Is App Usage Really on the Rise?

Worldwide smartphone use continues to rise at a rapid rate. In 2011, there were 38 million smartphone users worldwide; in 2012 the figure is at 84 million with the rise in numbers of users comes a rise in the range of apps on the market. Popularity of apps seems to be at an all-time high, with the average user’s smartphone containing on average 41 apps, compared to 32 in 2011. The average user is spending 39 minutes engaging with their apps a day in 2012, a slight rise from 37 minutes in 2011. Competition among app producers is similarly at a high point, with up to 20,000 downloads in the last 24 hours needed for an app to be listed in the top 25 of its kind. This number was 10,000 six months ago.

Despite these soaring statistics, is app usage really on the rise? Only 20% of smartphone users revisit a free downloaded app the next day, and a staggering 5% reuse apps a month later. This has a significant impact on advertising within these apps. For these ‘free apps’, if they were used on average 12 times by the user (a figure which seems unlikely for the typical smartphone user), the application would have to “bombard its users” in order to match the money it would make from paid sales. In dollar terms, the app would need to generate $8.75 per thousand impressions (CPM) to match such revenues raised by paid apps. Currently the average free app generates $0.50 to $2.00 (CPM) from advertising. Despite the growth of apps on the market, Facebook, Youtube and Gmail are still the most popular apps available. Another point of note: deal of the day websites have been used by 87% of all smartphone users.

What conclusions can be drawn from these figures? On the whole smartphone use is growing at a rapid rate, with this comes an expanding market for free downloadable applications. Is app use rising at an equivalent rate? While the average number on apps on a smartphone has risen, the actual usage of such apps drops off very quickly after the first day. This surely attributes to the inability to gain revenue through advertising to match that which paid apps can generate.

Smartphones & Mobile Search – A New Zealand Perspective

I recently attended a BBQ and a friend raised the question “does anybody know the score in the rugby?” to my amazement a friends grandfather pulled out an iPhone, made a search and announced the score.

So, it's safe to say that smartphones and the performing of searches on these devices is not a fad. The following stats back up this view;

1. A study conducted by Canalys in late 2010 identified that 27% of New Zealanders had a smartphone and Google have predicted that in mid-2011 smartphone penetration reached 35% with the trend to continue.
2. Based on data published by the IAB NZ, 55% of smartphone users have accessed a search engine via their mobile phone.
3. Internal Google data indicates that between 7-10% of searches are performed on a mobile device.

The way we use these devices has also started to change significantly as evidenced by these trends;

1. Until recently, mobile searches were heavily weighted towards quick, low consideration, functional searches for products and services such as movie session times, restaurant addresses, driving directions, etc… but now the time spent online using a mobile device is increasing, with people interacting via social media sites, conducting in-store competitor price/product comparisons, consuming media and making purchases.
2. A recent Google User Behaviour Study identified that one in three searches on a mobile is locally related.
3. People’s path to purchase is typically a lot shorter when searching via mobile devices. For example, a recent US study identified that 61% of individuals who made a search for a service on a mobile device called the business and 59% visited the business.

2011 has undoubtedly spelt the rise of the smartphone and we believe that this trend will continue through into 2012 and beyond. The mobile device is closing the gap between generic search based product consideration and purchase. Our recommendation - consult with your agency, prepare your website for mobile users, develop a Mobile Search strategy and take advantage of this ever-growing market.