Greg SterlingSterling Market Intelligence/Opus Research

April 29, 2010

‘‘Mobile, Local and Real-Time Search’Mobile, Local and Real-Time Search’

(mostly mobile)(mostly mobile)

• Jobs: lawyer, editor, startups, analyst, blogger, lover, fighter

• Coverage:- search, directories, verticals/classifieds, online

newspapers, “social media,” mobile, video, multi-channel shopping

About Me . . .

“Internet’s impact on offline consumer behavior”

Faster . . . And Faster

We know something's happening, and we're beginning to sense what it is. We're speeding up; our technology is speeding up; our arts and entertainment and the pace of invention and change -- it's all speeding up.

James Gleick, Faster (1999)

How Many Smartphones in This Room?

Or should I ask . . . Who doesn’t have a smartphone?

• Exciting pocket computers and tablets

• Ubiquitous connectivity (which is coming)

• Culture of participation/sharing: “tweets, updates, tips”

• Geotagged data, matched with places

• The Cloud: my content, any device

• Internet-based computing will look very different in a few years than today

Tweets + Streets

“We’re at the beginning of the beginning” . . . of a new era of computing.

--Google Engineering VP Vic Gundotra

• We now can take the Internet with us

• We use these devices to help make decisions

• Influenced by opinions and recommendations of others; deals, discounts, incentives

• All that can now be accessed or pushed in near real time to our handsets in specific contexts.

• There’s also cool stuff like augmented reality (Zillow has a version of this today)

Mobile + Local + Real Time: All Connected

Local, Mobile, Social, Real-Time Converge

Geotagged Tweets on Maps

Foursquare ‘Tips’ on Bing Maps

Quick B.G. on LocalQuick B.G. on Local

• Local is the ‘last mile of search’; mobile is ‘last block’

• Local is about driving to the POS

• 96% of all transactions happen offline*

• Offline transactions increasingly Web-influenced

- 80% to 90% consumers do online research before buying**

*US Census Bureau, Q4 2009**Compete, Yahoo!, BIGResearch, BIA, other studies (2007-2010)

What Is Local?

• Local means different things in different contexts

• Definitions of “local” may also vary depending on whether discussing consumers or advertisers

• Most of what people do online relates to their real-world lives

• Maps & Directions

• Restaurants

• Retail/products

• Professional & home services

• Travel

• Jobs

• Cars

• Real Estate

• Entertainment

• Dating

Most of What We Do Online about Offline

• Google: “20% of searches on Google are related to location”

• comScore: in March Google had 14.3 billion search queries

• That’s TWO BILLION EIGHT HUNDRED SIXTY MILLION local queries monthly (at a minimum)

Google: Over 30 Billion Served

Your Customers Are Your Customers Are DigitalDigital

Millennials More Tied to Internet, Tech

Source: Pew Internet & American Life (2/10)

93% of Millennials are online

63% of 12-17 yr olds online at least once a day

68% of adults 18 - 29

Internet Trumps Traditional Media

Source: Trulia-Harris Interactive, May 2009 n=2,715 US adults; home buyers n=192

Information sources for home buyers (Internet vs. traditional media):

• 62% of home buyers reported use online sources during their housing search

• Primary source:

- 41% Internet

- 14% print

Hitwise: Top 20 Real Estate Sites

Source: Hitwise, April 17 2010

Google ‘Verticalizes’ Local for Real Estate

The Social Media The Social Media ‘Firehose’‘Firehose’

(where the RT data come from)(where the RT data come from)

Facebook Top Search Term

• More than 400 million active users• 50% of active users log on to Facebook in any given day• Average user has 130 friends• People spend over 500 billion minutes per month on FB• More than 100 million mobile users, 2X more active

Facebook On Way to Being #1?

Source: Compete, Inc. March 2010

• Google: 146,954,711• Facebook: 132,040,907

The Twitter ‘Firehose’

• Twitter has 105,779,710 registered users

• 300,000 new users sign up per day

• Twitter receives 180 million unique visitors per month

• 75% of Twitter traffic comes from third-party applications

• 60% of all tweets come from third-party apps

• 600 million search queries on Twitter per day

• Over 100,000 Twitter applications

• 3 billion requests a day through its API

• 37% of active Twitter users use their phone to tweet

Mobile (finally)Mobile (finally)

Projection: Mobile Bigger than PC by 2014

Source: Morgan Stanley Internet Update 4/2010

Comparing Populations: US, Online, Mobile

Source: Opus Research, comScore, CTIA, Nielsen, US Census Bureau (2009)

4 Major US Carriers: 250M subs approx.

Mobile Internet: 73M

4.1B texts DAILY

Daily Internet access between 30% and 55%

Segments: SMS, Mobile Web, Apps

26

SMS: Least “sexy,” broadest reach, platform

“agnostic”

Apps: Richest experience, smaller

audience

Mobile Web: Tiny version of site; should be

optimized

Reach Engagement

27Source: Nielsen, Q1 2010

Projection: US Smartphone Growth

US ‘Smartphone’ Share

Source: comScore, 3/10

SMS vs. Mobile Internet

Source: comScore, Pew Internet & American Life Project (March, 2010)

Among US smartphone owners frequency and penetration are greater.

Total mobile Internet users in US approaching 75 million on way to 100 million this year

30

Activities: Touchscreen Smartphone Users (iPhone/Droid/BlackBerry Storm)

Source: Opus Research, 3/10 (n=105 touchscreen smartphone users, total sample 1,300)

“Over the last 12 months, how often have you engaged in the following activities?”

Source: Opus Research, 3/10 (n=393 smartphone users, total sample 1,300)

3844

62% at least weekly mobile Internet users

53% of smartphone owners report using mobile Internet “at least once a day”

90%+ of iPhone users access the mobile Internet

Opus Research, 3/09; Nielsen (2009)

Source: Nielsen, 12/09

Data from Jan – Sept, 2009

Nielsen: Top Mobile Sites 2009

Source: Opera Software (3/10)

March, 2010 Opera Mini Usage in US

Opera: Top Sites

According to a 2009 comScore survey of 7,300 US iPhone/iPod Touch owners . . .

Mobile Preferred Medium?

40% said they go online more often on their mobile devices than via PC.

Mobile + Real EstateMobile + Real Estate

Scores of Apps for the iPhone OS

• 100+ apps shown in response to search for “real estate”

• 38 apps for “apartment”

• 3 “apartment” apps for the iPad

Trulia Mobile Trends: Buyers

• The busiest day for mobile day is Sunday, Saturday second

- Sunday has about 70% more usage than Friday (the lowest day)

- Consistent pattern: iPhone app & Trulia access via mobile browser

• Over 50% of searches on iPhone are for properties “near me”

- Most popular city in July was Corona, CA

- Most popular zip in July was 60035 (Highland Park, IL)

• No specific locations dominant

Source: Trulia, 8/09

”We hear from agents and consumers who say they found an open house they didn’t know about through the iPhone app.”

"Mobile is about weekend house hunting and finding open houses."

Trulia Mobile Trends: Renters

So far (Since launching rental property search on 4/7):

•Rental performance on mobile is on par with overall mobile performance, in both visits, page views and leads to properties

•Seeing around approx 10% mobile usage for Trulia, with spikes coming on the weekends

•Apple OS is still the biggest source of traffic on our mobile website, but Android is the fastest growing

•Trulia CEO: Rentals even more suited to mobile because they’re more “perishable” and there’s more impulse there

Source: Trulia, 8/09

Zillow: Mobile Users More Engaged

• On the weekends, 15% of homes viewed on Zillow come from mobile devices (10% during the week).

• Relative to Zillow.com traffic, users are viewing active listings 45% more often from mobile devices (which indicates the mobile audience is primarily active buyers, on location or scoping out neighborhoods.

• Over two million homes are viewed on the iPhone each month.

• Zillow iPhone+iPad App - 1.1 million combined downloads.

• Zillow Android App is the leading real estate app in the Android Market, 150K + downloads in one month since launching.

Source: Zillow, 4/10

Zillow’s Mobile Future

Source: Zillow, August, 2009

“There is a future where the majority of Zillow usage will come from a mobile device.

Quite literally, launching this app has changed the way we are thinking about the future of our business and how people will get their real estate information.”

--Amy Bohutinsky, VP Zillow

Mobile Marketing & ROIMobile Marketing & ROI

The Paradox of Choice

How to Think about Mobile

• It’s real; user base is already large

• Mobile buyers on the go are “actively looking”

• Leads can potentially be better

• Mobile not a “stand alone channel,” use in tandem with online + print – extends reach of other media; think about integration

• Enables immediate response/action from buyers

• Mobile Search (already doing SEO/PPC?)

• Display & Rich Media (mobile Web, in-app, video)

• Branded app (publisher, broker, maybe agent)

• Listings (classifieds)

• Do nothing: your data will make it into mobile (probably)

What Are the Options?

Google Mobile AdWords: Consumer

Pros: Online campaigns can carry into mobile easily (+ PPCall option); CTR & call through rates higher in mobile

Cons: Much more limited inventory

Google Mobile AdWords: Marketer

Target carriers, devices, mobile only

At least 35 mobile “ad networks” operating in US market. The top ones are the following:

•Google

•Yahoo!

•Microsoft

•AdMob (Google, pending)

•Quattro (Apple)

• JumpTap

• Millennial Media

• AOL

• Greystripe

Top Mobile Ad Networks

Sophisticated Targeting: Mobile ‘PRIZM’

Facebook Targeting: Demo, Geo, Interest

Facebook allows multiple layers of targeting based on user registration, location and profile data

Consumer Attitudes & Consumer Attitudes & ResponseResponse

Nielsen:

• 68% of mobile data users in US opposed to mobile Internet ads, even if those ads subsidize a portion of their bills.

• Only 8% feel mobile ads are trustworthy

• 87% are not open to mobile ads even if those ads are relevant to their interests

Source:: Nielsen, Citibank 4/09; Opus Research, 3/09 (n=707 mobile phone users)

Consumers Historically Hostile to Mobile Ads

Source: eConsultancy 4/09 n=1,400 US adults

“I Hate Advertising on . . .”

Numbers here are the lowest/most receptive I’ve seen based on survey data

53

% AGREE

Source: Opus Research/I2Go, 4/09, n=611

Mobile Internet Users More Receptive

1. Movie/event tickets (43%)

2. Weather information (39%)

3. Clearance/liquidation sales (37%)

4. Pizza (31%)

5. Clothes (30%)

Source: 1020-Placecast, Harris Interactive, 7/09 (n=2,029 US adults)

Interested in SMS Alerts/Offers

6. Fast food (27%)

7. Electronics (25%)

8. Music (24%)

9. Happy hour specials or bar and night night club offers (21%)

38% of smartphone owners have taken action in response to mobile ads. Of that group:

- 53% clicked on ads

- 35% opted-in to receive more information/deal via email

- 34% made purchase online or in-store- 32% opted-in to receive more information/deal via SMS

- 24% made purchase via mobile

Response rates vary by campaign and method but are considerably higher than on PC Internet

Source: Universal McCann/AOL Study: “Smart Phone, Smart Marketing” June, 2009

Smartphone Mobile Response Rates High

Mobile coupons redeemed at rates higher than traditional or online coupons:

Source: Valassis/NCH, Cellfire, Inmar, Coupons.com, other industry sources

ValPak indicated it was seeing 25% redemption rates earlier this year

Comparing Coupon Redemption Rates

In research conducted through the holiday season with three brands 65% of consumers that opted-in to follow a brand made a purchase as a result of receiving messages based on place and time.

-- 1020 Placecast re ShopAlerts (3/10)

Conversion for Opt-in SMS Campaigns

RespondentsMobile N = 47,658Online N = 513,973

Source: InsightExpress, 2009

Mobile Display Outperforms Online

InsightExpress campaign data

Not ‘Why?’ but ‘When’ & ‘What’

• The question is not “why mobile?” but “when mobile?”

• Strategy/tactics: what’s the right approach?

• Mobile should be considered along with other campaigns

• Publishers and channels you already work with and content you generate already being distributed in mobile

• Your prospects and customers are using the mobile Internet, shouldn’t you?

“Ask your doctor, use only as directed”

Greg Sterling greg.sterling@gmail.com

Twitter.com/gsterling

Follow or Contact Me

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Questions?