Mobile Traffic is Surging, But Monetization Lags Well Behind Desktop

Global mobile traffic is going through the roof, jumping from just 1 per cent of all online traffic in 2009 to about 10 per cent today, KPCB's (Kleiner Perkins Caufield & Byers) Mary Meeker concludes in her latest Internet Trends report. Mobile monetization is growing as well, but it is still far from delivering the far greater results now expected in the desktop world, according to the report.

Mobile accounts for 8 per cent of the e-commerce in the US, and mobile application and advertising revenue has jumped at a compound annual growth rate of 153 per cent since 2008 to $12bn in 2011, Meeker reports.

The problem with mobile though, and many companies are learning this the hard way, is that effective CPMs on mobile are five times lower than eCPM on the desktop. Desktop Internet averages an eCPM of $3.50 while mobile Internet generates an eCPM of just 75 cents. Moreover, the average revenue per user on mobile is anywhere from 1.7 to 5 times lower on mobile than desktop.

"Mobile is great. There is a transition that is going on right now," Meeker tells attendees at All Things D's D10 Conference.

"It may take a little while for mobile to get monetized as well as desktop," she says. "It's early and the screen is small and the ad units haven't really been rolled out effectively yet."

Despite these challenges, Meeker is confident that the mobile industry will get better at local and social, and make more money in the process. "I think the overall market for companies and monetization is really healthy," Meeker concludes.