Things are changing in the search environment
It is quite obvious that things are changing in the search environment and the pace of evolution is quickening. From the consumer's perspective the growth in the use of handsets and netbooks, in particular, is changing the way searches are done every day.
The general perception is that mobile searches are quicker than desktop ones. They provide on-the-go use, whilst desktop search is considered more secure. Mobile search is also changing from a paid search perspective. The decision making process is being shortened, and a decisions are being taken and evaluated in an ever-shorter period of time.
In addition, desktop searchers are becoming more experienced, and more skilled navigators of the Internet. Conversely, in mobile search, consumers are still a long distance from maturity and are currently in the process of learning and adapting to new techniques and technologies offered by new search tools and fancy handsets that have been recently launched in the market.
Therefore, mobile search is more considered a tool that allows consumers to "get information", while on the contrary desktop search is perceived to be a method to "get stuff", and therefore is bound to more high-value user experiences. In the future we can anticipate desktop search to decrease in number but to increase in quality of queries.
Desktop searches versus Mobile searches
The point is if mobile search will truly overtake desktop. Google's CEO has recently forecasted that mobile search will overtake paid search - although he did not confirm exactly when this would happen. He said mobile search revenues would overtake those on a PC within a few years, "not decades", driven by new technologies and the falling prices of smartphones. Besides this, it was predicted in 2008 that Google would make $21.31 billion in mobile advertising revenues during 2009.This, however, seems premature and excessively buoyant as they are positives and negatives to judge.
On a positive note, broadband penetration in the UK rose 95% among active internet users in December 2008 according to the ONS. The UK is leading the broadband revolution in Europe, and is predicted by EITO to become the largest single market in Europe with above average rates of growth. In addition, UK consumers receive an average broadband speed of 3.6 Mbits per second according to survey conducted by Ofcom which is far better than the average of other European countries. For all these reasons, the UK is well set technologically to develop and increase the number of searches through desktop and mobile.
Traditional computers in decline, netbooks on the rise
If we have a detailed look to what is happening in the hardware industry, the reading is shocking. It envisages a dramatic industry change as sales of traditional computers and laptops experience their sharpest unit decline in history. It is forecasted that PC shipments will total just 257 million units in 2009, an 11.9% decline from 2008, according to Gartner.
This trend is bucked somewhat by the rise of the netbook. Netbooks accounted for 30% of consumer portable sales in EMEA according to IDC - showing how the category is gaining popularity as consumers can enjoy on-the-go use. Only during Christmas shipments in the same region reached 3.6 million units accounting for 20% of the region portable shipments. It is worth highlighting that the increasing sales of netbook guarantee that there will be an adoption of non-Windows operating systems. As a result, netbooks are dictating an increasing fragmentation of the market akin to what it is happening in the mobile industry.
It is interesting to analyze the reason why netbooks which have been in the market for many years before the sudden drop in price by manufacturers made them actually affordable. The answer is very simple; they see clear threats to their territory from the mobile industry. On top, computer sales look unsettled as large technology companies such as IBM, Google or Intel are also planning to promote clouding computing which also will help to reduce in the future overall hardware sales although this will not affect desktop search.
Smartphone rapidly expanding
Another key factor that is helping mobile search to gain ground is that despite of the global mobile phone market which is expected to shrink 9% in 2009, the largest drop since 2001, down from 1.18 billion sold in 2008, smartphones are the fastest growing segment in the market, with 10 million iPhones sold in 2008. Furthermore, iPhone applications have increased by more than 400% in less than half year (75% of which are paid) and there have already been 300 million downloads during the same period.
With this rapid mobile development, leading companies are fighting for search dominance for mobile. Net Applications figures highlight Apple's domination of the market, with a 66% share of mobile browsing while android after all the investment since launch in September have only reached 6.26% and Blackberry is on 2.24%. This information sheds light on the search mobile dominance, again a space largely ruled by Google. Nonetheless, there are some signs of hope as mobile search appears to be more open to other, smaller companies. One good example is Abphone, the ad-sponsored search service specialised in entertainment and multimedia which has become the first search engine to be referenced by the three major French mobile operators: Orange, SFR and Bouygues Telecom in France. Is for this reason that mobile search will lead to a more fragmented market at the beginning which will be followed by saturation before it ends with a consolidation process - a similar process that desktop search experienced about a decade before. In this sense, it is also important to highlight that both mobile operators and portals will not easily cede search to web search engines and will vigorously follow several strategies to both appoint and neutralize potential competitors.
Mobile search offers more ways to search: voice recognition and sms applications(Cha-Cha)
Another interesting trend is that mobile search is largely linked to instant search queries where SMS applications play a large role. As an example, ChaCha, the mobile free search company, reported one million users and 27 million queries answered since its launch in January 2008. According to Nielsen, ChaCha has been the fastest growing SMS search service, and had a 7% of the U.S. mobile search market in Q2008, tying it with Yahoo. It is true that mobile search is key for informational search but has not been proved yet the influence for transactional search. What seems clear is that desktop and mobile will evolve hand in hand together as they become ever more highly interrelated. We have seen recently Microsoft announcing to open stores to promote Android, Nokia developing a search tool called Zoon, and Dell announce plans to venture in a mobile arena that is already tremendously overcrowded.
Search growth will continue
We can anticipate that the number of searches will be increased exponentially helped by the increasing expansion of mobile use. As a result, this will increase revenue and generate new opportunities for companies operating in the search field. Conversely, from a search engine optimization point of view, an interesting fact is that we cannot expect revenue to increase exponentially as SEO will not leverage profits and paid search will become more competitive as bidding for key words dramatically increases, in other words, mobile search will generate quantity but not quality.
We observe mobile search to extend business opportunities for SMs via local search which offers extraordinary local targeting opportunity for paid search, and high-value for marketers as reduces click fatigue and user dissatisfaction. As a paid search company, this is especially interesting as if we compare mobile performance to the web we could see how mobile despite generating less number of impressions can generate higher CTR as outputs a larger number of engaged consumers and therefore improves ROI on ad spend. This is especially interesting as if we compare mobile to the web, as mobile allows higher targeting and therefore increases consumer engagement, ultimately improving ROI and ad spend.
Finally, none seem to bring clarity regarding when all this gigantic change will take place or even when companies will be able to start establishing themselves within the sector: not for the next months or even the next few years - the economic turmoil has brought with it an ominous and unpredictable climate. However, regardless of the battered economy, online businesses, and above all mobile search, are more attractive businesses than ever and prepared to take on this change. The main challenge is now to convince the merchants and consumers that are not quite ready yet.
Nuria Sadurni - Net Media Planet - http://www.netmediaplanet.com
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