The end of the web as we know it

The web of the future may not be the web at all.

If we didn’t have enough evidence that the desktop-based online economy is not-so-slowly giving way to the mobile one, there’s this: Facebook last week reported 59 per cent of its US$2.27 billion in advertising revenue during its most recent fiscal quarter came from mobile ads, up from 30 per cent in the same period in 2013.

The increase is notable given Facebook only began bringing in mobile ad revenue two years ago, and it’s largely tied to similar increases in mobile-only usage. Of Facebook’s 1.276 billion monthly active users (MAUs) in Q1 2014, 1.008 billion – or 79 per cent – were mobile MAUs, and 341 million, or 26.7 per cent, were mobile-only. In the year-ago period, Facebook’s 751 million mobile MAUs represented 67.7 per cent of its then-1.110 billion total, and the 189 million mobile-only users were barely 17 per cent of its overall user base.

Only one of many

Facebook is hardly alone in the rapid transition of traffic – and revenues – away from the desktop. Over 75 per cent of Twitter’s $220 million advertising revenue in its most recent quarter was mobile-based. In October, that metric was only 65 per cent.

The experience of social media’s two leading brands echoes traffic trends across other online properties, where the dominance of browser-based usage is being eclipsed by mobile users accessing content – once available exclusively through a browser – via mobile-friendly websites and, increasingly, smartphone- and tablet-based apps. ESPN’s mobile traffic surpassed desktop visitors for the first time late last year, while CNN reported hitting 40 per cent mobile in January.

The transition has significant implications for all businesses regardless of sector, as it means mobile apps, once considered secondary investments to traditional web-based resources, have now become primary sources of traffic and revenue. It also has implications for the types of data being harvested from different types of users. Mobile apps present a richer data stream for advertisers and partners, as they can include more data points – including full registration details captured within the app, and GPS-provided location information – than standard web browser-based interaction. That additional data can either be used to directly engage visitors or sold to third parties.

No free ride

For business marketing to remain relevant, it must follow an increasingly mobile-enabled audience. That transition doesn’t come without fresh pitfalls, however, as Apple and Google each take a 30 per cent cut of any revenues generated within the mobile apps on their respective iOS and Android platforms. The two companies also act as gatekeepers, and can revoke access to their online app stores if the titles don’t meet specific requirements. While the limitations aren’t insurmountable, they place limits on a company’s ability to fully control its online presence that simply aren’t on the table with traditional web-based properties.

An app-first strategy can also place greater pressure on already-overburdened technology budgets as developers struggle to create and maintain unique versions of their apps for each major mobile platform. While a mobile-specific or responsive website – one that adapts on-the-fly to the device being used – can just as easily run on any desktop or mobile browser, dedicated apps must be built and tested for each operating system, screen resolution and related environmental variable. This added technological overhead can stretch timelines, reduce business agility and drive costs up.

Advertisers will also be challenged to deliver their messaging through an increasingly heterogeneous landscape, often having to strike deals with individual vendors or distributors instead of using the one-size-fits-all web. It’s a stark reminder that as audiences accelerate their move away from the traditional web, businesses are left to pick up the pieces and count the mounting costs.