The Future Belongs to Pioneers in Mobile Advertising

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Are you aware of the opportunities presented by mobile advertising?

Mobile marketing has grown at a breakneck pace in recent years and for good reason. At the heart of this development is the ever-increasing sophistication of mobile optimization. The arrival of new payment options, mobile-friendly websites, advertising extensions for social media and the growing popularity mobile apps are making mobile purchasing easier and more viable.

At a recent webinar organized by eMarketer mobile purchasing was the topic of focus, as well as major trends every e-commerce operator should take into account.

In the future, the ability of e-commerce operators to adapt to the needs of mobile users will determine the direction of revenue flows. The technical requirements of this on-going transformation mean that some will prosper and others flounder.

A few take-home points from the webinar:

Mobile purchases becoming more common

Although the share of mobile purchases with respect to total e-commerce is still rather small, the rate of growth is dizzying. In the United States, the percentage of mobile purchases of all online retail is 22% and thus 1.6% of all retail. By the year 2019, according to eMarketer, mobile purchases will constitute almost 30% of all e-commerce. In addition, two-thirds of digital product sales are predicted to be mobile-based in the year 2015.

Device-specific conversion rate:

Q1 2014:

  • Computer: 3.0%
  • Tablet: 1.75
  • Smartphone: 0.4%

Q1 2015:

  • Computer: 2.7%
  • Tablet: 2.0%
  • Smartphone: 1.0%

You should also take into account the still weak but constantly improving conversion rate of mobile users. In all likelihood this will rise further in the coming years due to the development of new and more user-friendly payment options.

The growing role of smartphones

While most mobile purchases are still done on tablet devices, the role of smartphones has grown steadily. By the year 2020, it is believed that smartphone-based transactions will account for more than 40% of all mobile e-commerce. In addition to mobile-friendly websites becoming more and more common, another factor contributing to this growing role is the trend towards larger display sizes. On smaller displays, customers almost always abandon their shopping cart selections. The abandonment rate drops quite rapidly once display size increases.

Smartphone display size and shopping cart abandonment rate

  • 3.2” – 98.8%
  • 4.0” – 93.5%
  • 5.0” – 90.8%
  • 7.0” – 87.6%
  • 9.5” – 80.6%

Mobile optimization is also still in its infancy, as indicated clearly by the fact that less than half of Fortune 500 companies have mobile-friendly websites. At this critical stage of technology adoption, however, early adopters are obviously poised to reap higher rewards than latecomers or laggards.

The importance of mobile apps and ads

Although direct sales through browser-accessed websites still dominate mobile e-commerce, the significance of applications is ever greater. Sophisticated mobile apps make customer engagement much easier. As a result, app-users usually buy more.

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Samuli Mäkelä

Energetic and extremely motivated person who will not give up before goals are achieved.

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