The Dynamic Nature of Mobile Search in Asia-Pacific Adobe Digital Index
The Dynamic Nature of Mobile Search in Asia-Pacific Table of contents 1: Executive summary 2: Introduction 3: Search on mobile 4: Search traffic quality varies 5: Market share 6: Conclusion 7: Methodology Executive summary The move to mobile Internet access is an established and accelerating global trend. 1 As Asia-Pacific (APAC) Internet users transition to smartphones and tablets, mobile search is rising in importance. Based on an analysis of 2.5 billion visits to the websites of over 125 APAC companies in the finance, media, retail and travel industries, Adobe Digital Index found the following: 1. Increases in mobile Internet browsing in APAC and heavy reliance on mobile search will cause brands to rely more on search optimization for driving mobile traffic than for traffic on PCs. 2. The quality of traffic mobile search generates varies widely by region and search engine. While Google retains the largest share of mobile search overall, Bing and local players such as Baidu (China) and Naver (South Korea) appear to offer brands more valuable visitors. 3. The primary driver of Google s dominant market share is not Android device penetration, but its position as the default search engine on competing smartphones. 4. Impending disruptions in both technology and new alliances could reshape the market share of current search engine leaders. Digital marketers in the APAC region should ensure that they are adequately investing in search and stay ahead of the coming changes by developing country-specific mobile optimization strategies that incorporate these realities.
Introduction The Mobile Internet continues to grow, especially in Asia-Pacific (APAC). APAC has led the world in mobile phone shipments for several years and is forecast to account for close to half of all new mobile phones in 2012 and 2013. 2 Additionally, on a worldwide basis, APAC ranks second for tablet shipments, accounting for more than 25% of global shipments per quarter. 3 The May 2012 Adobe Digital Index report, How Tablets Are Catalyzing Brand Website Engagement, projects that by 2014 more than 10% of Internet visits will come from tablets and more than 8% will come from smartphones. 4 Although penetration of mobile technology varies across countries, mobile search is now available to a very large percentage of mobile phone and tablet owners in APAC. As these consumers gain experience and upgrade to faster and more sophisticated devices, opportunities to target consumers through mobile search will become mission-critical for marketers. While the increasing volume of mobile search traffic is certainly not unique to APAC, it impacts the region more dramatically for a number of reasons. Many APAC consumers have more opportunity and need for mobile search because of a greater use of public transit, longer commutes, and more time spent away from home. Additionally, the relatively low proportion of PC-ownership makes a mobile device the primary or only method of accessing the Internet for many consumers. To evaluate the mobile search opportunity in APAC, Adobe Digital Index analyzed 2.5 billion anonymous visits to the websites of over 125 APAC companies in the finance, media, retail, and travel industries from April 1 to June 30, 2012. Because mobile search is typically intent-driven, marketers wanting to maximize conversion, revenue, or ad impressions from mobile visits will benefit from the implications of this analysis. 2
Search matters more on mobile devices Mobile search drives more traffic than PC search in every region around the world (see appendix Table 2). In all regions search is consistently driving about 30% of all mobile visits. However, if China were removed from the APAC averages mobile search would drive 33% of mobile visits, making it the region with the highest mobile search usage. On a country-by-country basis, the results for APAC indicate that search drives a higher percentage of visits from mobile devices than from PCs (see Figure 1 and appendix Table 3). This trend is most pronounced for tablet visits, but also holds true for phone visits (see Figure 2 and appendix Table 3). Search is a more popular navigational tool on mobile devices, likely due to the small keyboards and on-the-go accessibility, which create more occasions to use search. Search referred visits by country Search referred visits by device APAC Overall ANZ Mainland China Hong Kong India Japan South Korea Southeast Asia Singapore 29% 38% 35% 39% 29% 9% 17% 8% 20% 25% 31% 28% PC Mobile (Tablet + Phone) Figure 1 Figure 2 An exception to the rule The glaring exceptions to the trend toward heavy mobile search usage are mainland China and South Korea, where search drives only 9% and 8% of mobile visits, respectively. In China and South Korea, domestic navigation engines and portals have a greater influence on search patterns. Naver, for example, offers its own content on its home page and derives a large proportion of its revenue from display advertising. Users of Naver, therefore, have a tendency to stay on the site and are less frequently referred to other websites. 5 In China, referrer traffic is influenced by the presence of domestic navigation engines such as Baidu-owned Hao123 and upstart Qihoo360, which have a similar search impact as Naver. 3
Search traffic quality varies As marketers look to optimize search marketing in APAC, search quality is an important consideration. On average, local search engines, as well as Bing, deliver lower bounce rates (the percentage of single-page visits), while Google has the highest (see Figure 3). Further, Bing delivers lower bounce rate than Google across every industy type (see Methodology and appendix Table 5). Mobile bounce rate by engine Highest to lowest quality Figure 3 6 Bing Naver Baidu Yahoo! 34% 36% 29% 29% Google 37% Local players offer better in-country results In countries with strong local search engines, such as South Korea and China, the data suggest that local search delivers higher quality traffic than does Google. When used outside of their home countries, however, Naver and Baidu search quality declines significantly (see appendix Table 5). Bing offers a higher quality alternative Bing s performance in traffic quality offers it the potential to become a stronger competitor, but only if it increases the overall volume of mobile search referred traffic. It s possible that Bing s superior results are influenced by the quality of its smaller audience rather than solely by its search algorithms. Regardless of the reason, without either greater mobile-os penetration or greater share as the default search engine on mobile devices, Bing s potential quality advantage is unlikely to translate into increased market share. Google directs most mobile search volume Another consideration important to search marketers is traffic volume. The data suggests that rising mobile usage is not only causing search to become a more important source of traffic, but it is also providing a fresh opportunity for search engines to shift market penetration. So far, Google has benefited most by consumers move to mobile. As shown in Figure 4 and appendix Table 4, Google has a greater share of search-referred mobile visits than PC visits in every country analyzed. The trend holds true in areas where Google dominates on PC, such as Australia and New Zealand (ANZ) and India, as well as areas where Google is a distant second or third in PC search, such as mainland China and South Korea. Google s superior mobile performance relative to PCs should be worrisome not only to global players such as Bing and Yahoo!, but also players that have traditionally dominated their local markets, namely Baidu in China and Naver in South Korea. Google s Q2 2012 share of search referred visits +13% +27% +20% +8% +8% +3% +2% APAC Overall Mainland China +27% Japan Hong Kong South Korea +16% ANZ Singapore Southeast Asia India PC Mobile (Tablet + Phone) Figure 4 4
Google leadership is not correlated to Android penetration Surprisingly, the data also demonstrates that Google s competitive advantage due to Android phones is less of a factor in its search market share than anticipated. In fact, there is no direct correlation between Android s market penetration and Google s mobile search share within a given geography (see Figure 5). The reasons for the lack of correlation are two-fold. In China and South Korea the two markets of highest Android penetration local search giants Baidu and Naver are sometimes preset, making them the default setting for mobile search even on Android devices. 7 Google is the default mobile search engine on ios devices, which dominate the countries where Android penetration is low (Singapore, Southeast Asia, and ANZ). Q2 2012 Google/Android share comparison 75% Android device share of mobile visits 50% 25% 0% Correlated South Korea Mainland China Japan Hong Kong Southeast Asia Singapore India ANZ 25% 50% 75 % 100% Google search share of mobile visits Figure 5 Market share for mobile search is still unsettled Mobile search in APAC is subject to disruptive technologies and rapid transformation that may lead to a substantial shift in market share. Four regional trends will determine market share leadership. The maturing market in China Mainland China is likely to impact the region most dramatically because it s the latest and largest market to transition fully to smartphone and tablet devices. Recent subsidized phone offers that include better data-access price plans are making smartphones more affordable, leading to an increased penetration among middleincome consumers. These market changes will trigger expansion in both use and volume of users with high-speed mobile access. Marketers should plan for China s mobile search traffic to become an even more important source of traffic, as it is likely to approach search percentages similar to Hong Kong. 8 5
Device manufacturers control search default settings In South Korea, Google trails two homegrown search engines, Naver and Daum, and holds PC search market share in the low single digits. A pending decision from a lawsuit filed jointly by search giants NHN and Daum Communications which alleges that Google blocked local phone makers from adding their search applications to Android phones and tablets could further erode Google s Android advantage of being the default search engine. Apple restructures technology alliances Apple s ios devices currently feature Google as the default search application, delivering significant traffic volumes to Google. However, the recent announcement to replace Google with Baidu as the default search engine for ios devices in China, combined with the launch of Apple Maps and a partnership with Yelp, suggest that Apple intends to eliminate Google s default setting advantage. If another search engine, such as Bing, replaces Google as the default search engine on iphones and ipads, the shift toward a new search leader could emerge quickly. Google and Microsoft invest in device offerings Google s decision to acquire Motorola Mobility and subsequently launch the co-branded Nexus 7 tablet might counterbalance advantages of other device manufacturers. Similarly, the upcoming release of Windows Phone 8 and the recently announced Microsoft Surface tablet could also offer APAC mobile search users a compelling alternative. The Windows Phone 8 rollout has the potential to increase Microsoft s footprint, making Bing, the search engine with the lowest bounce rate in APAC, the default setting for a greater population of mobile users. Implications for digital marketers in APAC The findings in this report suggest four implications for how brands can improve visitor acquisition through search in APAC. 1. Because of the increasing number of mobile visits, traffic from mobile search will increase in importance. Visitor acquisition programs should be optimized for mobile search traffic separately from PC search traffic. 2. Differentiated, country-specific strategies are critical. Mobile search penetration and device preferences varies by country as well as industry, making APAC a complex region to optimize. Marketers can boost acquisition of mobile traffic by including a country-specific and device-specific search engine marketing (SEM) strategy and consider optimizing for local players such as Naver and Baidu. 3. Measuring traffic quality will further improve results. Significant differences in bounce rate by country and by industry, suggest that marketers should identify and track relevant quality metrics such as bounces, conversion, revenue per visitor, time spent on site or pages per visit to further optimize search engine traffic. 4. Marketers should revisit their search marketing strategies regularly because environmental, technological and strategic disruptions may result in rapid and influential changes. Conclusion The number of mobile visits driven by search in APAC, combined with the complex and dynamic nature of the mobile search landscape, require brands to develop tailored mobile search strategies for each country in which they operate. Given the disruptive technology landscape, it is unclear which search engines will become most relevant in each geography in the future. Monitoring and understanding these trends as they emerge gives digital marketers the best chance to optimize their websites and make the most of traffic from search. 6
Methodology This report presents findings from an analysis of 2.5 billion visits, including 250 million mobile visits, made to more than 125 mobile and traditional brand websites registered in the APAC region from April 1 to June 30, 2012. The samples included brands in the financial services, media, retail, and travel industries and were categorized by country based on the source of visits. Only websites with more than 50% of visits originating from a given geography were included. The majority of websites used received more than 90% of traffic from within the region in which they were classified. The visits analyzed were anonymous and consisted of all visits to these websites as measured by the Adobe Digital Marketing Suite. Countries in APAC include Australia, Hong Kong, India, Japan, Malaysia, Mainland China, Philippines, Singapore, South Korea and Thailand. Average metrics were calculated using the aggregated metrics of all websites in the study. No weighting factors were applied to the data. Glossary PC visits are defined as access to the website from a desktop, laptop, or netbook device. Mobile visits are defined as access to the website from an Internet-enabled mobile phone or tablet device. The analysis did not include visits to apps used on phones and tablet devices. Bounce rate is calculated as the total number of mobile visits with only one page divided by the total number of mobile visits referred from each search engine. Selection of bounce rate as an indicator of quality was verified by industry breakout to determine if the difference in bounce rate remained consistent by industry (see appendix Table 5). Findings that Google delivers a higher bounce rate in every industry relative to Bing bounce rate was used to support quality differentiation analysis. Search engine market share was derived using the total search engine referred visits for PCs and the total search engine referred visits for mobile. These measures were calculated via the referral domain data passed through URL and anonymous cookie-based information. About Adobe Digital Index Adobe Digital Index publishes research on digital marketing and other topics of interest to senior marketing and e-commerce executives across industries. Research is based on the analysis of select, anonymous, and aggregated data from over 5,000 companies worldwide that use the Adobe Digital Marketing Suite, powered by Adobe technology and solutions, to obtain real-time data and analysis of activity on their websites. For additional information about this report, contact Austin Bankhead, director, Adobe Digital Index, at DigIndex@adobe.com. About Adobe Whether it s a smartphone or tablet app, a game, a video, a digital magazine, a website, or an online experience, chances are that it was touched by Adobe technology. Adobe s tools and services enable its customers to create groundbreaking digital content, deploy it across media and devices, and then continually measure and optimize it based on user data. By providing complete solutions that combine digital media creation with data-driven marketing, Adobe helps businesses improve their communications, strengthen their brands, and ultimately achieve greater business success. Adobe s content authoring solutions lead the industry, enabling its customers to more effectively produce, distribute, and monetize digital content. Adobe also delivers the most innovative solutions for optimizing marketing campaigns and maximizing return on every marketing dollar. 7
Appendix: Selected data and endnotes Table 1: Percentage of Total Visits by Device Type & Country Country PC Tablet Phone ANZ 94% 2% 4% Mainland China 98% <1% 1% Hong Kong 93% 3% 4% India 97% 1% 2% Japan 84% 2% 14% S Korea 98% <1% 2% SE Asia 94% 3% 3% Singapore 89% 3% 8% Table 2: Mobile Search Visits by Region Region PC Tablet Phone Americas (US) 29% (31%) 37% (38%) 32% (34%) EMEA 30% 39% 31% APAC 25% 31% 28% Table 3: Search Referred Visits as Percentage of Total Visits by Device Type & Country Country PC Tablet Phone ANZ 28% 40% 38% Mainland China 16% 15% 6% Hong Kong 20% 20% 16% India 27% 32% 35% Japan 35% 39% 36% S Korea 14% 10% 8% SE Asia 25% 29% 31% Singapore 16% 23% 19% Table 4: Visits as Percentage of Total Search Referred Visits by Device Type, Search Engine & Country Device Country Baidu Bing Daum Google Naver Sogou SoSo Yahoo! Other PC ANZ 0% 7% 0% 89% 0% 0% 0% 2% 2% Mainland China 82% 1% 0% 7% 0% 6% 4% 0% 0% Hong Kong 3% 3% 0% 55% 0% 0% 0% 39% 0% India 0% 2% 0% 96% 0% 0% 0% 1% 1% Japan 0% 3% 0% 35% 0% 0% 0% 58% 4% S Korea 0% 0% 16% 4% 77% 0% 0% 3% 0% SE Asia 0% 4% 0% 91% 0% 0% 0% 4% 1% Singapore 0% 5% 0% 83% 0% 0% 0% 11% 1% Mobile ANZ 0% 0% 0% 97% 0% 0% 0% 3% 0% Mainland China 59% 1% 0% 34% 0% 4% 1% 1% 0% Hong Kong 1% 0% 0% 75% 0% 0% 0% 24% 0% India 0% 0% 0% 98% 0% 0% 0% 2% 0% Japan 0% 0% 0% 62% 0% 0% 0% 35% 3% S Korea 0% 0% 7% 20% 72% 0% 0% 1% 0% SE Asia 0% 0% 0% 94% 0% 0% 0% 6% 0% Singapore 0% 0% 0% 91% 0% 0% 0% 9% 0% 8
Table 5: Bounce Rate by Device Type, Search Engine & Industry Device Industry Bing Google Yahoo! Baidu Naver PC APAC overall 24% 30% 27% 39% 31% FSI 23% 27% 24% -- -- Media 39% 43% 38% -- -- Retail 26% 30% 35% -- -- Travel 25% 34% 27% -- -- Other 22% 28% 23% -- -- Mobile APAC overall 29% 37% 36% 34% 29% FSI 27% 35% 39% -- -- Media 48% 50% 45% -- -- Retail 29% 35% 36% -- -- Travel 26% 35% 38% -- -- Other 26% 38% 32% -- -- * Baidu base limited to mainland China/Hong Kong and Naver base limited to South Korea. APAC wide bounce rates rise to 39% for both Baidu and Naver. -- = insufficient sample of websites. 1 How tablets are catalyzing brand website engagement, May 2012. Page 2-3 2 Strategy Analytics. Global Handset Shipments Forecast by Quarter: Q2 2012., June 2012. Page 2 3 Strategy Analytics. Global Tablet Vendor Market Share by Region: Q1 2012., May 2012. Page 3 4 How tablets are catalyzing brand website engagement, May 2012. Page 2-3 5 Searchenginewatch.com Mobile Search Trends in Asia Pacific [Study], Adaline Lau, January 12, 2012 6 Bounce rates for Baidu and Naver calculated for home geography only. Bing, Google, and Yahoo! calculated for all APAC. 7 The Next Web.com, 80% of Android phones in China will have its default search set to Baidu, April 27, 2011 Francis Tan 8 FierceMobile Content.com, Regulators raid Google s Korean offices over Android antitrust probe, September 7, 2011 Jason Ankeny Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/ or other countries. Apple is a trademark of Apple Inc., registered in the U.S. and other countries. Android is a trademark of Google Inc. Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are the property of their respective owners. 2012 Adobe Systems Incorporated. All rights reserved. Printed in the USA. All other trademarks are attributed by their respective owners as follows: Microsoft, Bing, Windows and Surface is a registered trademark or trademark of Microsoft Corporation, Redmond USA. Baidu, Hao123 and Qihoo360 is a registered trademarks or trademarks of Baidu.Com, Inc. China. Naver is a registered trademark of NHN Corporation, Seoul, South Korea. Daum is a registered trademark of Daum Communications, Seoul, South Korea. Google, Android and Nexus 7 are registered trademarks or trademarks of Google, Inc., Mountain View USA. Apple, iphone and ipad are registered trademarks of Apple, Inc. Cupertino, USA. Adobe Systems Incorporated 345 Park Avenue San Jose, CA 95110-2704 USA www.adobe.com 7/12 9