Morgan Stanley: No, Apps Aren’t Winning. The Mobile Browser Is.

Last week, comScore released its Mobile App Report, which we covered. The report contained many interesting findings, but its big takeaway was this: Consumers spend the majority of their mobile time with a very few heavily used apps.

There was also an interesting and important mobile-browser story in the report I neglected to tell. Morgan Stanley subsequently presented it in a research note that plays up mobile browser usage — and Google, by extension.

Characterizing the browser as the ultimate mobile app, the firm cites its own research and comScore data for the proposition that “US mobile browser audiences are 2X larger than app audiences across the top 50 mobile web properties and have grown 1.2X faster over the past 3 years.”

Mobile web vs. app traffic for top 50 mobile properties

Source: Morgan Stanley rendering of comScore data

The research note is designed to combat the perception that the mobile Web is anemic or in decline (and by extension, Google). It’s not. As the data show, mobile browser usage is growing faster than apps and delivering larger audiences for most publishers. For some time, we’ve been talking about the importance of the mobile Web and the interesting reach (browser) vs. engagement (apps) dichotomy.

Morgan Stanley points out that only 12 of the top 50 mobile properties have more traffic coming from apps than the browser. The discussion argues for the primacy of the mobile browser for most publishers, brands and marketers.

As a practical matter, Morgan Stanley is absolutely correct. Most publishers will see the bulk of their traffic from mobile browser usage and not apps. The reason isn’t because the browser is somehow superior or that the “open internet must win.” The browser drives more traffic because consumers are highly selective about apps.

Mobile app traffic exceeds the browser in only a few cases

Source: Morgan Stanley, comScore

Because of smartphone memory constraints and the mediocre quality of most apps, users are only going to download and engage with a small fraction of the apps on the market. For example, I may have one or two retailer apps on my phone (e.g., Amazon), though I shop at many more stores. My choices are tied to frequency and loyalty; I’m not going to download 10 different retail apps. Instead, I’ll use search and the browser to find information from retailers I’m more casually invested in.

Unable to deliver compelling experiences and disappointed by a lack of traction, many retailers have turned away from apps and toward the mobile Web. It’s also becoming more costly to acquire app users who may quickly churn anyway. (Here the positions of Google and Facebook are reversed, with Google positioning itself as the lower-cost alternative for app-install ads.)

It’s important to be clear that mobile apps aren’t appropriate for every merchant or marketer. The apps vs. mobile browser discussion is really about audience segmentation and user behavior patterns. As a crude generalization, the browser is for more casual audiences and apps are for more frequent and loyal customers.

I think this apps vs. browser argument is so charged partly because it’s a surrogate for Apple’s and Google’s competing visions for the mobile internet. These dueling positions have zealous detractors and partisans.

Putting aside “ideology,” marketers need to have a clear view of what approach makes the most sense for them based on a realistic understanding of the customer and her behavior and usage patterns. It’s time to end the browser vs. apps “or” debate; it’s really about “and.”