As mobile devices become more ubiquitous, the way people access the internet is changing.
The world has shifted dramatically from laptops to smartphones in recent years as people switch to using mobile devices as their main mode of internet connectivity. The old practice of logging onto a desktop computer to connect to the internet seems relatively archaic in this new era of mobile
tech
.
Indeed, Forbes went so far as to name
2015 the year of mobile web
, and mobile web browsing
outpaced desktop browsing
for the first time in 2016. What’s more, according to
a post on Oberlo
, as of early 2020, 52.03 percent of global website traffic came from mobile devices versus just 4.7 percent in March 2011.
Nicknamed the Web 3.0, the mobile web refers to using the internet via a mobile phone or wireless connection on a handheld device such as an iPad. But what should investors know about the mobile web? Below we run through what it is, why it’s important and where the space is headed.
Using the mobile web
While mobile devices were once used for brief internet surfing on the go, today they have emerged as the primary screen for most people. That means people are more likely to turn to their smartphones than to their laptops or desktop computers.
Use of mobile web technology has steadily increased since 2009,
the Guardian notes
. As mentioned, mobile web browsing outpaced desktop browsing for the first time in 2016.
Aodhan Cullen, chief executive at StatCounter, told the news outlet at the time, “This should be a wake up call, especially for small businesses, sole traders and professionals, to make sure that their websites are mobile user friendly. Many older websites are not.”
He continued, “Mobile compatibility is increasingly important not just because of growing traffic but because Google favours mobile-friendly websites for its mobile search results.”
Cisco states
that globally, mobile website traffic will reach 77.5 exabytes per month by 2022, up from 11.5 exabytes in 2017. For reference, that’s the equivalent of watching 19 billion DVDs each month.
Looking further at the numbers, data from Cisco reveals that mobile data traffic will grow sevenfold between 2017 and 2022, which translates to a compound annual growth rate of 46 percent.
Even more revealing, global mobile data traffic will grow two times faster than fixed IP traffic during the same period, while traffic will be equivalent to 113 times the volume it was in 2012. As such, the switch to the mobile web isn’t a passing fad; instead, it’s the new frontier of internet use.
The companies that are poised to succeed in this new epoch of internet usage are those that are capitalizing on the uniqueness of the mobile experience.
The case of Snapchat (NYSE:
SNAP
) is a good example. Unlike its social media predecessors Facebook (NASDAQ:
FB
) and LinkedIn, which were both designed to be used on desktop computers and fixed-line laptops, Snapchat has only ever existed as a mobile application.
Snapchat’s success was quickly apparent when it
officially began trading
on the New York Stock Exchange in March 2017. It was worth roughly US$25 billion, more than Twitter (NYSE:
TWTR
) at US$14.08 billion. As of mid-2020, Snapchat was still outpacing Twitter with a market cap of nearly US$32 billion.
Mobile
gaming
is also taking the stage by storm. In 2019, mobile games accounted for
60 percent
of the overall global video game market, generating US$49 billion in revenue. The mobile gaming market is projected to reach US$56.6 billion by 2024.
Marketing a key arena for the mobile web
Snapchat’s value rests primarily in its ever-increasing advertising revenue. The strength of this model reveals another key feature of the mobile web: its revolutionary impact on marketing. New ways of collecting and organizing data have allowed targeted ads to supersede conventional forms of marketing, transforming companies’ means of generating user engagement and loyalty.
The growing exposure of internet ads is expected to increase global ad spending from companies that want eyes on their products. However, the current COVID-19 pandemic has firms like Zenith Media adjusting their forecasts for digital ad spending — the research firm expects overall global ad spending to
retract by 9.1 percent
in 2020, although it’s projecting a 5.8 percent recovery for 2021.
Zenith sees trends such as ecommerce, data-driven personalization and digital acceleration driving global ad spending. In fact, digital advertising is expected to increase to 51 percent of total global ad spending in 2020 and 55 percent in 2022.
Glu Mobile (NASDAQ:
GLUU
) and Engagement Labs (TSXV:
EL
,OTC Pink:ELBSF) are all small- to medium-cap players making a big impact in the field of mobile marketing. By incorporating big data, analysis and mobile user interaction, these innovators have tapped into a new market unique to the mobile web.
For investors, mobile web companies are certainly becoming attractive portfolio additions. With an ever-expanding user base and innovative tech companies making the most of the medium, there are numerous opportunities in this space. Mobile marketing in particular is a strong area of growth.
And if that isn’t compelling enough, the near-infinite number of apps on the market almost guarantees that every investor will be able to find something in the space to get excited about.
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This is an updated version of an article first published by the Investing News Network in 2016.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.