In late September, comScore released a report on app usage that highlighted some interesting trends that seemed to contravene prevailing wisdom about the mobile web; chiefly, that while growth in “time spent” in mobile apps eclipsed that of growth on the mobile web from June 2014 to June 2015, audience growth on the mobile web was double that of mobile apps in the same period. (It’s worth noting that comScores report precipitated a problematic follow-up report from Morgan Stanley.)
These data points seem to indicate that while the mobile web facilitates discovery, apps facilitate engagement. This is supported by the fact that just a handful of app developers receive the majority of all time spent on mobile.
While this conclusion isn’t invalid, there’s a larger fundamental aspect of the mobile app ecosystem that it doesn’t capture: that mobile is a winner-takes-all marketplace. In other words, whether or not discovery and conversion from the mobile web work (and surely the mobile web is capable of driving users into mobile apps), the companies that dominate the Top Grossing charts on mobile are spending lavishly on mobile marketing to the point that discovery produces only incremental revenues. Yes, time spent on mobile is increasing, but the number of apps that time is spent across is decreasing.
Does the traffic generated by mobile search help some apps? Of course. But does it now or can it ever help those apps in a way that can generate the kinds of meaningful network effects required on mobile to produce appreciable revenue? That is less clear.
The companies capturing the most time spent on mobile apps are all either 1) mobile native, with no significant presence on the mobile web or 2) had large existing desktop user bases when they launched on mobile:
But perhaps the best indication of how the value of the web for discovery is perceived by developers is where they spend their money to acquire users, which is predominantly in-app ads: eMarketer estimates that advertising spending on in-app ads will be three times as large as that on the mobile web in 2016.
Again, none of this is to say that discovery on the mobile web is nonexistent, or even trivial. It’s just not what is driving traffic to the largest (in terms of install base and revenue) apps. With the mobile web generating just 30% of revenue on mobile, every mobile developer’s most basic imperative is to drive traffic directly to its app. If traffic from mobile search converts into app users, then surely that is a good thing for developers. But relative to mobile in-app advertising, the mobile web is probably not a scalable and dependable source of traffic at the magnitude developers need to achieve significant revenues.