Key findings:

• The majority of 25-34 and 18-24 year olds now own smartphones (64% and 53% respectively);
• The majority of smartphone owners (62%) have downloaded apps on their devices and games are the top application category used in the past 30 days;
• The number of smartphone subscribers using the mobile Internet has grown 45 percent since 2010;
• 87 percent of app downloaders (those who have downloaded an app in the past 30 days) have used deal-of-the-day websites like Groupon or Living Social;
• Younger groups text the most. In Q3, teens 13-17 sent and received the most text messages (an average of 3,417 each month).

This report draws from a broad range of Nielsen data sources, including: Nielsen’s in-depth monthly surveys of mobile consumers (more than 300,000 consumers surveyed each year); Device metering data from the iOS and Android smartphones of thousands of consumers who have volunteered to be a part of our research panel; detailed, monthly analysis of the cellphone bills for 65,000 lines in the U.S., again, thanks to volunteer panelists.

For more, download State of the Media: The Mobile Media Report Q3 2011.

This edition of Nielsen’s App Playbook is based on an August survey of more than 4,000 mobile subscribers who reported having downloaded a mobile app in the past 30 days. Jonathan Carson, CEO of Nielsen’s Telecom Practice, is scheduled to unveil more detailed findings from the App Playbook in a keynote speech at the AppNation conference in San Francisco on Monday, September 13.

Games continue to be the most popular category by far, with 61% of smartphone owners and 52% of feature phone owners reporting using a games app in the past 30 days. Weather apps are the next most popular category. But while all categories of applications are more popular on smartphones than on feature phones, the difference is more pronounced in categories such as Maps/Navigation, where more computing power, larger screens and touch interfaces deliver a more satisfying experience.



Facebook is the most popular individual app on all of the major operating systems. Twitter is among the top five only on the BlackBerry, perhaps because the device’s physical keyboard is optimized for typing. And while YouTube is popular on Android and Windows Mobile, it doesn’t make the top five on either the iPhone or BlackBerry operating systems.



With the ongoing growth in popularity of connected devices such as touchscreen tablets, eReaders and media players, mobile apps are likely to flourish beyond phones and on these devices as well. Games are the most popular app category on all connected devices, just as they are on smartphones and feature phones, while the iPod Touch currently leads all connected devices in apps downloads. Nielsen is currently conducting a separate research study that will delve deeper into the role of connected devices in mobile media.



To get a better sense for how the world is watching video, today, Nielsen recently completed a survey of more than 27,000 online consumers in 55 countries, asking simple questions about how they watch video. Internet access still varies considerably by region, so the results of an online survey are not representative of the total global population, but show us how an important subset of the global population (the connected population) is consuming video across multiple platforms. The results from the survey, with corresponding syndicated Nielsen insights where available, were released today in a new report, “How People Watch – A Global Nielsen Consumer Report.”

“This report provides one of the broadest looks at how consumers watch video, to date,” says Matt O’Grady, who oversees the integration of Nielsen’s TV, online and mobile audience measurement. “The research reveals how connected consumers all over the world are expanding their video experience across screens.”

Key Findings

• Online Video: approximately 70% of global online consumers watch online video; but North Americans and Europeans lag in adoption. More than half of global online consumers watch online video in the workplace.
• Mobile Video: is already used by 11% of global online consumers: penetration is highest in Asia-Pacific and among consumers in their late 20s.
• Tablet PCs: are expanding the definition of mobile video. Globally, 11% of online consumers already own or plan to purchase a tablet PC (such as an iPad) in the next year.
• Television: is a universally important platform for video consumption, with connected consumers in many markets spending 4+ hours per day watching television.
• HDTV (High-Definition TV): is improving the TV viewing experience for as many as 30% of global online consumers. Adoption is highest among older consumers and in North America, where HD content has proliferated.
• 3DTV (Three-Dimensional TV): will have a small but important audience: 12% of global online consumers own or have definite intent to purchase a 3DTV in the next year.
• “Over the Top” TV: televisions with Internet connections are gaining interest. About one in five (22%) global online consumers owns or has definite interest in buying a television with Internet connection in the next year.

For the first time, this report identifies important differences in cross-platform video behavior by region and country:

• Claimed TV viewership is higher than average in the emerging BRIC economies, Brazil, Russia, India and China, and lower than average in many developed European markets
• North America and Europe appear to lag slightly behind other regions in the use of online and mobile video
• Connected consumers in Asia-Pacific are 45 percent more likely to use mobile video than the global average
• Claimed interest for Tablet PCs is highest in MEAP markets: Middle East, Africa and Pakistan. Connected Pakistanis are twice as likely as the global population to say they own or are interested in a Tablet PC.
• Connected Latin American consumers express above average interest in TVs with Internet connections. Online Consumers in Colombia, in particular, are very interested in acquiring this technology.

• Download “How People Watch – A Global Nielsen Consumer Report“

Hasker also appeared on Fox Business News on December 31 to discuss internet video, new devices and the measurement of media multitasking. [watch here]

Jon Stewart, Research Director, Technology & Search
and Chris Quick, Mobile Media Analyst, The Nielsen Company

SUMMARY: The mobile media landscape is primed for accelerated growth. Smartphone sales are predicted to lead the way, accounting for nearly half of worldwide sales by 2013. Mobile consumers around the world weigh in on the features, functions and data applications they find most desirable. The key driver of mobile growth is good devices and fast, affordable data. Understand what vehicles are most effective in reaching consumers.

Growing from a niche opportunity for games and ringtones, the mobile media landscape has flourished into a full-blown marketplace for advertising, rich media content, ecommerce and unparalleled utility—bringing about one of the biggest changes in the media and advertising business in a generation.

A perfect storm is imminent. The market is primed for accelerated growth well into 2010. What will “phone” mean to the next generation of consumers and what applications, functions and features are the most effective in reaching today’s consumers. A review of these opportunities reveals important insights into what is driving mobile growth in the U.S and abroad.

Apps-titude
Nielsen examined mobile media usage across 14 countries and discovered some interesting patterns. China has the highest penetration of software/application downloaders, ringtone downloaders, and mobile Internet users. At 89% penetration, text messaging is nearly as prevalent as voice services in Mexico, which is also the highest penetration of any media activity in any country analyzed.

Canada ranked first for content uploads and game downloads. The United States clicked into first place for picture messaging/MMS (multimedia message services) and location based/global positioning services.

Purchase criteria
Mobile consumers around the world applied different criteria when deciding what phone to purchase. Cost was the top factor across the board—especially influential among buyers in Turkey, South Africa and India. Brand or previous experience also weighed heavily among shoppers in Italy, Spain, Sweden and Russia. Ease of use was second most important factor for consumers in Germany, the United Kingdom and France. Design and style factored in for mobile users in Mexico, United Kingdom and the United States.

The features most desired by global mobile shoppers on their next purchase will be camera capability (number one in all 13 countries examined), followed by a built-in MP3 player and Bluetooth connectivity.

Growth drivers
In the fast-paced world of mobile media, the U.S. mobile subscriber base grew 7% to 277 million by the second quarter of 2009, which represented 221 million unique users, adjusting for multi-phone holders.

Among the many applications available on mobile devices, the fastest-growing segment in the U.S. was web video, which expanded by 33% to 20 million subscribers/15.2 million unique users, followed by multimedia messaging which jumped 29% representing 174 million subscribers/68 million unique users, and audio/application/game downloads which increased by 25% to 71 million subscribers and 39 million/27 million/23 million unique users per respective download.

Get smart
Perhaps more telling for the future of the industry, was the increase in the number of U.S. smartphone subscribers during the 2008-2009 Q2 period—a jump of 72% to 26.1 million users.

The Gartner Group predicts that smartphone sales will account for 46% of all mobile phone sales worldwide by 2013.

Currently, smartphone penetration varies by country. In Italy and Spain, more than one-quarter of new mobile handsets purchased were smartphones, with 28% and 23% market penetration respectively. The United States followed at 17%, Sweden at 13%, Canada-Germany-United Kingdom at 12% and France at 11%.

The newest generation of smartphones, like the Apple iPhone, the Palm Pre and the Blackberry Storm, combine cellphone connectivity with handheld computer capabilities like email, Internet, ebook readers, QWERTY keyboards, touchscreens, video, cameras and navigation software to name a few popular features and applications.

Dialed in
Smartphone owners in the U.S. tend to be male, younger (between the ages of 18–34), affluent (income of $75k+), and they use the phones for a mix of both personal and business purposes, with more emphasis on business usage. The profile of the iPhone user is similar, but skews even higher for the more affluent (twice as many in the $100k+ income group). A higher percentage of iPhone users also use the device for a mix of personal and business purposes (index of 160 for the iPhone compared to 220 for all smartphones).

One of the most appealing attributes of the U.S. smartphone owner, and particularly the iPhone user, is their appetite for data packages. All mobile subscribers spend $57.04 in billed services, with the monthly voice plan accounting for $35.40 and data extras adding $12.10 to the bill. Blackberry owners typically rack up $88.85 per month in charges, with $45.10 in voice plan costs and $28.20 in data extras. iPhone users spend nearly as much on data ($37.60) as they do on voice ($42.00) and have an average monthly bill of $89.35.

Surf city
Smartphone utilization underscores the point that, if you build a better browser and user experience, they will come. Almost 60% of all software/application downloaders were smartphone owners. More than half (55%) of all streamed music users did so using their smartphones. Smartphone owners also account for half of all active mobile Internet users, 41% of online game players and 38% of mobile instant messagers.

iPhone owners lead the way in media usage when it comes to mobile Internet (89%), text messaging (87%), software/application downloads and location-based services (75%), video/mobile TV (41%) and full track music (38%). The same market-leading usage pattern holds for iPhone’s built-in handset features like camera pictures (87%), Wi-Fi (77%) and speakerphone (72%). The sole exception is Bluetooth connectivity, where other smartphones feature a slightly higher utilization rate at 42% compared to 40% for the iPhone.

Transaction action
SMS (short message services), or text messages, reached 4.2 billion standard rate transactions in the U.S. on AT&T and Verizon in Q2 2009. The clear leader was Twitter with 1.3 billion messages, followed by FOX (due in large part to MySpace) with 740 million texts, Facebook at 465 million, and 4INFO at 257 million transactions. Total traffic was generated by 50 million unique users.

Stateside, social networking drove the growth train for mobile Internet, with a 187% increase in audience for the year ending July 2009. The distribution of 18.3 million unique social network users by the top three sites is Facebook (26% reach), MySpace (13% reach) and Twitter (7% reach).

Ad exposure
One-third of all mobile data users were exposed to some form of mobile advertising in Q2 2009. SMS and MMS comprised the two most popular forms of mobile advertising response. Roughly 16% of consumers responded to mobile ads most frequently via text message, a picture or MMS message, email or by visiting a designated web site.

Teenagers were the most accepting of mobile advertising—the acceptance rate declines as age increases. Perceptions of mobile ads were highest among all age groups if it lowered their bill. Consumers age 45+ were the least accepting of mobile ads. The Yankee Group forecasts mobile ad revenues could see faster growth than online, predicting a 60% jump in 2009 to $184 million. By 2013, that amount could reach in $566 million range.

Mobile marketing opportunity
Companies looking to drive sales should leverage mobile marketing activities like providing product information, coupons, discounts, event notification and mobile search. Another high-return approach would be to employ mobile’s innate capability to enhance the consumer interaction with a brand, providing information, inspiration or helpful functionality.

Companies who are finding success have developed specialized applications that were either fun or functional, scoring high on consumer engagement. Optimally, marketers will strike a balance between utility and enrichment, marrying the two into a unique, timely mobile consumer experience that makes best use of these dynamic devices.

Television
-Men typically watch less TV than women their age — with one exception: male teens actually watch more TV than female teens.  Men ages 18 to 34 tend to watch more cable and pay channels, while women gravitate to broadcast networks.

-When it comes to sports programming on TV, men 18-34 are more attentive viewers (+12%) than women of the same age.  But when non-sports programming is on, the reverse is true: males 18-34 are 6% less attentive than their female counterparts.

-In general, men 18-34 are less attentive viewers of both sports (-8%) and non-sports (-10%) TV programs than older men ages 35 and up.

-Men 18-34 are also more receptive to product placements within TV programming than females their age; they report 26% higher brand opinion improvement for advertisers integrated into TV programs.

Online
-Online streaming videos of full-length TV episodes hold the attention of men 18-34 much more than the same programs on TV.

-In general, men 18-34 view more Web pages each month than women their same age (2,353 vs. 2,305 in August 2008).  Men 18-34 also view 63% more individual video streams than women their age (1.4 million vs. 893,000 streams in August 2008).  For their part, women typically spend more minutes watching videos online than men (4.1 minutes vs. 2.4 minutes), who prefer short-form videos on consumer-generated media sites like YouTube. 

Mobile
-Male mobile subscribers ages 18 to 34 are three times as likely as average mobile subscribers to watch video on their phones, and twice as likely as average mobile users to access the mobile Web.

-In Q2 2008, male mobile subscribers ages 18-34 sent and received more than twice as many text messages (531 texts on average, per month) as phone calls (246 calls on average, per month), while women 18-34 made slightly more mobile phone calls than men their age (251 vs. 246 calls per month).


Video Games
-Men ages 18 to 34 averaged approximately 19 gaming sessions in August, with the average session lasting about 66 minutes.  Among all males, men 18-34 accounted for 35% of all minutes played on gaming consoles in August.

-In comparison, women 18-34 logged fewer gaming sessions in August (just over 10, on average), but — like their male counterparts — averaged about 65 minutes of play per session.  Women 18-34 accounted for 39% of all minutes played by females on gaming consoles in August.

In contrast, John McCain’s campaign has largely eschewed mobile marketing.  But that may just be the right strategy, according to Nielsen Mobile, which reported Monday that mobile advertising is a more efficient way to reach Democrats, rather than Republicans.

As of the second quarter of 2008, mobile media of all types were slightly more popular among Democrats, who were more likely than their Republican counterparts to use data services on their mobile phones, send text messages, or use mobile Internet, according to Nielsen.

View the full media alert.

Read coverage of Nielsen’s findings in MediaPost, Wireless and Mobile News, and Fierce Mobile Content.

But while mobile media use has grown rapidly in recent years, mobile advertising has been slow to take hold, Nielsen Mobile reported in a white paper released Tuesday.

In the U.S., some 76.8 million mobile users recall seeing advertising on their phones, according to Nielsen, but 63% report encountering mobile ads only infrequently — once a month or less.  Meanwhile, less than two-thirds of website homepage page views feature mobile advertising.

Lack of awareness of the size of the U.S. mobile audience, the complexity of the mobile marketing ecosystem, and advertisers’ reluctance to invest in mobile advertising are among the key factors restricting mobile ad growth, Nielsen’s analysts note.

View the full white paper.

Read MediaPost’s coverage of Nielsen’s findings.

Learn more about the outlook for mobile advertising – check out VentureBeat’s Q&A with Nielsen’s Senior Vice President of Mobile Media, Jesse Goranson