New Research: Mobile Advertising Driving Purchases at Unprecedented Rate

New Research: Mobile Advertising Driving Purchases at Unprecedented Rate

Ongoing study from AOL and University of Virginia School of Engineering and Applied Science Sheds new Light on Cross-Platform Media Consumption

New York, NY, August 14, 2013. AOL, in conjunction with the University of Virginia School of Engineering and Applied Science (SEAS), today announced the first set of findings from an ongoing research effort seeking to better understand how consumers engage with content across multiple devices. The findings are based on analytics derived from more than 500 billion online ad impressions and 100M "conversion events" across all devices – such as mobile phones, desktop computer and tablets - representing the industry's largest cross-platform study conducted to date.

Mobile Devices Driving a Substantial Percentage of Overall Conversions
AOL and the SEAS examined conversion data across travel, retail, auto, and telecom. The data revealed that consumers are purchasing more goods and services from their mobile devices than previously thought. Nearly a third (31%) of conversions across the four verticals occurred while on a mobile device. Moreover, mobile conversions have grown quickly: over the past year, the cross-industry conversion rate for mobile grew 28%. The industries with the highest mobile conversion rates were telecom at 37% (purchasing of new plans and devices) and retail at 35% (making a purchase). Auto was next at 22% (finding a local dealer, requesting more information, configuring a car and travel) and travel at 20% (booking a hotel, flight or car reservation.)

Has Mobile Become the New "at-home" Device?
The rapid growth of mobile conversion rates may be due to a couple of factors. First, as a society, we are now spending a significant amount of our total "digital time" at home using mobile devices: according to the data, consumers now spend 25% of their total digital time at home on tablets or cell phones. Moreover, 75% of all mobile ad impressions were viewed within the home. This finding runs counter to the prevailing wisdom that we spend the vast majority of our time interacting with mobile devices while outside the home, such as waiting in line at a cafe. The data suggests that, as our activity increases on mobile devices at home, so too does our propensity to purchase products and services from them.

The iPad is the Dominant Device for Mobile Conversions
The second factor that appears to be contributing to mobile conversions is the widespread adoption of the iPad. Two thirds (65%) of mobile conversions were on tablets, with 85% of tablet conversions coming from iOS devices (iPad.) Android and iOS devices each accounted for roughly 50% of conversions on smart phones.

What this Data Means for Marketers
Historically, advertisers have focused their mobile efforts either on branding or driving the purchase of mobile-centric offerings such as mobile game apps. The results of this study point to an untapped opportunity to drive conversions for a much wider array of products and services via mobile.

"What we're learning is that consumers are increasingly using their mobile devices in much the same way they do with their computers when they're at home," stated Chad Gallagher, Director of Mobile at AOL Networks. "And, with a quarter of all digital time spent on smartphones and tablets at home, marketers are realizing that they can't afford to run desktop-only campaigns anymore."

Gallagher added, "We are just getting started in analyzing all of the data. The next phase of the study will focus an eye towards better understanding cross-device behavior, with the ultimate goal of understanding how behavior on one device effects conversion rates on a secondary device."

"Our students get hands on, real world experience working with a company like AOL analyzing mobile data to help drive real marketing objectives," noted William T. Scherer, professor with the Department of Systems and Information Engineering at the University of Virginia. "What's exciting about this research is that we're beginning to get a much clearer view of how consumers are interacting with Internet-connected devices."

Partnership and Methodology
The partnership between the SEAS and AOL was formed by Professor William Scherer, Department of Systems and Information Engineering in the School of Engineering and Applied Science, and his former students Scott Ferber and Chad Gallagher. Ferber is founder of Advertising.com, acquired by AOL in 2004. Current Engineering School undergraduate and PHD students, under the guidance of Scherer and a few AOL Networks executives, are continuing to explore data gathered from media campaigns. The first set of findings – discussed in this release –are based on 500 billion impressions served by AOL Networks during portions of 2012 and 2013.
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About AOL
AOL Inc. (NYSE: AOL) is a brand company, committed to continuously innovating, growing, and investing in brands and experiences that inform, entertain, and connect the world. The home of a world-class collection of premium brands, AOL creates original content that engages audiences on a local and global scale. We help marketers connect with these audiences through effective and engaging digital advertising solutions.

About AOL Networks
AOL Networks enables the world's top marketers and media brands to reach consumers across desktop, mobile, tablet and connected TVs with impact through premium experiences, programmatic buying and performance driven campaigns. It is the global partner of choice for leading publishers, advertisers and agencies seeking to maximize the value of their online brands. AOL Networks brands include Advertising.com, The AOL On Network, Be On, ADTECH and Pictela.

Media:
Jen Reidy, (415) 891-8300
Jen@reidycommunications.com


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