Women Drive Digital Consumption

What’s inside?
Internet 1
The traditional internet 4
The new internet 15
Mobile 17
The British mobile market 19
What are people doing on them? 25
The app economy explained 34
Tablet 39
The tablet market 41
Who owns a tablet? 43
What are they doing with it? 47
Behaviours 51
Search 53
Communication 61
Socialising 65
Spending 95
Watching 111
Listening 125
Reading 133
Gaming 143
All together now 159
Conclusion 167

2

Men rule the web. Gaming’s for geeks. Women aren’t interested in tech. iTunes is the
most popular music player. Those with the most followers on Twitter have the most
influence. The iPad is mostly used on the go. Right? Wrong. Our collective
knowledge about how people live today through technology is so tangled up by
satisfying yet shallow soundbites, lazy research and the biased rhetoric of specialists,
it’s hard to know what people really do today.

How do they talk, watch, listen, read, play games, socialise, research and buy in
today’s increasingly digital world? How does this differ between the sexes and
generations? If your brand is going to connect with consumers in the digital age, you
need better answers to questions like these.

This report is the start of that. By drawing together quality research from hundreds of
different referenced sources it paints a picture of current media and technology
consumption and how that might develop in the future. It should make you more
knowledgeable. It should give you the arsenal to fight for strategies and creative
solutions that go against tired convention. But it should also flag up when you’re in
danger of jumping on a bandwagon and wasting your precious marketing budget.

In short, this report should help you unpick the truth from the myth.

4

Half the country go online every day

There are 62 million people in the UK1 and more of us are going online, and
spending more time there, every day.

By August 2011, 77% of households2 were connected (up 4 percentage
points on 2010), with 30 million going online every day or almost every day.
93% of them have broadband connections of 2Mbps or higher3, nearly a
quarter (24%) had 10Mbps or above4 and 1% clocked in above 24Mbps in
May 20105. In other words, a sizeable chunk of the country has access to the
internet and data-heavy services like advanced websites and video.

We’re internationally mediocre for coverage and speed

However, globally, that’s poor: we dawdle at 26th on broadband penetration
and speed rankings, with Bradford the unlikely and only British city to enter the
global top 100. Generally, the south and cities are much better catered for than
the north and countryside. The government knows this – and knows how
closely coupled high-speed internet is with improving the economic and social
prospects of British homes and businesses.

More internet in more places coming

To that end, UK Culture Minister Jeremy Hunt has committed to get Britain the
best superfast broadband infrastructure in Europe by the end of the current
parliament and is investing £830m against this6. If that pans out, a pretty
decent network is only going to get better, paving the way for more powerful
and rich internet experiences.

Mobile, the new kid on the block

While most of us still go online at a desk, mobile is increasingly dragging us
away. In 2009 23% went online with a phone. By 2010 it was 31%. In 2011 it
was 45%7. To restate: nearly half of all internet users are doing it on their
phones.

Nor is it the case that these people are dusting off an old WAP device and
checking their email. By 2012 46% of Brits were using a smartphone8, a

1
Office of National Statistics (ONS)
2
Office of National Statistics (ONS) as cited by eMarketer, September 2011
3
Office of National Statistics (ONS) as cited by eMarketer, September 2011
4
Trends in broadband supply and uptake http://www.scotland.gov.uk/Publications/2011/02/23091236/9
5
Ofcom, as quotes on BBC http://www.bbc.co.uk/news/technology-11922424
6
Telegraph, http://www.telegraph.co.uk/technology/broadband/8448680/Superfast-broadband-scheme-proposed-for-5-million-rural-homes.html
7
http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-226727
8
http://paidcontent.org/article/419-smartphone-penetration-approaching-tipping-point-as-pc-usage-declines-/

2

growth on the previous year so deep in double digits it’s not even worth stating
as it will be out of date in a month.

It’s likely this rate of growth will remain, or even ramp, in the coming years as
smartphones go mainstream and the infrastructure gets a makeover with a new
network, called the 4G mobile spectrum, landing in 2013.

This will offer a big improvement on the current 3G network, which is limited to
around 3.6Mbps, by allowing for speeds of up to 100Mbps out and about, or
ten times that (1Gbps) when stationary, to around 95% of the country. That
means while a one-minute YouTube video would take 30 seconds to download
on today’s mobile network, an HD feature length film would take about a tenth
of the time on 4G. In other words mobiles will no longer have to pull data
through the keyhole: the door will be wide open.

This will usher in a blazingly fast mobile experience. In this world, the majority of
the processing will happen in vast servers and all anyone’s mobile has to do is
reach up into this ‘cloud computer’ and tap into it, unconstrained by download
speeds. Phones tomorrow will do what today’s best desktops can, just quicker.

Digital Britain is established and only going to get more established, in speed,
geography and devices.

But what are people actually doing online?

3

The traditional internet
The great time vampire

We spend around 57 hours per month on computers9. Roughly half that time is
spent offline in Word and PowerPoint, organising photos, watching films and
playing games. The rest is spent online.

So central is the internet to people’s lives that a third of Brits claim they
couldn’t live without it10. In fact, collectively, we are living with it more every
day. In 2009 the average time spent online per day was 41 minutes; within a
year it had jumped 20% to 52 minutes11; by the start of 2012 it was 1 hour 12
minutes or 36 hours a month12. Mobile will drive this stat into the absurd and
we’ll soon be online more than we’re awake. It will be like saying how long an
average person has access to oxygen for in a day.

What are people doing online?

If a man were to sit down at his computer, send a few emails, hunt for some
information, research and buy some stuff, check his bank balance, pop onto
Facebook while listening to some music he downloaded, then game for a while
before discussing it on a forum and finish up the day telling a mate on Skype
how he sold something on eBay for a hefty profit, he would pretty much have
exactly summed up British online activity – in decreasing order of frequency.
Here’s a more thorough breakdown:

9
UKOM: http://www.thedrum.co.uk/news/2011/04/28/21101-overview-of-uk-online-measurement-data-for-march-2011/
10
GB TGI Net Q4 2009, December 2009
11
UKOM, December 2009
12
http://www.zdnet.co.uk/blogs/tech-tech-boom-10017860/brits-top-internet-addicts-league-in-europe-10025436/ (36 hours divided by 30 days = 1.2
hours per day. 0.2 of an hour is 12 minutes.

4

13

Although average time online and frequency is instructive in the broad sense,
it’s a ‘white rainbow’, a bland average masking the colourful nuances.

Let’s break it down, ladies first.

Women drive the digital mainstream

Globally, there are fewer women on the internet than men, but they spend more
time on it. In the UK, women have overtaken men online (51.3% vs 48.7%)14
and reflect the broader pattern of heavier usage, spending about 8% more time
online15. For UK housewives specifically, nearly half of all their leisure time is
spent online16.

Two major activities account for this.

The social sex

Globally, women spend 30% more time on social networks than men17 – a
figure that has held constant into late 2011 with European women clocking up
8.2 hours a month on social networks versus men who register at 6.318. There
are also more of them on social networks. In Europe 81% of men use social
networks, trumped by women at 86%, a pattern that holds out for all regions.
It’s also good not to forget the less sexy but fundamentally central role of email
and instant messaging, both activities where women talk men under the table
on a global scale19.

13
Digital Trends Winter UK December 2011, Mintel
14
Estimated data from http://www.emarketer.com/Reports/All/Emarketer_2000391.aspx
15
ComScore, July 2010
16
http://news.bbc.co.uk/1/hi/technology/7789494.stm
17
ComScore - http://bit.ly/9dth6f
18
http://www.comscoredatamine.com/2011/12/women-spend-more-time-social-networking-than-men-worldwide/
19

5

The shopper of the species

Globally, women spend 20% more time on retail sites than men20. Women buy
more often than men, accounting for 59% of purchases on European websites
(53% in the UK), but don’t spend as much as men when they do. While
European men spend 93.12 euros on an average web purchase, women spend
68.65 euros21. In the US, women buy more often than men too, but end up
spending more. US women make up just under half of the internet population
but generate 58% of e-commerce dollars22.

The traditional digital woman

Unsurprisingly, community, lifestyle and health sites – especially around
parenting, food and home – continue to get more ladies dropping by than
men23. British women are also nosier than their men, with 14% of wives
reading their husband’s emails and 10% checking their browsing history,
(those figures for men are 8% and 7%, respectively24.) Clearly, technology has
neither got in the way of men’s sexual proclivities nor the orbiting suspicions of
women.

Women defy digital expectations

So far we’ve seen nothing a casual bit of stereotyping wouldn’t spit out. But
there are some surprising findings which armchair bigots might not guess.

Game birds

Yes, cars, sport and a lot of high finance are still male-dominated but in
personal finance and financial advice women have the edge, both in numbers
visiting these sites and time spent on them.

In online gaming women are a level ahead too25, although only on the gentler,
casual games. Women overindex on puzzle, card, arcade, board, casino and
trivia games while the genres of action, adventure and sports are typically
favoured by young guys. Leading the charge in gaming for the girls are the over
45s who spend nearly a third more time than men their age playing26.

Add a bit of spice to the major themes mentioned – being social and spending
– and you get to some of the more surprising female pursuits online.

20
21
http://www.internetretailer.com/2011/03/28/european-women-shop-more-often-online-men-spend-more
22
23
24
http://www.networkworld.com/news/2010/052410-women-more-likely-to-snoop.html
25
26

6

Bad girls

For example, porn slides in above the already-popular health, clothing, and
family and parenting sites in overall global usage for women. Some 34% of
ladies admit to using adult sites, while for men it’s 46%27. And given the
obvious methodological problems of asking people whether they get their kicks
from commoditised, choreographed human flesh, it’s probably safe to give a
Viagra to those percentages.

Other studies show British women are especially prurient. Six out of 10 women
say they watch porn online28 and an alarmingly high 17% of women describe
themselves as “addicted”29.

Girls gamble

Gambling is pretty much a parity sport too. About 7% of adults fritter away their
cash online and women are, in fact, more likely to visit some gambling sites
than men (e.g. lotto and sweepstakes)30.

Being geeky

Maybe most surprising is that global reach across all ages for technology sites
doesn’t vary that much between the sexes, although men spend more time
there. Women may be geekier for less time but they’re still being geeky31.

Watching less

When it comes to online video, although reach is the same as men, women
watch a lot less video, especially in the UK. Men spend nearly 20 hours a
month watching, women barely reach 10 hours32. One clue to what’s going on
here might be from the fact that women watch a lot more YouTube than men,
as a share of their overall viewing. So while men are filling up on a fulsome
show or film length video, women are snacking from YouTube.

Searching less

Women also search less than men33. One theory to explain this is that while
men might be employing more of a direct, hunter-style strike to pin down

27
28
http://www.guardian.co.uk/culture/2011/apr/07/women-addicted-internet-pornography
29
http://www.internet-filter-review.toptenreviews.com/internet-pornography-statistics-pg6.html
30
31
32
33

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information, women are using their 30% more time on social networks than
men34 to shortcut the searching process by asking friends first.

Dolls and dollars

With the exception of mobile (see later section), women are the backbone of
the internet: buying, chatting and playing, in innocent and not-so-innocent
ways. To brands, the cleavage between social and spending should be
attracting a lot of attention – therein lies enormous opportunity.

Digital blokes

Porn, tech and sport; that’s all that needs to be said about men online, isn’t it?
Not quite. The picture is a little more nuanced. If women are nurturers – putting
more time into maintaining social networks, searching less and getting
information from their friends – men are the information and entertainment
hunters.

Information, information, information

Finding, storing and writing information. That’s what the men like to do. Men
search more than women (71.6 searches per searcher per month for men vs
64 for women, US base35). When interacting with brands in social media, 36%
of men claim information is their primary goal, while for women it’s 28%36.
They’re also more likely to make use of browser bookmarking than to search
again37. And finally, it’s the men making Wikipedia. Barely 13% of Wikipedia’s
contributors are women38.

Watching, learning, listening

In terms of entertainment, the most popular activities for British men online are
watching video (51% vs 42% of women), visiting chat rooms/message
boards/forums (32% vs 24% of women), listening to internet radio (again, 32%
vs 24% of women), listening to downloaded music (31% vs 22% of women)
and downloading and playing games (14% vs 6% of women).

The chat room/message board/forum point is interesting: although women
spend more time in social media overall, men outnumber them on this specific
sector of social media, arguably because boards like this allow men to be much
more specific in their information gathering.

34
35
36
Empathetica, http://chiefmarketer.com/social/metrics/gender-difference-retail-social-media-011211/?cid=nl_cm_direct
37
Lightspeed Research 2009 http://www.iabuk.net/en/1/mensactivitiesonline.html
38
http://www.nytimes.com/2011/01/31/business/media/31link.html?_r=3&hp=&adxnnl=1&adxnnlx=1296491313-Gb/z5Xc+t9PSsze7krGSRg

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Sport, cars and tech

Around 40% of the global online male population read about sport online39,40,
with women not far behind at around 35%. However, men are considerably
more engaged spending nearly twice as much time on these sites41.

When it comes to cars it’s a similar but less marked story: between 25% and
35% of the online male population visit automotive sites (increasing with age)
while women clock in between 20% to 30% and spent about 75% of the time
men do on these sites42.

Technology is different. Apart from a small male lead in reach at the younger
ages, around 55-60% of the sexes go to technology websites, with women
only spending about 10% less time there43. The common assumption that tech
is for the boys is just not supported by the data.

Male preference for e-tail but overall still prefer a real shop

35% of men prefer “e-tail” to real shops compared to 29% of women44. That’s
interesting because, although there is a slight male preference, most people
prefer going to real shops. There are obvious reasons for this: you can touch
and try in real shops – and they’re a richer experience. Nevertheless, this
preference suggests interesting user experiences that bridge the on- and
offline worlds for both sexes.

What are they buying most?

Men may prefer to use online shopping more than women but they fall short of
women on nearly all types of online shopping, only overindexing slightly on
insurance and flights (they clearly like to get their oar in on the serious
purchases) and, surprisingly, aligning on tech. A list of the most popular major
online male purchases looks like this45:

 37% buy CDs or DVDs (women, 40%)
 32% go to eBay (women, 41%)
 28% get clothing and footwear (women, 45%)
 30% buy books (women, 40%)
 22% kit up on toys and games (women, 28%)
 20% get insurance (women, 17%)
39
ESPN 2009. Accessed from: http://www.iabuk.net/en/1/toptipsfortargettingmenonline.html in 2011; now no longer online
40
http://www.marketingcharts.com/direct/women-encroach-on-male-sites-13840/comscore-online-women-sports-sites-august-2010jpg/
41
ESPN 2009 Accessed from: http://www.iabuk.net/en/1/toptipsfortargettingmenonline.html in 2011; now no longer online
42
42
43
43
44
http://oxygen.mintel.com/sinatra/oxygen/search_results/show&&type=NSItem&class=News&sort=recent&display=abridged&page=1/display/id=574641
&anchor=574641
45
Digital Trends UK, Spring, Mintel

9

 20% book flights (women, 19%)
 19% buy tickets for entertainment, like gigs and theatre (women, 21%)
 17% buy music (women, 19%)
 18% buy gifts like flowers or confectionary (women, 26%)
 16% buy gadgets (women, 16% too)
 15% buy food online (women, 24%)

What are they buying least?

 13% get cosmetics and perfumes (women, 27%)
 13% purchase software (women, 10%)
 10% book holidays (women, 10% too)
 10% buy DIY and garden products (women, 9%)
 9% buy computer hardware (women, 5%)
 8% get home furnishings (women, 13%)
 8% buy mobiles (women, 8% too)
 5% purchase healthcare products (women, 10%)46

The connected child

For most of today’s children the internet is like air: it’s just there and always has
been. It’s also everywhere: in the bedroom, in school, in their hands and even in
their games console. However, there’s still a wealth gap that needs to be
closed before all children have internet access.

Most online, most gaming

Over 90% of children have internet access at home and the majority also use
the internet at school47. The average 7 to 10-year-old now spends around 8
hours a week online, climbing to 18 hours a week for 11-14s and 24 hours a
week for those aged 15-1948. To repeat: teens are spending nearly half the
time most people spend working per week just being online. What are they
doing? As much as 70% claim that gaming is their most common online
activity49, equating to 5 million regular young gamers.

Poor kids left behind

While the breadth and depth of the internet for Britain’s young is astonishing,
there is a sorry shortfall among the poor. In the richest 10% of homes, 97%
had an internet connection whereas in the poorest 10% of homes only 30%
were connected50. The fear is that the technology gap is also breeding an
46
47
Youth TGI as cited by MediaTel, November 2010
48
49
Survey commissioned by Disney as cited in "Next generation Media", Intelligence, Aegis Media, January 2010
50
http://www.guardian.co.uk/technology/2010/dec/28/uk-children-home-computer-access

10

attainment gap not just in computer literacy but also in all the attendant benefits
being connected brings.

Growing up smart

Children are being brought up bathed in bits. Nearly half (41%) of 12 to 15-
year-olds have internet in their bedrooms, a leap of 31% in growth from 2009.
Interestingly, nearly a quarter (23%) are going online via a games console. The
phrase ‘digital natives’ isn’t too far off.

It’s perhaps time to give the phrase a younger cousin: the ‘smartphone native’.
Around 18% of 5 to 15-year-olds own a smartphone and 16% go online via a
games console51. Among 12 to 15-year-olds this rises to 35% owning a
smartphone52.

To give that its context, smartphone penetration in the UK is estimated to be
around 45% in 2012. In other words, the kids aren’t far behind before they’ve
even done their GCSEs.

Deep digital

And digital life is much more of their life. Rather heart-wrenchingly, 45% said
they were sometimes happier online than in their real lives53 and, while this
could be that they just have more fun playing games online than sitting
uninspired in a classroom or being told to finish their plates, it does point to the
depth of relationship the coming generation has with the internet.

So strong is this relationship that among children aged 12-15, television is no
longer the media most would miss were it to be taken away. Instead 26% now
say they’d most miss their mobile, while 24% say the internet54. Half of children
say they would be ‘sad’ and 10% saying they’d be ‘lonely’ if they didn’t have an
internet connection55.

What’s interesting is that there are only a few percentage points in it: television
still holds a very strong appeal. Anyone saying TV’s dead for the younger
generations shouldn’t.

And we should be careful about following this fact into the future. Actual
television viewing might decrease and the kids might say they’ll miss it less if
it’s taken away but the amount of television content watched probably won’t

51
http://consumers.ofcom.org.uk/2011/04/half-of-parents-know-less-about-the-internet-than-their-children/
52
53
http://www.kidscape.org.uk/events/saferinternetday2011.asp
54
55
http://www.telegraph.co.uk/technology/news/9045134/British-children-feel-sad-without-internet-connection.html

11

change; it will just be seen on different devices. It’s the word television that’s
going to go out of fashion, not the shows on it.

Social from the start

Over half (54%) of children aged 8-15 who use the internet at home have a
social networking profile56. As for Facebook, 44% of 8 to 13-year-olds are on it
and 66% of six-year-olds are aware of it57. A quarter of children with a
smartphone say that they regularly visit social networks on their phone58.

Silver surfers

Catching up

Internet users over 65 are a relatively small group, accounting for only 6.1% of
the UK online audience in March 201159. That said, they’re the fastest growing
age bracket. In 2010 in the UK around 35% of over 65s had broadband60.

The poor

A bit behind

If you breakdown the internet population by socio-economic group there is a
robust pattern: poorer people have poorer internet penetration.

56
57
http://www.thedrum.co.uk/news/2012/02/07/survey-find-larger-percentage-uk-children-using-facebook-us
58
59
UKOM: http://www.thedrum.co.uk/news/2011/04/28/21101-overview-of-uk-online-measurement-data-for-march-2011/
60
GB TGI Kantar Media UK Ltd Q1 2005-2011 (Oct – Sept) Mintel

12

61

The good news is that the less affluent are catching up fast at 13.4% since
200962, a slowing down on the previous rate most readily explained by the
recession and increased vigilance over discretionary spend.

Interaction with advertising

Click deflation

Between 2004 and 2009 click-through rates on online adverts fell
precipitously to 0.07%. Now, only one ad in 1500 is clicked63,64. The decline is
charted below:

65
.

61
Researching Purchases Online – UK April 2011, Mintel
62
Kantar as cited by MediaTel, June 2010
63
Forrester and DoubleClick, cited here https://docs.google.com/present/view?id=d5sr9zx_1625hdsh9gfj&pli=1
64
Mad Men are watching you http://www.economist.com/node/18651104

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Retargeting

However, all is not lost in online advertising. Have you ever seen an ad online
that reminds you of something you were doing a few days ago on a site? That’s
because when you went to that site it dropped something called a cookie onto
your machine. That cookie was just a record of what you looked at. The ad you
got served was uncannily related to the stuff you were looking at because your
computer is telling it what you were looking at. This is retargeting and it is
enjoying triple the normal click-through rate of online ads at about 0.22%66.
However, there is an even more effective type of online advertising.

Contextual targeting

Ever been on a site and seen an ad that seems to be on exactly the same
subject as the page you’re on? This is contextual targeting and is six times
more effective than the industry average, enjoying 0.45% click-through rates67.
And contextual targeting is cheaper. In fact, you get five times the clicks as
retargeting at around half the price68.

Summary

In short, the internet is getting wider, flatter and deeper. More people are
getting it. The demographic differences are being ironed out. And we’re
spending more time on it from childhood right through to old age. That said,
there are important differences in usage, from women’s social and spending
habits to men’s information and entertainment addiction to children’s increasing
internet and mobile immersion. The way people interact with advertising is
changing too: we are no longer as interested in the general, the personalised
and contextual grab us – a lesson many brands simply don’t yet know.

65
66
67
68

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The new internet
2011 was an important year for technology. A critical inflection point was
reached: the number of mobile and tablet devices shipped exceeded the
number of PCs shipped69,70.

We are moving into a post-PC era. There’s still going to be a role for the trusty
desktop powerhouse but increasingly we will be accessing the internet through
new devices.

The fresh faces and the app economy

Most immediately there are two devices for this: the smartphone and the tablet,
both of which Apple has pioneered to mass success71.

In many ways this has created a new internet, both in the alterations needed to
view existing sites on these devices and in the arrival of the app, a software
program for mobile devices fusing internet functionality with all the tricks
powerful phones have up their sleeves.

We will look at mobiles, tablets and apps in more detail in later sections.

What’s on the horizon?

But there is also increasing connectivity elsewhere. The next technology
battleground will be in TV. 350 million internet-enabled ones are expected to
be sold worldwide by 201572. Expect serious disruption, mostly likely brokered
by Apple.

Shows will change as the internet invades them and they outsource elements
to it. Ads and product placement will become interactive. Gaming is the best
place to look for an indication of what’s to come, as even back in 2009 video
game consoles accounted for 52% of living room kit with broadband73.

But the real fun begins when all these devices talk to each other in interesting
ways. Mobile, tablet, TV and traditional PC-like devices will all work together in
the future, pulling shows, music, work, games and so on from the ‘cloud’74 on

69
http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011
70
http://www.engadget.com/2012/02/03/canalys-more-smartphones-than-pcs-shipped-in-2011/
71
This is not to say Apple invented these devices. They didn’t. However, they did create the markets which saw them become popular and competitors
ape them.
72
Parks Associates, January 2011
73
Worldwide data, http://www.isuppli.com/Home-and-Consumer-Electronics/News/Pages/Xbox-360-PS3-Vie-to-Win-Digital-Connected-Home-
Battle.aspx
74
As a reminder, the cloud refers to the collective processing and storage power available on the internet and which less powerful and storage-rich
devices, like mobiles, can tap into.

15

the internet. And it will go the other way too: interactivity will flourish.
Visionaries will create entirely new engines for storytelling that combine all this
in ways that are hard to imagine now.

Beyond that, new devices will be brought into the digital world. Nike has
already shown the promise of this with Nike+, a chip that goes in runners’
shoes and communicates information like speed and distance to their iPod, and
Nike FuelBand, a wristband that captures your activity throughout the day.

Currently there are 35 billion devices that connect to the internet. It’s a lot but
it’s just the start. It’s entirely plausible – and likely – that our heating, water,
fridges, bikes and so on will connect up.

Let’s start with mobile.

16

Mobile
Mobiles are cementing themselves further into our lives. We use them more
often and for more things. Most people in Britain do not have a smartphone.
Yet. Within a year they will be mass. Never has the mobile market seen so
much upheaval. Catalysed by bounds in hardware power and miniaturisation,
new phones can now run a vast array of programs, called apps, creating a
huge new virtual economy and a dizzying range of new tools for living. In
Apple’s pioneering wake, others follow, most notably Google whose mobile
operating system looks set to become the winner by share but not quality of
experience. For brands the opportunities are staggering, as mobiles become a
magical bridge between customers and companies.

18

The British mobile market
The noble traditional mobile

Ubiquitous except in certain pockets

Mobile penetration in the UK has been above 100% since 200475 because
many people owned more than one. However, splitting apart demographics to
reveal true ownership shows that the young and old still underindex. For
example 40% of 7 to 10-year-olds own their own phone. This rises to 90% for
11 to 14-year-olds76 and 97% for 16 to 19-year-olds which holds steady until
50 to 59-years-old when it dips back to 90% and then dips to 60% for 60+-
year-olds77.

An increasingly fundamental role

What’s interesting is not just penetration but personal importance. For example,
33% of 12 to 24-year-olds in the UK, US, Germany, India and Japan are
contactable at all times, even in their sleep78. And, as mentioned already, for
children aged 12-15, television is no longer the media most would miss were it
to be taken away. Instead 26% say they’d most miss their mobile79. It may be
slight at the moment but it’s an indicative trend.

A fundamentally increasing role

And traditional mobile phone usage isn’t slowing down either: 1.4 billion text
and 10 million picture and video messages are sent every week in the UK, up
30% since 200980. Of course, this doesn’t speak to the huge number of new
uses on offer from the latest breed of advanced phones, the smartphone.

75
Guardian http://www.guardian.co.uk/business/2010/jan/01/25-years-phones-transform-communication
76
77
http://www.csu.nisra.gov.uk/Mobile_phone_ownership_by_sex_and_age_Trend.htm
78
OTX Research, March 2009
79
80
The Mobile Data Association

19

Slick smartphones

Extreme ramping

The worldwide smartphone market leapt 61% in 2011 from the previous year.
61%. In total 491.4 million units were shipped, against the 304.7 million units
moved in 201081.

This is mirrored in the data demands the networks are feeling. In 2010 global
mobile data consumption was 2,844 petabytes. By the end of 2011 it had
doubled to 7,164 petabytes82. That’s enough to fill about 240 million iPods83.

In 2011 in the UK 27% of adults (13 million) owned a smartphone84, which
represents a rocketing of 70% since 200985. If you cut this by the number of
people online, smartphone ownership is more like 54%86.

A coming mass market

The conditions are perfect for even more accelerated growth. For a start
networks are hawking smartphones hard, as they are key to their own growth.
Second, the selection is no longer limited to a range of premium devices,
opening up the juicy middle of the market. And third, there is voracious demand
for new functionality beyond just voice.

Combine this with an extrapolation of the current growth rate and smartphones
are a hard technology to ignore. It’s estimated they will account for 65% of all
phones in Europe by the end of in 2011, 77% by 2012 and 82% by 201387.
We’re looking at a technology that will be mass very shortly.

Who’s got all the mobile internet?

As you might expect, mobile internet declines gracefully as you approach old
age and is used just a touch more by the men, as befits traditional technology
adoption. Let’s look at it in detail:

81
http://trak.in/tags/business/2012/02/08/smartphone-market-share-2011-12/
82
http://www.ispreview.co.uk/story/2012/02/14/cisco-vni-report-shows-huge-surge-in-mobile-broadband-data-traffic-during-2011.html
83
32Gb version
84
Note that 45% have gone online in 2011 with a mobile, the difference is that the remaining 18% aren’t using a smartphone
85
Comscore as cited by Cellular News, March 2010
86
Comscore as cited by Cellular News, March 2010
87
Carphone Warehouse/Gartner, February 2010

20

88

Kids already ahead

By some sources, children are already overindexing on smartphone ownership
versus the rest of the population. Many have better phones than the average
punter. 18% of 5 to 15-year-olds own a smartphone, while among 12 to 15-
year-olds this rises to 35% owning a smartphone89. In a broader sense, the
young are heavy mobile internet users: 40% of 16 to 34-year-olds go on the
internet through their phone at least once at day90.

Here come the girls

Women haven’t cornered smartphones yet, as they have with the social and
spending corners of the internet. In Europe the skew is 63:37% in men’s
favour. This is probably due to a mix of factors: men adopting earlier, having
more phones paid for by employees who see benefits to advanced functionality
and greater male earning power.

The good news is that the balance is being redressed, with women strutting
from 18% penetration in 2010 to 39% in 201191.

The mummy effect

Interestingly this adoption may be in part driven by motherhood. In a US study
of 5,000 mums over half (53%) said they purchased their smartphone as a
direct result having a child. Having a baby brings with it a flurry of feature

88
89
90
91
http://www.ons.gov.uk/ons/dcp171778_227158.pdf

21

reprioritisation. The camera becomes even more important than the address
book and text messaging, jumping to the most important feature for stills and
second most important feature for movies. Apps, which were never a factor
before motherhood, jump to number three on the list of top functions. Nearly a
quarter of the apps they have are for their children92, for example games,
language learning and interactive children’s story93.

Who’s using what?

Beware of the industry

As people who work in marketing, we should be very aware that our phones
are not reflective of the population as a whole. For instance, iPhone makes up
around 9% of all UK phones while 30% still use Nokia94.

Who’s winning the smartphone wars?

Android is Ford

Android is the fastest growing mobile operating system in the world95, ramping
exponentially to 300 million handsets globally by February 201296, giving it a
global share of 52%97. In the UK it accounts for 34% of smartphones98. Right
now, 700,000 Android devices are being activated every day globally99. Not to
miss the chance for a comparison involving Wales, that’s the equivalent to
double all the people in Cardiff switching to Android every day. Phenomenal.
The exponential rate of growth can be seen in the chart below:

100

92
http://www.babycenter.com/100_press-release-mobile-mom_10349212.bc
93
Accessed from: http://www.apple.com/uk/iphone/apps-for-everything/momsdads.html in 2001; now no longer online
94
Comscore, as shown on http://txt4ever.wordpress.com/2011/06/16/uk-smartphone-demographics-analysed/
95
http://www.guardian.co.uk/technology/blog/2011/feb/16/google-eric-schmidt-mobile-world-congress-speech
96
https://plus.google.com/u/0/112599748506977857728/posts/Btey7rJBaLF
97
http://www.pcmag.com/article2/0,2817,2396404,00.asp
98
Mintel Digital Trends Winter 2011
99
http://techcrunch.com/2011/12/22/android-700000/
100
http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011

22

Apple is BMW

While Apple’s iPhone paved – and will probably continue to pave – the way, its
market share gains are slowing down101. It’s useful to think about Apple like the
BMW of the smartphone market, while Android is the Ford: Android’s looks set
to be the affordable mass market smartphone whereas Apple will secure a
smaller share with higher priced102, more stylish products on which they make
deliriously lush margins (Apple sells 4.2% of all mobile phones, but makes 52%
of all profits103.) One upshot of this is that wealthier consumers are on the end
of Apple devices for brands.

Bye bye Symbian

Symbian, the platform that sits under Nokia phones, will likely die. By 2015 its
estimated global market share will be a woeful 0.1%. Nokia and Microsoft’s
recent alliance to develop hardware and software respectively is their way of
addressing the brutalisation of their share by the two Californian behemoths.
Estimates for Microsoft’s mobile OS share settled at around 11% for 2012, at
the end of 2011 they were less than 2%104.

Strong BlackBerry

And finally there’s BlackBerry, which has strong mobile and tablet propositions
but a much less well-developed app store. In the UK they have a 27.7% share
(8.5 million people)105.

Current and projected global share of the mobile operating system market
looks like this:

101
http://www.strategyanalytics.com/
102
Apple's share of the mobile phone industry profits is nearly 60%, http://www.macrumors.com/2011/05/17/apples-share-of-mobile-phone-industry-
profits-pushes-toward-60/
103
http://www.forbes.com/sites/afontevecchia/2011/11/04/apple-took-52-of-smartphone-profits-on-4-2-market-share-in-q3-stock-to-hit-560/
104
http://www.macworld.co.uk/apple-business/news/?newsid=3333519
105
http://www.telegraph.co.uk/technology/blackberry/9050236/BlackBerry-UKs-No-1-smartphone.html

23

106

106
http://www.gartner.com/it/page.jsp?id=1622614

24

What are people doing on them?
Smartphone usage by activity

The average smartphone owner uses the actual phone only about 40% of the
time. The rest of the time is spent on new activities like internet, games, music,
email and navigation107.

In the UK, smartphone owners self-report to doing the following activities:
surfing the internet (80%), using social media (62%), watching TV/video clips
(28%) and making purchases (21%)108.

Let’s look at these in a little more detail.

Still searching

“Search [on phones] is not where it’s at” said Steve Jobs, Apple’s late boss, in
2010. Ever the salesman, he was putting forward a case for apps on mobiles
as a way of getting stuff done rather than search. Steve was wrong on this one.

Google own mobile search

Mobile search engine traffic has seen an increase of 247% in the past year109,
comparable to the early days of desktop search in Google’s history. Yet
Google’s formidable monopoly is even more pronounced in the mobile search

107
Mary Meeker Report, April 2010
108
KPMG as cited by eMarketer , December 2010
109
Digital Strategy Consulting, October 2010

25

market: it serves 98.29% of mobile search queries globally, followed by Yahoo
with 0.81%, Bing 0.46%, other sites who squabble over the remaining 0.46%
of the crumbs110.

Mobile search is different

Search on mobile is not like search on a PC. Smaller screens force a smaller
selection meaning it’s even more important brands stand out in search or even
before the search is made. For example, mobile searchers simply don’t drill
past page one111. If you don’t feature in the right places for the right searches,
you don’t exist. Mobile search engine optimisation (SEO) will become its own
very important subfield.

Searching for the brand

However, given that searchers on mobile are twice as likely to search for a
brand name as when searching from the desktop it would be ideal for a brand
to be in someone’s head before a search is made. This means good old
fashioned branding is arguably more important than ever. Expect to see
‘Increased mobile searches for brand name’ popping up in big brand building
TV ad effectiveness models soon.

Android owners doing more browsing than Apple

There are also some interesting differences within mobile users. Androiders
browse more on their phones than Applers112. The reason? One, the apps are
better on an Apple device, obviating a lot of browsing. Two, Android users are
probably more techy. And three, there is a large search box on most Android
phones, shortcutting straight to search. There’s a device bias to browse.

Websites

The website still central

A bit of eavesdropping on certain quarters of the internet and you’d be fooled
into thinking you’re non-existent if you don’t have an app for people to interact
with you on mobile. Not true. Websites still play an enormous role. The average
smartphone user will visit up to 24 of them per day113.

110
Stat Counter as cited by Pingdom.com, July 2010
111
ComScore, September 2010
112
Mary Meeker Report, April 2010
113
http://www.mobiadnews.com/?p=5133

26

But poor experiences common

The vast majority of these are traditional websites, not mobile-specific ones.
That doesn’t express a preference at all, just the status quo. And it’s a bad
status quo. People expect a faultless experience regardless of the channel and
what they’re getting on mobile is very different. 83% of people experienced
problems trying to buy something through a site on a mobile114. To brands the
green light of opportunity should be going off to out-experience the
competition.

Apps

Wired, a technology magazine, announced at the end of 2010 that ‘The Web Is
Dead. Long Live the Internet‘115. Their conceit was that there’s more to the
internet than web pages on computers: there are apps.

At the same time Fast Company, a business magazine, ran an article which
argued the economics of apps aren’t sustainable, users don’t even use them
that much and there are so many now it’s easier to head elsewhere, the
browser and search.

Who is right? As a brand investing money in creating an app or updating a site
to be mobile friendly this is a vital question. Let’s first untangle the different
articles.

The web is not dead, and neither are apps

For one, the web isn’t dead. It’s still growing exponentially. Wired’s graph
showing web traffic dwindling is deceptive for reasons we’ll footnote116. And as
for the Fast Company, apps are economically viable, they were just looking at it
wrong (again something we’ll footnote117), frequency isn’t always the right way
to measure success (you wouldn’t measure the usefulness of a bike pump by
the number of times you used it) and yes, they’re hard to find sometimes, but
that is simply innovation getting ahead of organisation.

114
The Wireless Federation, April 2011, http://wirelessfederation.com/news/68217-10-million-adults-use-m-commerce-uk/
115
http://www.wired.com/magazine/2010/08/ff_webrip/all/1
116
The vertical axis is relative, not absolute, cunningly smoothing out the web’s actual exponential growth. Next is that their chosen unit is bandwidth; of
course video badwidth has got bigger, quality is improving all the time. Time spent would be a more useful indication of behaviour. And finally they
clumsily split things that cannot be split: for example, iPlayer and YouTube are both web and video
117
They cite a study that calculates average app revenue. Averages are only useful when data are spread equally. Some people have got very rich from
making apps, other’s have made a loss. On average, the amount is positive but low. Nevertheless, developers are irrational and will continue to chase
that big win (even though statistically they are very unlikely to achieve it.) Apps will continue to be made. Fame is a useful analogy: the average celeb
income is probably something like £20,000 and a fame level close to zero. In reality there are a load of very handsomely paid celebs but an invisible
hoard who never made it or are trying to still waiting tables. Average it all out and you get poor numbers, but people still try and chase the dream.

27

To app or not to app?

So there’s some poor/sneaky presentation of data – bad Wired – and some
oversimplifications – naughty Fast Company. Our view: as mobile internet is
only going to get bigger, brands should have a reasoned presence there. But
fretting over whether to do an app or to create a mobile site is unnecessary:
both serve different needs and only good judgement can inform which to go
with, if it even needs to be a mutually exclusive choice.

For example, mobile sites are accessible by search, on the brand’s own terms
(not subject to Apple’s firewalls), have a higher reach and are cheaper to build,
making them better for occasional transaction or information gathering.

Apps on the other hand offer a smoother experience using the phone’s full
functionalities making them perfect for providing branded utility and
entertainment that is likely more than a one-time thing for people.

Location, location, location

40% of Google Maps usage is now from mobiles. Over New Year’s Day 2011,
mobile usage of Maps surpassed the desktop – a first for Google products118.
Although this could represent low information needs and high navigation needs
for this particular time (you’re not interested in the news, you’re interested in
getting back from the in-laws’) it’s still instructive to see the importance of
location to the mobile experience. In fact, 26% of people regularly use the
maps on their phone; this rises to 63% for iPhone users119. For brands this
means getting basics like appearing on Google Places right through to
sprucing up their mobile search strategy, to tap into local search phrases as
well as taking advantage of Google’s Mobile AdWords which can target a
specified radius around a place with an ad.

Watching on the go

Increasingly TV isn’t watched on a TV

A third of British television viewers now watch shows on their computer and
mobile. Globally, around 11% watch video on their mobiles120, in the UK that’s
an audience of 2.7 million, growing at a rate of 75%121.

118
Marissa Mayer of Google, speaking at SXSW, reported here http://techcrunch.com/2011/03/11/marissa-mayer-40-of-google-maps-usage-is-mobile-
and-there-are-150-million-mobile-users/
119
http://econsultancy.com/uk/blog/7645-ten-ways-brands-can-use-location-based-marketing
120
http://blog.nielsen.com/nielsenwire/global/report-how-we-watch-the-global-state-of-video-consumption/
121
ComScore via http://www.iabuk.net/en/1/mobilevideoconsumptionup75percent300910.mxs

28

Increasingly what is watched isn’t TV

13% of the videos watched via a mobile globally are from YouTube where until
recently TV shows didn’t exist122. In January 2011, YouTube delivered 200
million views a day through mobile, a tripling on the previous year123. By the
end of 2011, it was 400 million views124.

Although iTunes technically caters for more than phones and mostly to Apple
products, it’s useful to see the scale of downloads. At the end of 2010, iTunes
had delivered 450 million TV episodes and over 100 million movies to iPod,
iPhones and iPads125. That’s not including video podcasts either, which will
make up a good segment.

A shopper’s best friend

Touch and go

Commerce and mobile are knocking into each other in ever more interesting
ways. At the most basic level phones can be used as intelligence gathering
devices when ‘in the field’.

In 2011, 95% of smartphone users had looked up local information, 88% had
taken action off the back of this search within a day; for example, 77%
contacted a business, with 61% calling and 59% visiting126.

10% of people had used their phone to access a review, voucher or price
comparison site, with 9% of people actually downloading an app to visit again.
A further 17% said this would be something they would like to do if only they
knew how127.

Barcode democracy

A number of services that allow an item’s barcode to be scanned while in the
shop are shortcutting the process of painstakingly typing something in. This
allows for real-time price comparison and is offered by well-known retailers
such as Tesco and Amazon.

More recently, SearchReviews, a consumer review aggregator, has introduced
a mobile app for both Apple and Android handsets through which consumers
can scan a barcode and obtain online reviews relevant to the product.
122
YouTube now has an area called Shows which has syndicated network content, most notably and widely from Channel 4, whose back catalogue is
largely uploaded to the site.
123
YouTube blog, http://youtube-global.blogspot.com/2011/01/music-videos-now-on-youtube-app-for.html
124
http://articles.businessinsider.com/2011-12-01/tech/30462152_1_total-views-youtube-android-phones
125
Apple, September 2010
126
US basehttp://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html
127

29

At the moment this is the preserve of the young, as older shoppers haven’t got
around to figuring out their phone’s capabilities yet and struggle with the small
screens.

Buying on the go

The next level up is to use the phone to buy something, a feat 21% of UK
smartphone owners have claimed to do128. However, this figure is likely skewed
by purchases of apps. Another study showed 8% bought something using their
phone in 2011129. Each month in the UK, 4.2 million consumers are visiting
retailers’ websites using their mobiles130 accounting for 3.3% of all e-
commerce131. As we saw earlier many are dissatisfied with their mobile web
experiences132. This, coupled with the clear level of demand for information
delivered in this fashion, should galvanise brands into developing world-class
mobile experiences – now.

Goodbye wallet

Benjamin Vigier is an expert in near-field communications (NFC), a short-range
wireless technology that lets two objects talk to one another. Applications
include contactless payment for goods.

Why is the relevant? Because Apple hired Vigier towards the end of 2010133
and, given the company’s record in defining the tech agenda, it indicates that
soon we may see smartphones replacing cards and cash134.

Some brands are already mobilising. McDonalds, for instance, is in the process
of kitting out its 1,200 UK branches with proximity payment cards which will
allow payment through a simple wave of the card – or NFC-enabled phone –
near the till.

Barclaycard, Orange and Samsung are there together too, having launched
Quick Tap, a contactless payment system based on Samsung Tocco mobile
phones.

128
KPMG as cited by eMarketer , December 2010
129
http://econsultancy.com/uk/blog/8226-mobile-commerce-in-the-uk-stats-round-up
130
GSMA & ComScore, August 2010
131
http://econsultancy.com/uk/blog/8226-mobile-commerce-in-the-uk-stats-round-up
132
The Wireless Federation, April 2011, http://wirelessfederation.com/news/68217-10-million-adults-use-m-commerce-uk/
133
http://www.fastcompany.com/1682180/apple-nfc-expert-vigier-iphone-wireless-payments
134
If this is the case Apple will likely take a share of every transaction (although not as aggressively as it does with the 30% on apps, see section
below). Given the penetration and growth of Apple’s mobile offering this could open a vast new revenue stream for the company.

30

An advertiser’s best friend

Retail mobile search ramping

Total mobile search quadrupled in 2011 (vs 2010) according to Google and
within that mobile retail search traffic soared by 181%. Mobile searches now
account for 11% of total retail searches135.

Advertising drives mobile search

The interaction between advertising and mobile phones is clearly established
but applied rarely. 71% search on their phones as a direct result of exposure
from traditional media (68%), online ads (18%) or mobile ads (27%) (US
base)136. Yet there is little to encourage people to do this as customer journeys
are currently woefully siloed to specific media, even though this does not
reflect the realities of media use.

Advertising drives leads and purchases

Eight in 10 notice a mobile ad, while one in three notice a mobile search ad137.
Incredibly half of those who see an ad on a mobile take action, like visiting a
website (35%), making a purchase (49%) or recommending a brand or
product to others (24%)138.

And those ads with the highest click-through rate are those that blend with the
phone’s functionality best. For example, Google mobile ads with the ‘click to
call’ feature, which makes a number immediately callable, have a 6-8% higher
click-through rate than those without this feature139.

Closing the gap to purchase

One can imagine how further retail functionality could be pulled through the
keyhole (e.g. clothes size, table reservation or even purchase) making it easier
for people and beneficial to the retailer.

Touching others

A quarter of British mobile phone users in the UK use their handsets to access
social networking sites and blogs140. But it’s the rate of growth that’s
astounding: in March 2010, 4.4 million people accessed social media sites or

135
For that quarter, http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1066923/google-brc-figures-show-explosion-mobile-retail-
search/
136
http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html
137
138
US base, http://googlemobileads.blogspot.com/2011/04/smartphone-user-study-shows-mobile.html
139 http://gigaom.com/2010/12/21/googles-click-to-call-boosts-mobile-revenues
140
ComScore MobiLens, July 2010

31

blogs through their mobile phone almost every day. A year later, it increased by
80% to 7.9 million mobile users accessing social media almost every day141.

As the pre-eminent Western social network, Facebook leads the way on
numbers for its mobile platform. There are more than 425 million active users
currently accessing Facebook through mobile devices and they are twice as
active as non-mobile users142,143. It’s been estimated that a third of all items
posted to the network are from mobile144. For Twitter it’s higher: 40% of the
content comes from mobile, up from 20% 2010145.

Where and when are they using it?

Mobile internet traffic starts with sunrise at around 5am, grows rapidly and
reaches a peak at 4.30pm146. The top occasions can be seen in the following
chart:

147

It’s not just when we use it but where that’s interesting too. 35% of people fire
up apps before they’ve even got out of bed148, 39% use it in the loo, 33%
while watching TV, 22% while reading the newspaper149 and 70% while

141
comScore Media Metrix, 9th May 2011, http://www.comscoredatamine.com/2011/05/mobile-social-media-usage-up-80-percent-in-the-uk/
142
http://www.facebook.com/press/info.php?statistics
143
https://developers.facebook.com/blog/post/2012/02/24/growing-mobile-apps-and-games-with-facebook-platform/
144
http://danzarrella.com/new-data-on-mobile-facebook-posting.html#
145
http://mashable.com/2011/01/07/40-of-all-tweets-come-from-mobile/
146
http://www.mobiadnews.com/?p=5133
147
http://mashable.com/2011/05/12/smartphone-apps-bed/
148
http://mashable.com/2011/05/12/smartphone-apps-bed/
149

32

shopping150. The last three stats there show how widespread media ‘stacking’
is. Yet, consumer journeys through advertising take no advantage of this fact.

Sex and age differences in mobile usage

Across Europe there are a number of differences that emerge when you
examine sex and age. For example, on the chart below the higher the bubble
the more likely girls are to do it.

The further right you get the more likely it’s an older person’s activity. So, young
women aren’t using apps that much but they’re doing a lot of social networking.

Figure 1 comScore MobiLens; demographics of mobile activities for EU5 (FR, UK, GR, SP, IT), March 2010

150

33

The app economy explained
What are apps?

Software on a mobile

An app is simply a program running on a phone, just like a program you’d run
on a desktop. Instead of taking it from a disc, like you would a PC program, you
can download it directly from an app store, essentially a website hosting the
apps.

Limited but liberated

However, because of phones’ physical limitations – screen size, graphics
processing, download limits – an app is much more focused in functionality.
That said it also has access to a lot more functionality, like where the phone is,
what angle it’s at or what it’s picking up through the camera, ushering in a
wave of innovation. In the future, phones may be able to read our gestures151
and even facial expressions152.

Outsourcing innovation

One of Apple’s moments of genius in marketing the app, was giving the option
to anyone with an idea and the inclination and ability to create their own app
and list it in the app store, subject to Apple’s fierce approval process. Now
anyone – a multinational brand or teenager in his room – can make an app. And
they have in their hundreds of thousands.

The app economy

Who are the players?

Apple and Google. There are others, but their impact is dwarfed by these two
players.

Apple got it right first. While iTunes impressively and fundamentally reordered
the music market, the app market’s popularity left iTunes in the dust.

151
http://techcrunch.com/2011/05/18/gilt-tastes-ipad-swipe-without-touching/
152
http://www.pcworld.com/article/228151/smile_to_unlock_iphone_app_uses_facial_recognition_to_secure_your_phone.html

34

Figure 2 iTunes fundamentally reordered the music market, but the app store’s
growth leave it in the dust. KPCB and Apple.

However, Google’s app store, while less easy-to-use, is now growing faster.
While it’s almost pointless stating the raw numbers as they’ll be out of date
within weeks of writing them, the Google app store (formerly Android Market,
renamed Google Play in 2012) currently has 450,000 apps, which have been
downloaded 10 billion times. Apple’s store has 500,000+ apps and, in March
2012, had 25 billion downloads.

Although there are other players, it’s these two that lead the pack in terms of
app usage, as the chart below shows.

Figure 3 Installed base vs app downloads, iOS and Android way ahead

35

App store economics

30% of revenue from apps on both the Apple App Store and Google Play go
to Apple and Google; 70% goes to the producer of the app.

About 30% of the apps on the App Store are free; the remaining 70% carry a
cost. Google Play on the other hand, largely because there is no vetting in the
submission process, is mostly comprised of free apps (around 60%), while
40% are paid for153.

Partly as a result of these factors, the Apple App Store wins on revenue,
leaving others a distant second. Estimates have been made that the App Store
is worth $7.08bn. To give that context RIM (BlackBerry), is worth $7.04bn.

App economics

Combined app store data (Apple App Store for iPhone, BlackBerry App World,
Nokia Ovi Store and the then-named Google Android Market) show over the
course of 2010 there was a shift to lower price tiers, with the $1.00 to $1.99
segment seeing the most growth154.

What apps are most popular by download?

153
AndroLib and 148App.biz, www.pingdom.com (August 2010) data
154
Distimo Research

36

Data from the US shows how the app store can be broken out by popularity of
category. Games, books and entertainment lead the pack155.

156

The most downloaded apps of all time are as follows. Just look how popular
simple gaming and the social stuff is:

PAID
01. Angry Birds (games)
02. Fruit Ninja (games)
03. Doodle Jump (games)
04. Cut the Rope (games)
05. Angry Birds Seasons (games)

FREE
01. Facebook (social networking)
02. Pandora Radio (music)
03. Words With Friends (games)
04. Skype (social networking)
05. The Weather Channel (weather)157

App usage
155
http://www.mobclix.com/appstore/1
156
http://www.mobclix.com/appstore/1
157
http://sg.news.yahoo.com/25-billion-downloads-most-popular-ios-apps-145333092.html

37

While the app markets of Google and Apple are impressive and both
companies like to market the numbers repeatedly to prove the extra value in
their ecosystems, it’s worth digging deeper into usage.

It’s not just whether they have a smartphone, it’s if they download

The average number of apps US adults have is 18158 but only 68% of those
who have a phone with apps actively use them159. Older phone users in
particular do not use the apps that are on their phones, and one in ten adults
with a phone (11%) are not even sure if their phone is equipped with apps160.

It’s not just if they download, it’s what they use

Added to that, even after downloading them people don’t use apps. Across
Android, iPhone, iPad, BlackBerry and Windows Phone 7 apps a quarter of
apps downloaded were only used once161. While it’s entirely possible that the
one use was enough (and in the context of brands the one go on an app may
be enough to meet an objective), it’s much more likely that this represents the
long tail of apps gathering dust.

Smartphone penetration not indicative of smartphone usage

As a result of stats like these, we should be careful not to equate penetration
with usage. 27% of the UK might use a smartphone, but only 70% of that 27%
might be using apps, of which many are sitting dormant. 10% of that 27%
might not even know they have apps.

158
http://pewinternet.org/Reports/2010/The-Rise-of-Apps-Culture/Overview.aspx
159
US base http://www.pewinternet.org/Media-Mentions/2010/Report-Relatively-few-people-use-cellphone-apps.aspx
160
http://www.localytics.com/blog/post/first-impressions-matter-26-percent-of-apps-downloaded-used-just-once/
161
http://www.localytics.com/blog/post/first-impressions-matter-26-percent-of-apps-downloaded-used-just-once/

38

Tablet
Tablets are taking the world by storm. Even Steve Jobs was surprised by their
success claiming in an early investors call after launch that they may just have a
‘tiger by the tail’. Essentially, we are seeing a repeat of the iPhone story – but
on fast-forward. The iPad and its myriad competitors are finding a mass
audience quicker than pretty much any device in consumer tech history. Even
the Queen has one now – an indication of the much broader market Apple has
drilled into. And while they tout portability, it’s the home they’re being used in,
replacing the book in bed. Welcome to the age of casual computing.

40

The tablet market
How big is the tiger?

iPad the fastest selling Apple device. Ever.

According to Apple’s data it’s the fastest ramping device in terms of global
shipments ever sold in quarters after launch in consumer tech (see below),
which has prompted a host of ‘me too’ products from Samsung, Motorola,
Sony and even, bizarrely, clothes retailer Next.

162

By the start of 2012 Apple had sold 55.28 million163. In 2010 it was 15 million,
outselling Macs, their desktop and laptop computers, in units. By any measure,
this was an incredible ramp for an entirely new computing product. It is so
startling that nobody predicted it, not bullish Wall Street analysts (Goldman
Sachs predicted 6.2m sales164 in year one) or even wide-eyed gassing
bloggers.

The accelerated world

The accelerated adoption curve is worth dwelling upon. One explanation is that
we are in a point in technology history where we’re shifting to a new computing
paradigm and while everything will plateau out in a few years, until the next step
change comes along, we’re experiencing heady growth for the moment. We’re
getting drunk on new gadgets and the gloomy hangover is coming.

162
http://aaplinvestors.net/stats/iphonevsipod/
163
http://www.apple.com/pr/library/2010/07/20results.html
164
http://techcrunch.com/2011/01/19/nobody-predicted-ipad-growth/

41

Or, and this seems more compelling, we’re looking directly into the face of our
accelerated world, where there’s more technology change occurring more
frequently and reaching more people faster than ever. Tech companies must be
rubbing their hands. Marketing departments should be planning.

Who are the other players?

The story with iPhone – Apple making a market and others scrabbling to get a
slice, with Google eventually overtaking – will likely be repeated in tablets. The
iPad had 85% global share in the tablet market during 2010. This dropped to
62% by March 2012 as other players gained share165, chief among them
Amazon’s Kindle and Samsung (see table). In 2011 an estimated 72.7m tablets
were shipped, accounting for a quarter of all mobile PC sales166.

167

The UK market

Between October 2010 and December 2011 tablet ownership trebled to
9%168. How does this breakdown? 0.1% own a tablet only, representing a tiny
but new market of computer users or people who’ve relinquished all their other
technology. 1.6% have a laptop and a tablet, while 0.5% have a tablet and
desktop and 7.3% have the full house: laptop, desktop and tablet169.

The future market

Aggressive growth is predicted with estimates of 500 million units being sold in
2015170. To give that perspective around 360 million PCs are shipped each
year. The market for computing is getting bigger as we enter the post-PC
world.

165
http://news.cnet.com/8301-13579_3-57382808-37/ipads-share-of-tablet-market-to-dip-to-62-percent-this-year/
166
http://www.v3.co.uk/v3-uk/news/2135289/tablet-sales-grow-250-cent-2011-reach-million
167
http://www.isuppli.com/Display-Materials-and-Systems/News/Pages/Apples-Toughest-Competition-in-the-Fourth-Quarter-Tablet-Market-Was-
Apple.aspx
168
Digital Trends Winter – Uk, December 2011
169
Mintel, Desktop, Laptops and Tablet Computers 2011
170
eMarketer, December 2010

42

Who owns a tablet?
Skews younger and male

Let’s air the caveat first. New technology is almost universally adopted by
young affluent guys. So, tablet owner data at this stage in the product’s short
life isn’t necessarily indicative of the future audience. iPad conforms: 25 to 34-
year-olds make up the major owner segment followed by 18 to 24-year-olds.
65% of these owners are male171. This is a pattern that has held into 2011172.
In the UK we can see the following pattern of ownership:

171
http://blog.nielsen.com/nielsenwire/online_mobile/connected-devices-how-we-use-tablets-in-the-u-s
172
http://www.appstechnews.com/blog-hub/2012/feb/07/who-are-using-smartphones-tablets/

43

173

173
Mintel, Destop, Laptop and Tablet Computers 2011

44

Sharing it

It’s worth tempering the ownership data with the fact that 43% of Apple's iPad,
Samsung's Galaxy Tab and the Motorola Xoom’s US buyers share their tablet
with others in their house; 8% had bought it for someone else. We therefore
need to be careful about being led by the buyer data as other audiences may
be using tablets174, something day-to-day experience teaches us is the case,
as kids and grandparents pick up the device.

Multiple tablets

In the UK while 74% of iPad households have just the one device, 16% have
two or more. 18% of those with iPads were planning on purchasing another
tablet or e-reader, with a heavy preference for iPad (66%)175.

Receptiveness to advertising

Like ads more

The iPad audience may just be one of the most lucrative out there for
marketers. In a study looking at iPad users, 46% said they enjoy interactive ads
vs 27% on other devices, 35% said they enjoy any ads (vs 17%) and they were
also more likely to click on simple text ads (40%) than those on other devices
(19%).

More likely to spend

They’re also the most likely to splash cash as a result of seeing an ad either
later on a PC (36% iPad vs 27% all devices), in store (24% iPad vs 10% all
devices), by telephone (12% iPad, 7% all devices) or on their iPad itself (8%
iPad vs 5% all devices).
176

174
http://blog.nielsen.com/nielsenwire/online_mobile/connected-devices-how-we-use-tablets-in-the-u-s
175
http://today.yougov.co.uk/sites/today.yougov.co.uk/files/Tablet_ownership_in_households.pdf
176 http://blog.nielsen.com/nielsenwire/consumer/the-connected-devices-age-ipads-kindles-smartphones-and-the-connected-consumer/

45

177

177 http://blog.nielsen.com/nielsenwire/consumer/the-connected-devices-age-ipads-kindles-smartphones-and-the-connected-consumer/

46

What are they doing with it?
Most used functionality

Tablets are used mostly for consuming games (84%), information (78%), email
(74%) and news (61%). Interestingly, people spend up to five times the
amount of time reading news on their device as they do on publications’
websites178, most likely because they’re more comfortable – sitting at a
computer is not relaxing, sprawled on a bed is. Over half (56%) use them to
social network. And while not quite as popular, nearly half of users read (46%),
consume entertainment (51%) and shop (42%) on their tablets179. While
shopping here is defined in its broadest sense other data show that nearly one
in five UK tablet users (19%) make purchases with a tablet180.

181

Most used apps

The top five most downloaded paid iPad applications of all time are as follows:

01. Pages (productivity)
02. Angry Birds HD (games)
03. Angry Birds Seasons (games)
04. Penultimate (productivity)
05. Scrabble for iPad (games)

178
http://thenextweb.com/media/2011/05/18/news-is-5-times-more-engaging-on-a-tablet-than-a-website/
179
Admob by Google Tablet Survey, March 2011, US base
180
181

47

The top five most downloaded free iPad applications of all time are as follows:

01. Angry Birds HD Free (games)
02. The Weather Channel for iPad (weather)
03. Netflix (entertainment)
04. Skype for iPad (social networking)
05. Kindle – Read books, Magazines & More (books)182

How long are they using it for?

Nearly three quarters (68%) of owners use their tablet for more than 2 hours a day,
with 30% using it for 1-2 hours183.

184

Where are they using it?

By a long way, ease of portability and use are the reasons people get tablets over PCs
or laptop185. However, current users aren’t taking that portability too far: 82% name
the home as the primary place they use it, followed by out and about at 11% and work,
7%186.

182
http://sg.news.yahoo.com/25-billion-downloads-most-popular-ios-apps-145333092.html
183
184
185
The Nielsen Company, Q1 2011 Mobile Connect Device Report
186

48

When are they using it?

Tablets are used mostly during the week (69%) and at nights (69%). To a much lesser
extent, people use them at weekends (31%) and during the day (38%). One way to
think of it is that the tablet is replacing the book and TV as a way to relax in the
evenings after work187.

How is this impacting usage of their other devices?

Despite most people (72%) saying tablets aren’t their primary computer, other
electronics are gathering dust nonetheless188. 77% of users say they use their
PC/laptop less now they have a tablet189. A different US study has shown the broader
impact of this:

190

187
188
189
190
The Nielsen Company, Q1 2011 Mobile Connect Device Report

49

Behaviours
Technology has not changed the fundamentals of human behaviour – but it has
changed the way we behave fundamentally. People still want to talk, find things
out and be delighted, it’s just we’re no longer beholden to a few devices to do
this. Communication, information and entertainment now run through many
tributaries, increasingly crossing each other’s paths. Too often people
bemoaning the drying up of one miss the opportunities filling up elsewhere or
the interesting intersections. This section looks at how we search, read, listen,
get, watch, play and blend many of these activities together on our increasingly
broad set of devices.

52

Search
With an estimated 40 billion pages and 1.5 billion images online191, search is
absolutely core to the internet. Google takes more than a billion searches a
day, answering them in less than a quarter of a second on average192. 16% of
those queries have never been seen before. That’s the face of change,
quantified, right there.

No matter how much pundits drive themselves into a frenzy over the rise of
social (‘visits to social overtook visits to search in May 2010’193), search is here
to stay. Nearly 90% of Brits search online194. While global PC searches
continue to grow (doubling in reach in the last two years195), it’s mobile search
that’s seeing staggering growth. Any brand worth its salt will have a search
strategy for desktop but most won’t have a mobile search strategy. They are
going to need one.

The players

Google dominates. The search engine is the largest player in the world with an
84.65% share196. Its other search engine is the world’s second largest by
volume of search. It goes by the name of YouTube197.

The others have tiny shares: in February 2012 Yahoo had 5.42%, Baidu had
4.67%, Bing had 2.11% and others shared the remaining crumbs198.

Search behaviour

How many searches do people make?

Four in 10 respondents (40%) used a search engine more than twenty times in
any given week199, with usage smoothly declining as people got older200.

How deep into search do people go?

79% will go through multiple pages of results if their search isn’t satisfied on
page one201. Note this is not the case on mobiles. Mobile searchers simply

191
http://www.businessblogshub.com/wp-content/uploads/2010/10/google-statistics.jpg
192
http://www.google.com/ads/answers/numbers.html
193
Online Leisure-UK- December 2010 (Mintel)
194
Digital Trends April 2011, Mintel
195
196
http://marketshare.hitslink.com/search-engine-market-share.aspx?qprid=4
197
http://www.businessinsider.com/youtube-2010-11
198
http://www.karmasnack.com/about/search-engine-market-share/
199
http://econsultancy.com/uk/blog/7027-20-stats-you-might-not-know-about-user-search-behaviour
200
201

54

don’t drill past page one202. If you don’t feature in the right places for the right
searches, you don’t exist. 89% will change the terms they’re using to try and
refine results but, if they don’t find what they want, 89% will change search
engine203.

What makes people more likely to click a result?

Short answer: image, video or multiple listings204. 53% said they’d be more
likely to click a search link if there was an image; 26% if there was a video and
48% if the brand appeared multiple times. We’d want to see actual usage data
(not just what people unreliably say what they’d do) to flesh this out but these
indicate digital strategies that flood the long tail of search with video and image
to improve search ranking and the attendant search leads.

How sensitive are people to time delays in getting search results?

People are extremely sensitive to even very slight delays in their searches. A
Google study found a delay of 100 to 400 milliseconds when displaying search
results led users to conduct 0.2 to 0.6 % fewer searches205. This may seem
small but multiplied across a global brand’s site it could seriously affect
conversion and the bottom line. If people are used to it on Google, brands
better keep up or they’ll get punished by impatient users.

Search for products and services

Search is the absolutely daddy of internet advertising. The relationship between
search and commerce is truly phenomenal and the major reason Google’s
market capitalisation is $201.72bn (Feb 2012)206. While online display
advertising in its most basic form is suffering severe click deflation, search is
booming. People are interested in things they’re searching for; display ads are
a distraction.

83% of internet users use search engines to find specific products or
brands207; 67% search for product and price information online at least once a
month208 and over a third of mobile internet users searched for a product or
service to buy209. From desktops 20% of searches are about location, from
mobile it’s 40%210.

202
ComScore, September 2010
203
204
205
http://www.technologyreview.com/web/32338/?a=f
206
http://uk.finance.yahoo.com/q?s=GOOG
207
208
Researching Purchases Online – UK- April 2011(Mintel)
209
http://www.slideshare.net/Tomtrendstream/welcome-to-social-entertainment-annual-report-2011?from=ss_embed
210

55

Why search for products and services?

80% research a specific product or brand before purchasing online; 76% use
it before purchasing offline; 78% to find the best price of a specific product or
brand211.

Mobile is stealing more and more of the show when it comes to shopping. Just
take a look at how Americans used search and their phones in the lead up to
Christmas 2011:

When are the searches for products and services?

Within the shopping category, more searches are made on Sunday than on any
other day of the week212. Then there are spikes at lunch and spikes in the
evening all other days213.

How many searches are for branded terms?

Roughly 90% of searches for the top 2,000 search terms in the UK were
branded in nature. This has been growing steadily: in 2007 they accounted for
81%, in 2005 66%214. This is often referred to as navigational search: people
know roughly where they want to get but searching is easier than typing out a
web address. It just shows how brands act as shortcuts to categories and

211
212
Accessed from: http://googlebarometer.blogspot.com/2009/06/rise-of-meticulous-shopper.html in 2011; now no longer online
213
214
Hitwise Intelligence – Robin Goad – UK: 9 in 10 UK searches are navigational / branded

56

makes one of the strongest commercial arguments for brand marketing. Brand
should be doing whatever they can to get at ‘end of fingertips’ when people are
searching.

What are the top branded search terms?

215

How many people realise the search ads are ads?

63% do; 37% don’t216. You’d want to be in search anyway but the size of the
latter number is just another reason to be there.

How search and real life interact

Searching to go in store

Around a quarter of internet users report to searching online and then
completing the purchase by speaking to someone in store217. In fact, this might
be much higher as other data show 74% of internet users used search to find
places to buy brands offline218.

Advertising drives desktop search

78% of internet users search after seeing an advert elsewhere219.

Advertising drives mobile search

The interaction between advertising and mobile phones is established but
applied rarely. 71% search on their phones as a direct result of exposure from
traditional media (68%), online ads (18%) or mobile ads (27%) (US base)220.
215
http://www.experian.com/hitwise/press-release-facebook-was-the-top-search-term-for-2011.html
216
217
Web aggregators – UK – November 2010 (Mintel)
218
219

57

Advertising drives leads and purchases

Eight in 10 notice a mobile ad, while one in three notice a mobile search ad.
Incredibly, half of those who see an ad on a mobile take action, either visiting a
website (35%), making a purchase (49%) or recommending a brand or
product to others (24%) (US base)221.

Search by demographic

The young using search less

The effect is very slight but the younger you are the less likely you are to have
used a search engine. This may reflect the increasing use of social networks,
which use friends as sources of information over search222.

Well off search less

Another slight effect is the increased search occurring as you travel down the
socio-economic ladder until you hit the bottom when it lifts again223.

220
221
222
Old vs young on the net- UK- May 2010 (Mintel)
223

58

224

New developments

The algorithm gets social

Google’s breakthrough invention was to figure out how to serve you the most
relevant search results, based on their PageRank algorithm. Instead of
analysing page content and trying to make decisions based on that, it simply
and ingeniously tapped into the collective brain by incorporating into its
algorithm the number of links coming to a page. The more popular a page with
people, the more popular Google read it to be. Page quality didn’t have to be
decided by a computer: it was already decided en masse by lots of people
making the small decision to link to a page. The algorithm has naturally got a lot
more complex since then, but that’s what’s at its heart.

Today there’s even more collective social information to tap into, that’s
volunteered by social networks. Bing, Microsoft’s search engine, has added a
social layer to search by tapping into the knowledge of who your friends are
and what they like. You can see your friends’ recommendations when you
search in Bing. Google is doing the same with its G+ product225.

But as search engines start to incorporate more of this information into their
algorithms, the brands which have social currency in the bank will come out

224
225
http://googlesocialweb.blogspot.com/2011/05/social-search-goes-global.html

59

winners. If nothing else a social presence is an investment in your search
future.

The pocket shopper

In the last two years mobile search has grown 500%, a rate comparable to the
early days of desktop search226. One in every 10 retail searches is done
through mobile227,228, although the path to purchase was varied. And 12% of
all paid search clicks were made on a tablet or smartphone, representing a
50% increase since October 2011 alone229.

The opportunity for brands here is enormous both in terms of getting a mobile
strategy sorted and not getting one sorted. The former could deliver enormous
value to brands; the latter could suffocate fresh revenue as multichannel
competitors seize the prospects themselves.

226
http://digital-stats.blogspot.com/2012/02/googles-mobile-search-volumes-doubled-y.html
227
http://www.bizreport.com/2011/10/1-in-10-retail-searches-done-via-mobile.html
228
http://www.brandrepublic.com/bulletin/brandrepublicnewsbulletin/article/1066923/google-brc-figures-show-explosion-mobile-retail-search/
229
http://www.marketwire.com/press-release/marin-software-reports-49-increase-in-uk-mobile-paid-search-click-share-during-q4-1608510.htm

60

Communication
Email

Email still plays an enormous role despite social networks. Close to 90% of the
internet population use it230.

Social networks

The rise and rise of the social network

Brits are visiting social networks more and more. Since April 2009, when 46%
of people said they used social networks, usage has leapt 16% to 62% of
people saying they’ve visited sites like Facebook231 in 2010. As of 1st March
2012 there were 30,249,340 people on Facebook232. There’s a lot more of
that in the next section, but right now we’ll just focus on communication.

Communication through social networks

Although usage of the networks is skyrocketing, communication through the
messaging functions is down. 37% of US teens sent messages through social
networking sites233, down from 42% in 2008234. The same research has shown
how group messaging is also down in the same group (from 61% to 50%)235.

What this research misses is how communication is carried out through the
Facebook wall where both one-to-one (albeit public) and one-to-many
communication can occur. And with 30 billion pieces of content shared every
month globally236, it’s no wonder other methods of communication are taking a
knocking.

Actually, social networks are canabalising real life communication, with one in
three people talking to their friends online more than face to face237. 25 to 34-
years-olds are most likely to do this (43% vs 32%238), reflecting the working
habits and technological proclivities of this group. Here’s the full analysis:

230
Digital Trends Winter 2011, Mintel
231
232
http://www.facebook.com/ads/create
233
http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_Social_Media_and_Young_Adults_Report_Final_with_toplines.pdf
234
235
236
http://www.facebook.com/press/info.php?statistics
237
Social Media and Networking, Mintel, May 2011
238

62

239

Instant messenger

Roughly 25% of people use instant messaging. Note, this stat excludes any
instant messenger activity occurring on social networks240. Given that
Facebook offers this functionality it’s very likely this under represents the extent
of instant messaging.

Face-to-face and online telephony

Voice and video online telephony has hovered around 15% penetration in the
UK since about 2009241. There are a few reasons that we can expect to see
this increase: the network’s getting stronger, the tech is getting better, the big
boys are on it and mobiles can increasingly do it.

Microsoft’s purchase of Skype signaled a large ambition. “We will move
beyond email and text to rich experiences. Talking to colleagues across the
world will be as seamless as talking to them across the table” said Steve
Ballmer, Microsoft’s chief242. Given that Microsoft has the Windows Phone,
Xbox (a games console), Hotmail (email), Windows Live Messenger (an instant
messenger), Windows (an operating system) and Exchange Server (enterprise
software), this isn’t necessarily hyperbole.

Globally, the service has 170m users, growing at 40% year on year (that’s
600k new registrations every day), clocking up 207bn calling minutes, 40% of
which is video based243.

239
240
241
242
http://techcrunch.com/2011/05/10/ballmer-bates-skype/
243
http://techcrunch.com/2011/05/10/ballmer-bates-skype/

63

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