.8%

41.5%

33.3%

100.1

14.8%

38.8%

31.2%

164.9

11.7%

63.9%

51.3%

157.3

17.8%

61.0%

49.0%

151.2

10.9%

58.6%

47.0%

128.8

11.2%

49.9%

40.1%

46.8

14.4%

18.1%

14.6%

2016

117.2

9.5%

44.7%

36.2%

112.3

12.2%

42.8%

34.7%

180.4

9.4%

68.8%

55.7%

177.8

13.0%

67.8%

54.9%

162.6

7.5%

62.0%

50.2%

138.8

7.8%

52.9%

42.8%

53.2

13.7%

20.3%

16.4%

2017

123.9

5.7%

46.6%

37.9%

121.3

8.0%

45.6%

37.1%

192.2

6.6%

72.3%

58.9%

196.5

10.5%

73.9%

60.2%

170.7

5.0%

64.2%

52.3%

145.8

5.0%

54.8%

44.6%

57.8

8.6%

21.7%

17.7%

2018

131.4

6.0%

48.6%

39.9%

128.5

5.9%

47.5%

39.0%

202.8

5.5%

75.0%

61.6%

207.6

5.6%

76.8%

63.1%

178.4

4.5%

66.0%

54.2%

152.3

4.4%

56.3%

46.2%

62.0

7.3%

22.9%

18.8%

2019

136.9

4.2%

50.0%

41.3%

134.5

4.7%

49.1%

40.5%

209.5

3.3%

76.5%

63.1%

215.8

4.0%

78.8%

65.0%

183.5

2.8%

67.0%

55.3%

156.5

2.8%

57.2%

47.2%

65.1

5.0%

23.8%

19.6%

Source: eMarketer, Feb 2015184779 www.eMarketer.com


Does Mobile Help Marketers Gain Customer Loyalty?

Loyalty efforts are the most popular mobile campaigns—and the most effective

Despite ongoing chatter about the channel for several years now, mobile marketing usage increased sharply last year. In a November 2014 Salesforce Marketing Cloud study, 46% of marketers worldwide reported using some form of mobile marketing, compared with 23% studied in the prior year. Nearly two-thirds of mobile marketers said mobile produced, or would eventually produce, return on investment, and 70% said the channel was a critical enabler of products and services—up 13 percentage points year over year.

Customer loyalty pays off—just ask Amazon.com and take a look at the loyalty of holiday gift givers—and marketers were bringing these efforts to mobile. Loyalty efforts were the most popular type of mobile campaigns, used by 37% of respondents. Mobile marketers also took advantage of prime shopping seasons, with 36% using the channel for holiday or event campaigns. The same percentage also sent SMSs that promoted email subscriptions.

Loyalty campaigns paid off, too, ranking No. 1 in mobile marketing effectiveness. With this in mind, Salesforce pointed out that marketers who haven’t launched loyalty programs yet should consider optimizing them for mobile. Consumers love their deals, and mobile-exclusive offers landed in second for effectiveness, along with win-back and conversation via keyword campaigns.

Loyalty-focused apps have emerged as part of the mobile marketing landscape—with examples including Starbucks and 7-Eleven. Oftentimes, these apps track customers’ activity and send them rewards and offers in return. But are consumers tapping into the trend? 451 Research found that 37% of US mobile phone users had used mobile reward program apps to collect or redeem points, and 21% were interested in trying one. While one can’t ignore the fact that 43% of respondents weren’t interested in redeeming points via mobile reward program apps, it’s

important to remember that quality often trumps quantity in the case of loyalty—maintaining devoted, big customers should be a key mobile focus.

% of respondents

Effectiveness of Select Mobile Campaign TypesAccording to Marketers Worldwide, Nov 2014

Very effective/effectiveSomewhat effective

Not very effective/not at all effectiveDon't know

Source: Salesforce Marketing Cloud, "2015 State of Marketing"; eMarketercalculations, Jan 13, 2015184490 www.eMarketer.com

Loyalty86% 12%

2%

Win-back85% 13%

2%

Mobile-exclusive deals85% 12% 2%

1%

Re-engagement84% 14% 1%

1%

Mobile welcome SMS84% 12% 2%

2%

Promoting email subscription via SMS83% 15% 1%

1%

Holiday or event campaign83% 14% 2%

1%

Drive cross-channel engagement83% 13% 2%

2%

Conversation via keyword85% 11% 3%

1%

% of respondents

Frequency with Which US Mobile Phone Users UseMobile Reward Program Apps to Collect/RedeemPoints, Sep 2014

Daily 8%

Weekly 10%

Monthly 10%

Tried once or twice9%

Would like to try 21%

Not interested 43%

Source: 451 Research, "2014 US Consumer Survey" as cited in companyblog, Dec 11, 2014183270 www.eMarketer.com


Mobile Retail Apps’ Special Role? Price Checkers

Price checking is most helpful mobile retail app feature

Lifestyle and shopping app usage soared last year, but retailers have a long way to go in terms of app development, according to December 2014 research by Boston Retail Partners. Among retailers polled in North America, just 16% had a smartphone app that worked well. An additional 22% had one, but it needed improvement, while 46% had plans to implement one within three years.

Whether they’re improving apps or starting from scratch, retailers would be wise to take into consideration the findings from October 2014 research by YouGov for InMobi. When the study asked US mobile internet users about the most helpful mobile retail app features, price checking was the top response, cited by nearly two-thirds of respondents. Checking item availability and comparison shopping—which often goes hand in hand with checking out prices—were the second and third most helpful features.

Including price information in mobile retail apps is even more important when one takes showrooming into consideration. Just under half of US internet users polled by Harris Interactive in December 2014 had showroomed, and based on recent research by comScore, price likely played the biggest role in their decision to buy online in the end. Among US smartphone owners polled, 52% said they had used their smartphone to search for better prices while showrooming—the highest response. Looking for online promotions and deals was second, though this trailed by 16 percentage points, and other details not related to price, such as item info and reviews, lagged by 21-plus points.

Giving mobile retail app users easy access to price details can satisfy their need for information and help sway their purchase decisions—just don’t expect them to push the buy button in the app itself.

% of respondents

Most Helpful Mobile Retail App Features According toUS Mobile Internet Users*, Oct 2014

Price check 64%

Item availability 50%

Comparison shopping 37%

Product demos 29%

Customer service 27%

Shopping list 25%

Store map 12%

Note: n=296; respondents chose their top 3; *who intend to purchase anereader, smartphone, smart wearable device and/or tablet/hybrid tablet inthe next 3 monthsSource: InMobi, "US Vertical Insights: Consumer Electronics – SmartWearable Devices" conducted by YouGov, Feb 2015185668 www.eMarketer.com

% of respondents

Ways in Which US Smartphone Owners Use TheirSmartphone While Showrooming*, Oct 2014

Search for better prices 52%

Look for online promotions/deals 36%

Search for item information 31%

Check reviews/ratings 30%

Make a purchase via mobile device13%

Other 22%

Note: *visiting a brick-and-mortar store to see a product but insteadpurchasing the product onlineSource: comScore Inc., "State of the US Online Retail Economy in Q3 2014,"Nov 18, 2014182886 www.eMarketer.com


Mobile Apps and Sites May Actually Work Together

Majority of smartphone owners tap links in mobile apps that lead to mobile site articles

Mobile app ads have been found to perform better than those on mobile sites, and other analysis suggests time spent with mobile internet skews heavily toward apps. However, in a December 2014 study by Harris Poll for the Interactive Advertising Bureau (IAB) Mobile Marketing Center for Excellence, US smartphone owners didn’t view usage the same way: 33% said they used mobile sites and apps with about the same frequency, compared with 18% who said they spent a significantly larger amount of time with apps.

The study pointed to in-app browsing as one reason for the difference in time spent figures vs. user opinions, and results suggested the two actually work together plenty of the time, as mobile apps act as a “portal” to web articles. Fully 52% of smartphone owners said they tapped links in mobile apps that led to articles on mobile websites at least sometimes, with around half of that group doing so often or very often.

Respondents who had been brought to articles on mobile websites after clicking in-app links found more value from such content, possibly because they’re already in an environment that relates somewhat to their interests. Fully 50% of smartphone users said they had learned new things as a result of accessing articles this way, and 39% said they found articles they wouldn’t have found otherwise. More than one-quarter (26%) also said this was a way to find publications and websites they didn’t know about.

IAB said apps served as “a key route” to mobile websites—especially social media apps. Fully 26% of smartphone owners used social media apps to find mobile websites—the third-highest response behind search engines (48%) and word-of-mouth (29%). Fully 14% of respondents also cited other mobile apps and news aggregation apps as sources.

The number of US consumers accessing the mobile internet via web browser or app will continue to rise by double digits (11.2%) this year. eMarketer expects 187.3 million mobile phone users in the US to go online via such devices, representing 72.2% of internet users, 72.8% of mobile phone users and 58.3% of the population.

% of respondents in each group

Frequency with Which US Smartphone Owners TapLinks in Mobile Apps that Lead to Articles on MobileWebsites, by Demographic, Dec 2014

GenderMale4% 11% 43% 28% 14%

Age18-344% 12% 41% 31% 12%

Very often Often Sometimes Rarely Never

Note: n=938 ages 18+ who own a smartphone and use mobile internet; numbers may not add up to 100% due to roundingSource: Interactive Advertising Bureau (IAB) Mobile Marketing Center forExcellence, "Apps and Mobile Web: Understanding the Two Sides of theMobile Coin" conducted by Harris Poll, Jan 14, 2015184281 www.eMarketer.com

Total39% 33% 16%3% 10%

Female2% 36% 37% 17%9%


Do Millennials Ever Put Down Their Mobiles?

Millennials spend more time than older consumers with almost all mobile communication activities

It’s no secret that millennials are attached to their mobile devices, and recent research from My.com, conducted by Survey Sampling International (SSI) in October 2014, set out to determine just how much time this demographic spent with their beloved smartphones and tablets.

According to the study, which included 13- to 24-year-olds in its definition of millennials, 45% of smartphone- and tablet-using 13- to 18-year-olds in the US spent 4 hours or more using the mobile internet each weekday, with 28% logging on for over 5 hours on average. Nearly half of 19- to 22-year-olds spent at least 4 hours with the mobile internet every weekday. Here, too, just less than one in three logged on for over 5 hours on average.

eMarketer estimates that this year, 88.0% of US internet users ages 12 to 17 will own and use a mobile phone at least once per month, and 80.8% will access the internet via such a device. Among 18- to 24-year-olds, mobile phone penetration will come in at 96.5%—the highest out of all age brackets—and 91.4% of these consumers will log on to the internet via their phones at least once per month.

Research has indicated that younger users spend more daily time on social networks, and My.com found that this trend wasn’t restricted to social. On both weekdays and weekends, millennials spent more time on average with all mobile communication activities besides email—which makes sense given that older consumers often need to access email more frequently for work.

Despite the looming death of SMS, text messaging grabbed the most time with millennials each day, with 114 minutes on average during the weekdays and 115 minutes on the weekends. Social networks were the second most frequent form of mobile communication across all days, followed by instant messenger apps, with average time for both rising about 10 minutes on the weekends.

Given all of the time they spend with mobile media, it makes sense that millennials want brands to be on top of their mobile game. According to September 2014 research by Annalect, when asked about the leading ways in which brands should use digital media, US millennial smartphone users ranked having mobile-friendly websites and apps No. 1, at 55%. While 44% did agree that brands should still maintain some form of human interaction, almost just as many (42%) thought they should offer loyalty programs through mobile apps or allow for mobile payments.

There’s no denying that millennials spend a huge amount of time with the mobile internet and communication tools. Brands looking to target them need to adapt to mobile in order to best reach them on their preferred screens.

minutes

Daily Time Spent Using Select Mobile CommunicationChannels on Weekdays vs. Weekends Among USSmartphone/Tablet Users, by Age, Oct 2014

Weekdays Weekends

Text/MMS

Social networks

Instant messengers

Voice calls

Video calls

Email

13-24

114

99

85

67

59

47

25-54

71

84

73

63

54

53

13-24

115

108

95

73

68

46

25-54

70

87

76

68

68

51

Note: mean daily minutesSource: My.com, "Millennials These Days: A Report on Evolving Mobile andDigital Habits" conducted by Survey Sampling International (SSI), Feb 26,2015186495 www.eMarketer.com


Mobile Will Account for 72% of US Digital Ad Spend by 2019

Consumer usage and better ad formats drive dollars to mobile apps

Mobile ad spending continues to increase at the expense of desktop, taking more and more share of marketers’ digital ad dollars, according to new figures from eMarketer. In 2015, mobile ad spending in the US will increase 50.0%, reaching $28.72 billion and accounting for 49.0% of all digital ad spending. By 2019, mobile ad spending will rise to $65.87 billion, or 72.2% of total digital ad spend.

Next year will be the tipping point where mobile ad spending surpasses desktop. And while desktop advertising will remain a significant portion of marketers’ budgets—approximately $25 billion in each year throughout eMarketer’s forecast period—mobile will continue growing in the double digits to gain more and more market share while desktop spending remains flat.

The shift to mobile ad spending is being driven mainly by consumer demand. In 2014, US adults spent an average of 2 hours, 51 minutes with mobile devices each day, up from 2 hours, 19 minutes in 2013. Meanwhile, desktop time fell to 2 hours, 12 minutes daily last year, after being equal with mobile time in 2013.

At the format level, mobile display dollars will continue to increase, outpacing mobile search. In 2015, US mobile display ad spending will reach $14.67 billion, compared with $12.85 billion for mobile search. Through 2019, both display and search will increase at a similar rate, with display widening the gap slightly by virtue of growing from a higher base. By the end of our forecast, mobile display ad spend will total $33.90 billion, while mobile search will be $28.41 billion.

It’s important to call out the “other” category as well, which includes classifieds, email and lead generation, among additional formats. US mobile ad spending on those formats will increase from $962 million this year to $3.32 billion in 2019. Meanwhile, mobile messaging ad dollars will rise in 2015 and 2016 before going on a slow decline through the remainder of eMarketer’s forecast period.

Our new forecast breaks out mobile app and mobile web spending for the first time. This year, app spending will outpace mobile web browser ad dollars nearly 3-to-1. Advertisers will spend $20.79 billion to reach consumers via mobile apps in 2015, compared with $7.93 billion on mobile browsers.

Advertisers are finding compelling opportunities through video, rich media and native in mobile apps, as well as a better ability to target captive audiences. Next year, when

US Mobile Ad Spending, 2013-2019

Mobile adspending (billions)

—% change

—% of digital ad spending

—% of total media adspending

120.0%

24.7%

2013

$10.67

6.3%

2014

$19.15

79.5%

37.7%

10.8%

2015

$28.72

50.0%

49.0%

15.3%

2016

$40.50

41.0%

60.4%

20.4%

2017

$49.81

23.0%

66.6%

23.9%

2018

$57.78

16.0%

69.7%

26.3%

2019

$65.87

14.0%

72.2%

28.6%

Note: includes classified, display (banners and other, rich media and video),email, lead generation, messaging-based and search advertising; adspending on tablets is includedSource: eMarketer, March 2015186582 www.eMarketer.com

billionsUS Digital Ad Spending, by Device, 2013-2019

2013

$32.44

$10.67

2014

$31.58

$19.15

2015

$29.89

$28.72

2016

$26.59

$40.50

2017

$24.96

$49.81

2018

$25.17

$57.78

2019

$25.35

$65.87

Desktop* Mobile**

Note: *includes spending primarily on desktop-based ads; **includesclassifieds, display (banners and other, rich media and video), email, leadgeneration, messaging-based advertising and search; ad spending ontablets is includedSource: eMarketer, March 2015186555 www.eMarketer.com


Mobile Will Account for 72% of US Digital Ad Spend by 2019 (continued)

mobile spending will surpass advertising on the desktop for the first time, app ad dollars will continue to gain steam, increasing 42.6% to nearly $30 billion, or 73.2% of all US mobile ad spending.

Mobile web ad spending will also grow at a healthy clip, rising 36.8% in 2016 to $10.84 billion, eMarketer estimates. Spending on the mobile web is being driven by programmatic, cookie-based targeting and bundling across devices.

eMarketer’s latest mobile ad spending forecast also includes mobile app install ads for the first time. We estimate that US app install ad spending totaled $1.67 billion in 2014, or 8.7% of all mobile ad spend, and expect this to reach $3.00 billion this year. That figure is an 80.0% year-over-year increase, yet still only accounts for 10.4% of all mobile ad dollars.

Spending on app install ads via mobile search was negligible last year, so the low share of total mobile ad spending doesn’t paint the entire picture. App install ads accounted for 17.3% of US mobile display ad spending in 2014, and this is expected to grow to nearly 20% this year. The leading search providers are making strides to attract app developers’ ad dollars, but we expect app install ads to represent an insignificant portion of mobile search spending in 2015.

billionsUS Mobile Ad Spending, by Format, 2013-2019

Display

—Banners, rich media,sponsorshipsand other*

—Video

Search

SMS/MMS/P2P messaging

Other(classifieds, email, lead gen)

Total

2013

$5.31

$4.59

$0.72

$4.92

$0.25

$0.20

$10.67

2014

$9.65

$8.11

$1.54

$8.72

$0.24

$0.55

$19.15

2015

$14.67

$12.05

$2.62

$12.85

$0.24

$0.96

$28.72

2016

$20.80

$16.87

$3.94

$17.87

$0.26

$1.57

$40.50

2017

$25.69

$20.60

$5.09

$21.73

$0.25

$2.14

$49.81

2018

$29.74

$23.78

$5.96

$25.04

$0.24

$2.76

$57.78

2019

$33.90

$27.04

$6.86

$28.41

$0.24

$3.32

$65.87

Note: ad spending on tablets is included; numbers may not add up to totaldue to rounding; *includes ads such as Facebook's News Feed Ads andTwitter's Promoted TweetsSource: eMarketer, March 2015186584 www.eMarketer.com

US Mobile Ad Spending, In-App vs. Mobile Web,2014-2016

In-app (billions)

—% change

—% of total

Mobile web (billions)

—% change

—% of total

Total (billions)

2014

$13.67

88.2%

71.4%

$5.47

61.0%

28.6%

$19.15

2015

$20.79

52.1%

72.4%

$7.93

44.8%

27.6%

$28.72

2016

$29.66

42.6%

73.2%

$10.84

36.8%

26.8%

$40.50

Note: includes advertising that appears on mobile phones and tablets, andincludes all the various formats of advertising on those platforms; numbersmay not add to total due to roundingSource: eMarketer, March 2015186912 www.eMarketer.com


Mobile Game Revenues to Grow 16.5% in 2015, Surpassing $3 Billion

Gaming leads growth of $10 billion mobile content market as ebook and music downloads stagnate

US mobile game revenues—including both downloads and in-app purchases—will grow 16.5% this year to reach $3.04 billion, according to new figures from eMarketer. By virtue of this growth, mobile games will account for 30.9% of the US mobile content market in 2015, up from 29.3% in 2014.

In-app purchases are driving increases in US mobile game revenues, due in part to growing popularity of freemium models among app developers. This year, in-app revenues for mobile games will total $1.82 billion, or 59.8% of all mobile game revenues, increasing to nearly $2 billion next year, when share of the mobile game market will be 60.1%.

Overall, mobile content revenues in the US—which include purchases of mobile goods such as ebooks, games, videos and music, but exclude ad-supported revenues and subscriptions—will total $9.82 billion in 2015, a 10.3% increase from 2014. Next year, mobile content revenues will increase another 6.3%, reaching $10.44 billion and accounting for 10.6% of all retail revenues on smartphones and tablets in the US.

Mobile content purchases on the whole are beginning to slow, which tracks user growth and consumer habits. Smartphone and tablet ownership in the US is not yet at saturation, but the days of exponential growth are certainly behind us.

“Since mobile content is native to the devices, it’s often new mobile users’ first introduction to mcommerce,” said Martin Utreras, senior forecasting analyst at eMarketer. “As the US mobile user base matures, mobile content revenues are taking a smaller share of the overall mcommerce market as consumers become more comfortable buying physical retail items and making more expensive purchases from their devices.”

billions, % change and % of total mobile download and in-apprevenues*

US Mobile Game Revenues, 2013-2016

2013

$2.03

71.2%

26.4%

2014

$2.61

28.5%

29.3%

2015

$3.04

16.5%

30.9%

2016

$3.31

8.9%

31.7%

Mobile game revenues% change % of total mobile download and in-app revenues*

Note: includes game downloads and in-app purchases on ereaders, mobilephones and tablets; excludes ad-supported revenues and subscriptions;*includes downloads of ebooks (including audiobooks), games, music andvideo, as well as game in-app purchases and other; includes ereaders,mobile phones and tablets; excludes ad-supported revenues andsubscriptionsSource: eMarketer, Feb 2015185159 www.eMarketer.com

US Mobile Game Revenues, by Venue, 2013-2016

Game in-app purchases (billions)

—% change

—% of mobile game revenues

—% of total mobile download andin-app revenues*

Game downloads (billions)

—% change

—% of mobile game revenues

—% of total mobile download andin-app revenues*

2013

$1.12

99.3%

55.0%

14.6%

$0.91

46.0%

45.0%

11.9%

2014

$1.51

35.6%

58.1%

17.0%

$1.09

19.8%

41.9%

12.3%

2015

$1.82

19.9%

59.8%

18.5%

$1.22

11.7%

40.2%

12.4%

2016

$1.99

9.4%

60.1%

19.1%

$1.32

8.1%

39.9%

12.6%

Note: includes game downloads and in-app purchases on ereaders, mobilephones and tablets; excludes ad-supported revenues and subscriptions;*includes downloads of ebooks (including audiobooks), games, music andvideo, as well as game in-app purchases and other; includes ereaders,mobile phones and tablets; excludes ad-supported revenues andsubscriptionsSource: eMarketer, Feb 2015185160 www.eMarketer.com


Mobile Game Revenues to Grow 16.5% in 2015, Surpassing $3 Billion (continued)

Ebook sales will reach $4.25 billion in 2015, accounting for 43.3% of US mobile download and in-app revenues in 2015. While ebooks will maintain the largest share of mobile content revenues throughout our forecast, growth is flattening. Music downloads are also losing share of the mobile content market, since music revenues have been particularly affected by the rise in subscription and streaming services. Video download revenues are still growing, expected to increase 13.8% this year, but may also see an impact from subscription and streaming services over time.

billionsUS Mobile Download and In-App Revenues, 2013-2016

2013 2014 2015 2016

Ebook downloads* $3.95 $4.07 $4.25 $4.38

Games $2.03 $2.61 $3.04 $3.31

—Game in-app purchases $1.12 $1.51 $1.82 $1.99

—Game downloads $0.91 $1.09 $1.22 $1.32

Video downloads $0.49 $0.74 $0.85 $0.93

Music downloads $0.47 $0.52 $0.55 $0.58

Other** $0.73 $0.95 $1.13 $1.24

Total $7.68 $8.90 $9.82 $10.44

Note: includes ereaders, mobile phones and tablets; excludes ad-supportedrevenues and subscriptions; numbers may not add up to total due torounding; *includes audiobooks; **includes all other content downloadsand in-app purchasesSource: eMarketer, Feb 2015185234 www.eMarketer.com

% of total and billions

US Mobile Download and In-App Revenue Share,2013-2016

2013 2014 2015 2016

Ebooks downloads* 51.5% 45.8% 43.3% 42.0%

Games 26.4% 29.3% 30.9% 31.7%

—Game downloads 11.9% 12.3% 12.4% 12.6%

—Game in-app purchases 14.6% 17.0% 18.5% 19.1%

Video downloads 6.4% 8.4% 8.6% 8.9%

Music downloads 6.2% 5.9% 5.6% 5.5%

Other** 9.5% 10.7% 11.5% 11.9%

Total (billions) $7.68 $8.90 $9.82 $10.44

Note: includes ereaders, mobile phones and tablets; excludes ad-supportedrevenues and subscriptions; numbers may not add up to 100% due torounding; *includes audiobooks; **includes all other content downloadsand in-app purchasesSource: eMarketer, Feb 2015185235 www.eMarketer.com


Only 33% of US Mobile Users Will Pay for Apps This Year

Tablet users are more likely than smartphone users to buy apps

Put a dollar sign in front of an app, and the number of people who are willing to download and install it drops dramatically. According to a new forecast from eMarketer, 80.1 million US consumers will pay for mobile apps at least once this year, representing only 33.3% of all mobile users.

The total figure is inclusive of feature phones, which depresses the overall penetration rate. However, a minority of consumers among both the smartphone and tablet user groups will pay for and install apps on their devices this year. Only 35.8% of all US smartphone users will purchase apps in 2015, totaling 65.2 million people. Tablet users are much more likely than smartphone users to buy apps for their devices, and eMarketer estimates that 44.0% of all US tablet users, or 60.9 million people, will purchase apps for download and installation on those devices this year.

“The preference for free, ad-supported apps is rising among mobile users, and the share of smartphone and tablet users who pay for apps will actually tick downward over the next four years, despite the continued growth in the number of smartphone and tablet users and the number of app users overall,” said Cathy Boyle, senior mobile analyst at eMarketer.

It’s not only waning demand that’s depressing the market for mobile app purchases; supply is also in decline. Since apps are perceived as a cost center by some smartphone users, developers cognizant of consumers’ preference for free apps have been steadily moving away from the pay-to-download model in order to attract a larger base of users. Paid apps can and do attract a sizeable and loyal audience—some in the productivity, business and navigation categories, for example—but that is a declining percentage of the marketplace.

Furthermore, many developers have tested the paid download model against the various iterations of the free model—namely in-app purchases, subscriptions and in-app advertising—and on the whole, they’ve found the latter approach to be more lucrative.

Of course, the fact that a majority of mobile users don’t want to pay for apps doesn’t mean they’re not installing them. eMarketer estimates that nearly 93% of US smartphone users will download and install at least one app this year, and more than 90% of tablet users will do so.

US Mobile App Buyers, by Device, 2013-2018

Smartphone (millions)

—% change

—% of smartphone users

Tablet (millions)

—% change

—% of tablet users

Total (millions)

—% change

—% of mobile users

2013

42.4

57.0%

30.0%

54.6

28.8%

47.0%

62.9

50.4%

27.2%

2014

59.0

39.3%

36.0%

58.4

7.0%

45.0%

77.1

22.6%

32.7%

2015

65.2

10.4%

35.8%

60.9

4.3%

44.0%

80.1

3.9%

33.3%

2016

70.1

7.5%

35.5%

63.3

3.9%

43.6%

82.3

2.7%

33.7%

2017

73.8

5.3%

35.3%

65.1

2.9%

43.4%

83.7

1.8%

33.8%

2018

76.9

4.2%

35.3%

66.7

2.4%

43.3%

85.0

1.5%

33.8%

Note: ages 14+; mobile device users who have purchased at least one appvia an app store for use on their mobile device during the calendar year;excludes virtual goods and subscriptions; smartphone and tablet appbuyers are not mutually exclusive; there is overlap between groupsSource: eMarketer, Feb 2015184455 www.eMarketer.com

US Mobile App Installers and Penetration, by Device,2013-2018

Smartphone (millions)

—% change

—% of smartphone users

Tablet (millions)

—% change

—% of tablet users

Total (millions)

—% change

—% of mobile users

2013

127.5

28.6%

90.3%

99.3

39.2%

85.5%

160.5

29.9%

69.4%

2014

149.7

17.3%

91.3%

114.7

15.5%

88.4%

181.6

13.1%

77.0%

2015

169.1

13.0%

92.9%

125.0

9.0%

90.3%

196.2

8.1%

81.5%

2016

184.5

9.1%

93.5%

133.0

6.4%

91.6%

206.4

5.2%

84.5%

2017

196.9

6.7%

94.2%

139.4

4.8%

92.9%

215.4

4.4%

87.0%

2018

207.0

5.1%

95.0%

144.5

3.7%

93.8%

222.1

3.1%

88.2%

Note: ages 14+; mobile device users who have installed at least one mobileapp on their mobile device during the calendar year; includes paid and freeapps; smartphone and tablet app installers are not mutually exclusive;there is overlap between groupsSource: eMarketer, Feb 2015184683 www.eMarketer.com


Mobile Web Outpaces Apps for Retail Transactions

Sonia Nagar

Senior Director, Mobile Product Strategy

RetailMeNot

RetailMeNot is a marketplace platform that offers consumers digital coupons and discount codes for approximately 70,000 retailers. Sonia Nagar, RetailMeNot’s senior director of mobile product strategy, spoke with eMarketer’s Rimma Kats about the pros and cons of mobile sites vs. apps and when it makes sense for retailers to have both.

eMarketer: What percentage of your clients have both a mobile app and a mobile site?

Sonia Nagar: Out of the thousands of retailers we work with, it’s actually a really low percentage. When you think about who has both an Android and an iOS app, that number gets even lower. Most retailers start with iOS—there’s a higher percentage representation there. For many, the Android platform is an afterthought. That may have to do with the demographic and the spend propensity.

Many retailers did start with the mobile web first. You see a higher percentage of retailers that have a mobile site vs. a mobile app.

“The majority of traffic is still coming from the mobile web vs. mobile apps. Mobile web dominates.”

eMarketer: What percentage of the shopping apps that you have are commerce-enabled?

Nagar: We work mostly with ecommerce retailers and in-store partners. Probably less than 5% are not commerce-enabled.

eMarketer: Of the sales transactions that are coming through mobile devices, what percentage comes through apps vs. the mobile web?

Nagar: The majority of traffic is still coming from the mobile web vs. mobile apps. Mobile web dominates.

eMarketer: Why do you think that is?

Nagar: It has to do with discovery. A lot of shoppers will still go to Google when they are figuring out where to shop. As a result, we see strong traffic coming through the mobile web.

We’ve also invested heavily in mobile apps. On certain days, like weekends, we see a shift in traffic. During the weekdays, people tend to shop online. On weekends, when people are in-store, that’s when they use our mobile app, and that can sometimes overtake the mobile web.

“When a user comes into the app, we ask them to opt in to certain programs that allow us to market to them on an ongoing basis.”

eMarketer: How do businesses go about setting objectives for their mobile site and apps?

Nagar: In order to have a successful app, you need to have people using it. It’s important to understand what your monthly active users look like. When a user comes into the app, we ask them to opt in to certain programs that allow us to market to them on an ongoing basis. We market to them two ways: One is push notifications, the second is email. We also have some metrics that we’ll look at for email and push to understand the health of those channels and drive re-engagement for the app.

eMarketer: When does it makes sense to have one mobile channel, either an app or a mobile site, instead of both?

Nagar: If you don’t have the engineering and resources to make a continuous investment or even the marketing resources to continuously manage push programs, then forego an app and focus on the mobile web.

If your brand loyalty isn’t that strong and you are going to have trouble drumming up a meaningful user base for an app, then it may be best to focus on the mobile web only.


Mothers’ Smartphones Are Their ‘Do-Everything Device’ and Way to Escape

Julie Michaelson

Vice President, Global Sales

BabyCenter

Different phases of motherhood drive different patterns of digital usage for mothers. They’re looking for different kinds of products, services and information, leading them to overlook ads when these communications seem out of place. Julie Michaelson, vice president, global sales at BabyCenter, spoke with eMarketer’s Stephanie Wharton about mothers’ behavior online and how marketers can win them over with the right message at the right time.

eMarketer: How do mothers use digital media to de-stress?

Julie Michaelson: Moms use mobile specifically to help them with their daily lives and to accomplish all the tasks they need to get done. It’s kind of their do-everything device. We’ve found that about 73% of moms are watching video on their mobile devices, and the No. 1 type of content they’re watching is entertainment-based.

About 30% are using parenting communities on a daily basis. Those communities are awesome for information and advice, but we’ve also found that they can be a really great source of entertainment and a place for them to talk with other moms they identify with.

eMarketer: Does leisure time feel less leisurely for mothers than for non-mothers? If so, how does that affect the way they consume digital media?

Michaelson: Moms naturally have less leisure time. As a mom, that’s true for me. I think they value it more. We hear a lot from our moms on the need to focus themselves and take “me time” out of their busy day.

They are sneaking little bits of leisure throughout their day. We’ve found that they are connecting and using social media 15 times a day on average, which is huge.

“We hear a lot from our moms on the need to focus themselves and take ‘me time’ out of their busy day.”

eMarketer: Do different phases of motherhood bring about different patterns of digital usage?

Michaelson: We look a lot at what we call the changing face of motherhood: How a woman’s media usage changes from the time she becomes pregnant to after she has a baby to the time her child gets older.

When she’s pregnant, especially for the first time, her need for information is huge. She’s checking her BabyCenter app, getting our weekly emails and she’s researching all the various products she didn’t know she needed until she had the baby. Her media usage is really heavy, and she’s using it largely for learning, researching and discovering.

Then after the baby is born, it really does change. She’s using digital media to look up questions on how to do things: how to feed a baby, how to make sure the baby is getting enough sleep. They have tons of questions, and quite frankly, they have less time with their doctor than ever before, so they’re looking for answers. They’re looking for guidance from other moms as well as experts online.

eMarketer: Do mothers feel that ads sent to their smartphones are intrusive?

Michaelson: They haven’t said that they find them intrusive, but they do say they dislike seeing ads that aren’t relevant to them. We also heard comments that they don’t like seeing ads for products they had already purchased.

“If she’s pregnant, we’re not showing her an ad from a yogurt product for kids in preschool. She might find something like that intrusive.”


Mothers’ Smartphones Are Their ‘Do-Everything Device’ and Way to Escape (continued)

Since we know mom’s due date and we know how old her child is, it’s very, very easy for us to connect marketers with mom at the right time with the right message. For example, if she’s pregnant, we’re not showing her an ad from a yogurt product for kids in preschool. She might find something like that intrusive. The more relevant you can make the message, the more receptive mom is going to be to it.

eMarketer: Do single mothers feel ignored by the media?

Michaelson: Just under half of births today are to unmarried women, and the majority of those women are without a partner. It’s definitely a group of moms we are

looking at very closely. Through our research and talking to them, we’ve found that the majority of those single moms feel that single motherhood has really become socially acceptable, but we hear from many of them that advertising doesn’t really reflect the nontraditional family unit that has become almost commonplace today.

We also know that the No. 1 thing they say they look for when they’re considering different brands is that they want to buy from brands that really share their values. We encourage our clients and marketing partners to make sure their advertising really relates to what families look like today.


Terra’s Research Points to Hispanics as Largest Mobile Content Viewers

Soizic Sacrez

Director of Marketing

Terra

Soizic Sacrez, director of marketing for Terra, a global digital media company, discussed with eMarketer the findings in Terra’s latest round of research into US Hispanics’ media usage, revealing insights into why Hispanics are more likely to access video content via mobile and pay for video content.

eMarketer: Terra’s research shows that Hispanics are accessing entertainment content on mobile at a much higher rate than non-Hispanics. Did the research give you some idea of why this is?

Soizic Sacrez: We’ve been seeing this trend over the course of the past few studies—Hispanics overindex on everything mobile. Specifically for entertainment, Hispanics are passionate about music, entertainment and sports, and they like to be up to date on what is going on with artists and athletes they are following. Overall, it’s a cultural point.

eMarketer: Are you seeing this behavior across all ages? Or is it more likely to be a millennial behavior?

Sacrez: We are seeing some differences through the generations. For instance, looking at the data for listening to music on smartphones, 76% of millennials said that they were listening to music on their smartphones, vs. 68% of Gen X and 43% of baby boomers. And some of this has to do with technology adoption [since younger generations are more likely to use digital technology]. But if we look at the whole group of Hispanics, in general, they are going to listen more to music [than non-Hispanics].

eMarketer: The research also showed that Hispanics are more likely to pay for access to entertainment content. When there is so much free content, why are Hispanics paying for content?

Sacrez: It depends on the category, but much of it has to do with watching a program live rather than after the fact. Sports, especially, are a passion point. Boxing and soccer are key sports among Hispanics, and they are willing to pay to experience the game live. Especially if they follow a specific boxer or a specific team, they are more likely to pay.

eMarketer: The research also shows that Hispanics are more likely to access this content on smaller screens—smartphones, tablets—than non-Hispanics. Did you get some indication as to why this is?

Sacrez: Hispanics overindex in everything mobile, and we have seen that throughout our studies. We’re seeing a lot of [video] consumption on the go. It’s primarily a comfort level [they have with mobile devices]. In Latin America, too, there is a lot of mobile consumption. They are more connected to their families and friends through their smartphones; for instance, when they are in a retail store they will send a picture of the product to their family, more so than the non-Hispanics. So, mobile consumption of video is comfortable for them.

eMarketer: Is the content they are consuming more likely to be in Spanish or English?

Sacrez: We’ve seen that millennials are more likely than Gen X to favor some online content in Spanish. And that’s interesting, because that shows an attachment among the younger generation to their culture and to the Spanish language. I think it has to do with pride in their heritage. We do see also that Spanish-preferred Hispanics tend to be a bit more engaged, for instance, in commenting, sharing and participating than the English-preferred Hispanics, and that’s true in particular for live events around sports entertainment and music.

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