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Summary:

There’s a reason why search companies, advertisers and local merchants are so interested in smartphones. It’s because they’re turning out to be a powerful tools for people looking to search locally, act quickly and improve their shopping, according to a smartphone user study commissioned by Google.

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There’s a reason why search companies, advertisers, payment processors and local merchants are so interested in smartphones. It’s because they’re turning out to be powerful and popular tools for people looking to search locally, act quickly and improve their shopping experience. That’s the conclusion of a new smartphone user study commissioned by Google .

Google obviously has a big stake in these results, which were culled by research firm Ipsos OTX from 5,013 U.S. smartphone users at the end of 2010. But the numbers underscore why Google, Facebook, and Groupon — as well as a host of marketers, app makers and merchants — are so hot for smartphones. It’s because they really do fit certain use cases that unlock money-making opportunities.

The survey found 95 percent of smartphone users have looked for local information, with 88 percent of these users acting on information within one day, most often contacting or visiting a business. This is consistent with other survey results, and it really brings home how intent-driven users are when they search on a phone. They are often looking for something specific, and they’re ready to move quickly. That’s a huge opportunity for merchants and brands to get in front of users who are on the cusp of making a purchase decision. As we’ve noted earlier, Google is already seeing great results with its click-to-call feature in local search ads, which leverages this behavior.

The key point? Smartphone users are ready to take actions: Nine out of 10 smartphone searches end in an action. And search engines are the most commonly visited websites at 77 percent, ahead of social networking, retail and video sharing.

Smartphones are playing a growing role for shoppers, who are wielding them to find deals, pull up research and locate businesses. The survey found 79 percent of respondents used their smartphones for shopping, and three out of four smartphone users made purchases either in store or online using their phones. Seven out of 10 smartphone users turn to their phones while shopping in a store, showing the phone is often in use from the time research begins until the moment a purchase is made.

The survey also found smartphone users spent a median of $300 on purchases in the past year through their smartphone. This is consistent with other news we’ve heard. For example, eBay said global mobile sales hit $2 billion last year, while Scanbuy reported mobile barcode scanning activity was up 16x in 2010 over 2009. This also points to the growing importance of mobile payments, which will be a big battleground for players like Square, PayPal and others.

For advertisers, the smartphone is providing a new chance to reach users who are often ignoring online ads. Seventy-one percent of users conducted a search based on an ad exposure, and 82 percent notice mobile ads, with half  taking some kind of action, most often making a purchase (49 percent) or visiting a website (35 percent). This is consistent with what I’ve been hearing from mobile ad executives, who say mobile ads are a new opportunity because they’re more effective and memorable, particularly more rich mobile ads.

Overall, the survey highlighted how wedded people are to their smartphones. Ninety-three percent of people use smartphones at home, with 39 percent admitting to using their smartphones in the bathroom. The study found 72 percent of users used a smartphone while consuming other media, including a third who watched TV.

That’s what makes the smartphone so potent. It’s with people at all times, and it’s a versatile tool in the hands of consumers, who are only going to use them more and more. The implications for retailers, merchants and advertisers is huge. They need to optimize sites for mobile, make themselves visible to mobile phone users, consider launching mobile apps, and figure out how to engage this mobile audience, because they’re much more informed and active than previous shoppers. For many merchants, it increasingly makes sense to formulate multi-channel strategies that cover mobile, social and in-store campaigns. The smartphone is changing everything, and businesses need to catch up if they want to take advantage of all this upheaval.

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  1. These findings are certainly interesting, especially when paired with the projected smartphone penetration numbers. With this kind of data backing up local search and commerce via smartphones, I think we can expect lots of cool new innovations across the board!

  2. So true! We offer a local retail inventory and availability API and are seeing the same trend of consumers moving to apps (vs traditional search).

  3. Dan Chmielewski Wednesday, April 27, 2011

    Local search engines like Local.com are more than local search sites; you can get coupons, check out the ratings and reviews of a local business and find out about events related to your search. The NY Times had a story about the shopping apps for Smart Phones being hard for users to actually use. Local search from your phone’s browser is an easier way to go.

  4. Local mobile advertising is emerging as an area where the advertising is something the users want rather than have to endure. There is value for all the stakeholders involved – users, advertisers and local app developers as well as platform providers such as Google or Apple. This is one area where high valuations are truly deserved.

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