There’s Gold in Mobile: Mary Meeker’s Latest Look at the Mobile Internet

If there is a simple takeaway from Mary Meeker’s latest analysis of Internet business trends it is this: tremendous opportunity exists for mobile monetization.

But it may not be a straight line between here and there. Just ask Facebook, where a surge in mobile use slowed revenue growth as the social pioneer shows fewer ads in its mobile news feed.

Meeker, a partner at Kleiner Perkins Caufield & Byers, gave the latest of her famed Internet slide presentations today at the AllThingsD D10 conference. It was a gargantuan slide desk, 112, to be exact.

But it is a journey worth taking. Let’s start with the opportunity:

Mobile traffic is on the rise. Ten percent of all Internet traffic now comes from mobile devices, such as smartphones and iPads. And growth is increasing. Mobile traffic in India this year surpassed desktop traffic for the first time.

It stands to reason then that the ad opportunity in mobile is huge. Mobile media consumption is now 10% of all media consumption, Meeker points out. But mobile ad spending is only 1% of the market. Obviously there is plenty of room for expansion.

The bad news is that mobile advertising CPMs are almost one-fifth of those for ads sold on the desktop Internet. Pandora suffers from this gap. So does Zynga, Google and, of course, Facebook. But this could change.

To make her case, Meeker turned to Japan, where GREE, a mobile gaming company, has seen its average annual revenue per mobile user rise. It rose to an astonishing $24 in the first quarter.

It might be worth pointing out that Japan has among the world’s highest 3G penetration, at 95%, so the available audience is huge. (Korea follows at 85%, Australia, 76%, and Sweden, 73%. Penetration is relatively strong in the United States at 64%. Trailing are Germany at 36%, and France, at 45%.)

You will find all these details in the slide deck. But I digress.

The point is you can get attractive monetization in economies where mobile use is high. Consider another Japanese game maker, CyberAgent. It gets greater average revenue from its mobile subscribers than its desktop subscribers, Meeker points out.

So the question becomes where is mobile growing? Just about everywhere. Only 18% of mobile users are 3G customers, so the market has lots of room to run. And run it is. China is seeing 3G subscriptions grow 115% year over year and in India, a phenomenal 841%.

Attractive monetization also may come from e-commerce, but it is less clear at this moment. In the United States, mobile e-commerce accounts for 8% of all e-commerce, Meeker points out. That share has been growing strongly, but fell in the past quarter, suggesting that it is a trend worth keeping an eye on.

What is clear nonetheless is that the world it not standing still.

Today 953 million smartphones are in use, but only make up a modest slice of all 6.1 billion mobile phone subscribers. And there is no lack of interest in these new devices. The sell-through of Apple’s iPad has been three times as fast as its iPhone. The adoption of phones with Google’s Android operating systems is even more amazing. Growth is proceeding at four times the pace of the iPhone.

So the world will look a good bit difference even a year from now.

Photo courtesy of Shutterstock.

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