Consumers who access the Internet from their mobile devices to search for local businesses are more likely to go into retail stores and make purchases, according to research from Neustar, a provider of real-time information and analysis.
In fact, local business searchers using their smartphones are likely to buy something as a result of their searches 77 percent of the time. For tablet users, the odds were slightly higher—at 78 percent—and skewed toward more expensive purchases.
Neustar further reports that the total number of visitors to search navigation sites via mobile phones has jumped by more than 25 percent, from 90.1 million in March 2012 to 113.1 million in December 2012. Growth was at 19 percent for tablet users during the same time period.
In fact, business searches are the number one activity for which consumers use their smartphone browsers, according to the research.
Nearly 86 million people in the United States alone now seek local business information on their mobile phones, and 56 percent of those who use search sites primarily to get local business information do so on a weekly basis across all devices, the research found.
Additionally, application-based local searches nearly doubled in the past two years, significantly outpacing text messaging and browsers.
This is happening not only because more smartphones and tablets are in circulation, but also because more people are using those devices to conduct searches, and they're spending more time on each search because there is so much information readily available, explains Brian Wool, vice president of content distribution at Neustar.
Additionally, application-based local searches nearly doubled in the past two years, significantly outpacing text messaging. Use of text services—where a user sends a text message with his current location and the type of business he wants to find to a service provider that sends back lists of applicable businesses—increased from 10.5 percent in December 2010 to 16 percent just two years later. Mobile search app usage increased by 87 percent during the same time, and makes up 54.4 percent of all searches today, up from 29 percent in December 2010.
"There's been a real explosion in the number of apps in general, but specifically in local search apps," Wool says.
Another change is in the types of apps available. "A few years ago, there were very general search apps, like MapQuest, where everyone would go," Wool says. "Today there are apps that are very specific to individual verticals."
Of those who used search apps, 35 percent use Google Maps.
And 92 percent of those who used social networking sites to search for local businesses turned to Facebook for that purpose.
All of this means that businesses are essentially going to have to rethink the way local customers are going to find them. First, they'll need to make sure that the information these services and app providers have about them is up to date. Then, they'll need to provide their locations, hours of operation, and services offered, Wool says.
They'll also need to match their business to the types of apps that are available. "If you're a restaurant, you'll want to be on Yelp. If you're a hotel, you need to be on TripAdvisor," he adds.
A similar study by Chadwick Martin Bailey found that restaurants topped the list of the most searched industries by consumers through both mobile apps and browsers. According to that research, 81 percent of consumers had searched for a restaurant on a mobile app and 92 percent through a mobile Web browser in the past six months. Seventy-five percent said they often choose restaurants based on those search results.
To reach these consumers, restaurants should post their menus online. The research found that 80 percent of consumers think it is important to see menus before they dine at restaurants, and 62 percent are less likely to choose restaurants if they can't scan their menus on their mobile devices prior to stepping inside.
It also makes sense, then, for restaurants and other local businesses to advertise on social and mobile search sites, a trend that is already starting to develop. Consulting firm BIA/Kelsey expects social advertising's local penetration to increase steadily through 2017 as social networks make it easier for companies to launch and manage local targeting campaigns.
BIA/Kelsey projects a 26.4 percent compound annual growth rate for locally targeted social ad revenues through 2017, up from the current level of $1.1 billion to $3.6 billion by 2017.
Social networks are evolving their advertising to improve performance based on these trends, according to Jed Williams, senior analyst and director of consulting at BIA/Kelsey. Principal drivers of market growth will be native social formats, including video, and mobile social advertising, he explains.