Flurry now measures apps used on more than 1 billion smartphones and tablets each month. As connected devices reach critical mass, marketers are more seriously incorporating mobile into the marketing mix. But there are pros and cons. While the collective size of the mobile audience is rivaling that of TV and other media, it still requires aggregating the audiences of many apps to reach what can be reached through a few TV programs. That said, the numbers are likely closer than you think. Additionally, mobile offers unique ways to engage consumers given its “always on, always present” characteristics.
In this report, we look into what it takes to reach comparably sized audiences across different media like television, print, online and mobile apps. We also drill down into how the size and engagement of the mobile app audience varies across days of the week and hours of the day, and how it presents unique opportunities.
Let’s start by considering when people use apps.
The chart above shows how app usage varies over the course of a day, cut by weekend versus weekday. Data used for this chart comes from the top 250 iOS and top 250 Android apps measured by Flurry Analytics during February 2013. Through the top apps Flurry sees, app usage spikes during primetime to a peak of 52 million consumers. Make a mental note of that number, because we’ll revisit it a little later.
Comparing weekday to weekend curves, the general shape is similar. App usage ebbs overnight and then grows throughout the day, peaking in the early evening. While weekends also have a distinct primetime window, they see higher daytime usage across the day between 9:00 AM – 5:00 PM, ostensibly when someone would normally be working. However, the overall difference in audience size during the day between weekdays and weekends is not substantially different. Let’s look at 11:00 AM, for example, when the number of people using apps varies the most between weekdays and weekends. The size of the audience during this time is only 25% greater on weekends. Looking at it another way, this means that during the normal workday, people use apps at least 75% as much as they do on weekends. This creates a unique opportunity for advertisers to reach desired audiences over the course of the day via mobile.
The App Audience: Big But Fragmented
Now, let’s return to that 52 million primetime app user number. To get to an audience of that size, you’d need to combine the circulation of the largest 200 weekend newspapers in the U.S. or combine the audiences for the 3 most highly rated primetime TV shows during a good TV week (e.g., The Big Bang Theory).
We believe this comparison says a couple of important things about the app audience: first that it has reached critical mass, and second that it is still highly fragmented relative to more traditional forms of media. Additionally, while we don’t compare costs in this study, it is far more affordable to reach an audience on mobile versus Print or TV.
Now let’s consider how the app audience compares to the audience that is reachable through larger digital devices like laptops and computers. Flurry measured 224 million monthly active users of mobile apps in the United States in February of this year. During the same month, comScore counted 221 million desktop and laptop users of the top 50 digital properties in the United States. From this, we conclude that the U.S. audience that is reachable through apps, albeit more fragmented, is now roughly equal to that which can be reached on laptops and desktops.
There’s An Audience for That, on Mobile.
Earlier this year, Morgan Stanley analyst Benjamin Swinburne showed that “There has been a 50 percent collapse in broadcast TV audience ratings since 2002.” As the prized 18 – 49 year old demo is further lured to digital media, marketers need to adjust. But the mobile industry also needs to do more to make media planning and buying more efficient for advertisers and agencies.
The more mobile ad networks increase their ability to deliver the right combination of reach and targeting, the easier it will be for advertisers to invest in mobile and leverage the unique value it offers. Mobile, in particular, can deliver different ads to different users within the same app or the same ad to similar types of people across different apps, based on the varying interests of those individuals. Dynamic segmentation is much more possible on mobile compared to earlier forms of broadcast media. Now, fast forward one year from now, by which time Flurry estimates the installed base of smartphones and tablets will have doubled to 2 billion active devices per month. That should leave marketers of nearly every product thinking: on mobile, there’s an audience for that.
In 2006, European mobile analysts dubbed mobile the “seventh mass media channel” following print, recordings (e.g., albums, cassettes, DVDs, etc.), cinema, radio, television and the web. However, mobile failed to fulfill its promise. For mobile to have reached its true potential as a mass media channel, it needed to overcome slow and expensive carrier data networks, poorly managed carrier decks, and a heavily fragmented handset base which featured a myriad of small screens, weak processors, confusing user interfaces and clumsy WAP browsers. With so much friction in the channel, content creators were stymied in their ability to deliver compelling experiences to consumers, making mobile look far more like a niche than mass media channel.
Then, in 2007, the iPhone changed everything. In addition to unleashing a prolific media device, Apple wrested control of the storefront from carriers, convinced carriers to offer flat-rate data plans to consumers, tapped into blazing Wi-Fi as a pipe and shipped a useful mobile browser. Most importantly, they built a low-friction, robust channel through which content creators could distribute smartphone apps to consumers: the App Store.
In a few short years, with Apple as a game-changing catalyst, applications have already been downloaded tens of billions of times. Research firm, In-Stat, forecasts there will be 48 billion app downloads in 2015. With their success, apps already challenge the television in terms of reach and the Internet in terms of engagement.
For this report, Flurry used data from over 45,000 companies across their more than 85,000 applications. Flurry Analytics tracks over 15B user sessions per month across iOS, Android, BlackBerry, Windows Phone and J2ME.
Unprecedented and Accelerating Reach
The chart above shows the number of people actively using apps on their smartphones in May 2011 across the top five European markets. Flurry calculates active smartphones by first measuring its own penetration across these devices via apps into which Flurry Analytics has been integrated. For example, Flurry detects roughly 85% of all iOS and Android devices worldwide. We then grossed this number up, by country, for our estimates.
Combined, the top five European markets – the UK, France, Germany, Italy and Spain – actively use apps on 46 million devices each month. With a combined population of just over 240 million, for ages 13 and over, the addressable market through smartphone apps averages approximately 20% of the largest, most affluent European countries. Additionally, with a month-over-month growth rate (Compounded Monthly Growth Rate, CMGR) of more than 10% over the last two years, we project the installed base of smartphones will more than double over the next 12 months alone.
In the chart below, we show the smartphone app audience as a percentage of each top European country’s population, again ages 13 and over. The UK leads in penetration with a whopping 33% of its population using apps on smartphones per month. France places second with a sizable 20%, next followed by Germany, Spain and Italy coming in with 14%, 9% and 10%, respectively.
After having established the percent of each country’s monthly population that can be reached through smartphone apps, we next look at the pace of smartphone adoption, by country.
The chart above shows just how quickly the base of devices running smartphone apps is growing by country. While the UK and France are the most penetrated to date, as a percentage of their countries' populations, the laggard countries are closing the gap in terms of growth. Spain leads in growth of its active smartphone user base with a monthly growth rate of 14%. Germany and Italy’s active smartphone bases are both growing at 11%. Additionally, France and the UK continue to grow, month-over-month, by 7% and 6.7%, respectively.
With growing adoption of iOS and Android-based smartphones, the imminent release of Nokia phones based on Windows Phone 7, and the fact that the majority of consumers actively use applications, we predict that the growth of this mass market media channel will continue to grow until near total smartphone market saturation. To underscore just how aggressively this channel is growing, if we assumed the growth of smartphone adoption continued at their current rates, all five countries would have full smartphone penetration in just over two years.
Games and Social Networking Rule
Flurry tracks the total number of application use sessions, from when consumers start app sessions to when they end them, and groups these sessions into categories such as games, news and travel. The top categories ranked by session usage worldwide are: Games, Social Networking, Sports & Entertainment and News.
The graph below shows how consumer usage varies by app category across the top five European markets.
With the exception of Italy, the games category is the most popular app category across all countries. In Italy, the one country where the games category does not lead, Social Networking is the top category, with 38% of Italians using Social Networking apps compared to other categories.
Comparing each country’s proportion of usage by category, more consumers play games in France than compared to other countries – a massive 45% of all French app sessions are Games. In Spain, a greater percentage of the Spanish population consumes news compared to other countries, and the UK leads in relative Sports & Entertainment app consumption. In all 5 countries, the 4 top categories make up 80% of all traffic.
Solid App Retention and Engagement
In May 2011, the average worldwide 6-month retention rate for all apps was 36%. In other words, of all consumers who downloaded an app over the last six months ago, 36% had used that same app within the last 7 days of May (Flurry looks at “last 7 days” for its retention metric).
Continuing to look at the top 5 European countries, all have posted 6-month retention rates of greater than 30%. The chart below breaks out each countries 6-month retention rate compared to the worldwide average.
Reviewing the chart, we note that the UK leads in retention with 38%, followed by France at 37%, Germany at 34% and then Spain and Italy at 32% and 31.5%, respectively. Generally, we see a correlation between the maturity of a given market and app retention. We observe that consumers typically try several apps before they settle into using a group of favorites, which they then use several times per week, even per day. In less developed countries, we often see much more app experimentation. The five countries we review for this report are clearly all highly developed economies.
As a mass market media channel, smartphone apps not only reach a sizable audience today, but also continue to grow at staggering rates. The channel is already formidable with no signs of slowing. Smartphone app consumers are highly engaged and consider their smartphone among their most important personal possessions; we believe the 8th mass market media channel has indeed arrived in Europe.
On October 5, 2009, CBS canceled "Guiding Light," the longest running television drama in history, which began in 1952. Last month, CBS aired the last episode of "As the World Turns," the Proctor & Gamble production that has been running for more than 50 years. Ad dollars allocated to soaps fell nearly 30 percent from 2005 to 2009, and then fell another 20 percent in the first half of 2010.
Since the 90s, the television industry has been reeling from the disruptive forces of the Internet and DVRs. No longer could the industry depend on a captive audience to which it had grown so accustomed. While the industry has adapted its programming with a glut of cheaper, but profitable competition reality shows and edgier dramas to reclaim a loyal audience, a new entertainment force is once again driving disruption: the iPhone. The chart below illustrates how iOS social games, a popular form of gaming mixed with social networking, stack up against primetime TV viewership.
Social games on iPhone, iPad and iPod touch devices are competing for television viewers. In fact, these apps, tracked on the Flurry network alone, comprise of a daily audience of more than 19 million who spend over 22 minutes per day using these apps. Treated as a consumer audience, its size and reach rank somewhere between NBC’s Sunday Night Football and ABC’s Dancing with the Stars, and only 4 million viewers shy from beating the number one prime-time show on television, FOX’s American Idol.
However, Flurry is only seeing part of the picture. With Flurry integrated into more than 50,000 apps, out of Apple’s stated total of 250,000 apps, Flurry has about 20% penetration. Additionally, since this analysis focuses on only two categories of applications, social games and social networking apps, it’s clear that iOS devices are already ahead of prime time television’s hottest shows.
Given that the app store only launched in July 2008, these figures are staggering. Mass consumption of applications on mobile devices has exploded in record time. Also noteworthy is that the enormous audience these applications reach takes place every day, 365 days a year. Compared to a top television series, which airs 22 episodes a season, advertisers can reach a larger consumer audience through applications 15 times more frequently.
There are a lot of conclusions that can be drawn from this phenomenal shift in audience behavior. The most obvious is the impact on the advertisement industry, which has relied on the reach generated by its prime time television slot for years. This season, while Americon Idol is busy shuffling judges, the people have voted: iOS social games are as prime time as prime time television. Enjoy the show!