As smartphones proliferate, the increasing popularity of mobile applications is getting hard to ignore, especially if you're a brand marketer. Among iPhone and Android device owners, app usage rivals, if not exceeds, browser-based web access. This hunger for apps has upped the ante for marketers. Much as consumers expect brands to show up in the top 10 search results for relevant branded and generic search terms, there is similarly a growing expectation on the part of mobile users that their favorite brands will offer an app-based mobile experience. Not surprisingly, an overwhelming 65 percent of marketers and publishers responding to a December 2009 survey from DM2PRO and Quattro Wireless reported that they plan to invest in mobile apps this year.
Newcomers will be entering a crowded field. Between mobile device manufacturers and operating system (OS) platforms, carriers and third-party independent storefronts, there are more than 30 app stores vying for customer attention around the world. The six largest mobile device manufacturer/OS app stores alone now contain close to 200,000 apps, and that number continues to grow quickly, according to a study presented by Dutch app store analytics firm Distimo at the recent Mobile World Congress 2010 in Barcelona.
With the number of apps multiplying seemingly exponentially, in both app stores and on users' smartphones, apps themselves now require significant marketing support in order to ensure that mobile users can find them. Marketers need to adopt a multi-pronged approach to ensure not only app discoverability but also downloads and retention.
First and foremost, marketers planning on creating an app for their brand need to ensure it satisfies a consumer need, but in a way that also reinforces (and stays true to) the brand's values. An app can succeed by being fun and frivolous, such as Zippo's virtual lighter for the iPhone, which has exceeded 3 million downloads, or by making consumers' lives easier, or -- ideally -- by combining entertainment, social communication, and utility into a single engaging experience, such as the Dunkin' Donuts Dunkin' Run app.
Ensuring discoverability and enticing users to download the app are just the first challenges. In a recent interview with eMarketer, Paul Dolegowski, vice president and director of interactive marketing and brand technology at Brown-Forman, maker of popular liquors such as Jack Daniels, Southern Comfort, and Finlandia vodka, underscored the importance of marketers using all available media -- TV, print, radio, search, web, and social media -- to promote their mobile apps. "People have to become aware of the mobile app, which is difficult to do if the app is a standalone," he noted, adding that "we email our database, use search marketing campaigns, and generate some kind of awareness via TV or print to drive traffic."
Search engines now index iPhone apps, so proper optimization for the engines and social media can help in driving interested users directly to the right place in the App Store. This approach can complement the more limited keyword tagging permitted by the app storefront itself.
Furthermore, there is increasing evidence that mobile users have begun to treat apps like any other product, and that shift in behavior extends to the way they find apps and their reasons for choosing the ones they download. Consequently, as with other products, recommendations and reviews factor heavily into their decision-making.
According to Compete's "Q3 2009 Smartphone Intelligence Survey," 34 percent of smartphone owners who downloaded an app said they relied on a recommendation from family members, friends, or co-workers, while 30 percent said they looked at the highest-rated apps and 17 percent conducted additional research to discover which apps were the most popular. In other words, as mobile consumers spend more time looking for apps, the discovery process is becoming increasingly social.
In my previous iMedia column, I highlighted two apps -- Appsfire and Chorus -- that play into the social discovery process. Appsfire allows users to create and distribute lists of their favorite apps via email or social networks, while Chorus combines user and expert reviews with social networking features, providing recommendations based on a user's download history and visibility into friends' app collections. Put another way, as recommendations begin to drive app usage, apps must be included in a brand's social media strategy and vice versa.
Engaging and retaining users over the long term can be an even trickier proposition. In its January 2010 "Smartphone Industry Pulse," mobile analytics firm Flurry found that both iPhone and Android apps retained around 40 percent of users in the first month after download. However, retention dropped precipitously to around the 15 percent mark in the second month and then fell more gradually to 5 percent by the sixth month. To keep things fresh and to keep your users engaged, updates should be an integral part of your app strategy, much as it would be with any other product.
Part of the secret to engagement comes from an app experience that plays up the most desired aspects of a brand. For example, the VW Group has used iPhone apps to help launch two recent models that are core to its U.S. business -- the Audi A4 and the Volkswagen GTI. As Jeri Ward, Audi's general manager of marketing and strategy, told eMarketer in an interview last year, "I think apps are a direct link between how Audi's viewed as a brand as being innovative and pushing into new technologies." In other words, sometimes an app just works for the brand.
In both cases, the apps offer users the chance to experience the thrill of driving the vehicles on a track -- something most consumers, even those who buy the cars, will never have. Turning the driving experience into a game is a savvy move because it appeals to not only the brands' primary audience (and plays into some potential motivations for purchasing the vehicles) but also the far larger audience of gamers who might be inspired to engage with the brand for the first time. In short, the Audi and VW apps are more than just smart marketing vehicles for highly coveted vehicles; they are also great examples of brand extension into a medium that aligns closely with the brands' image and values.
If you're a media brand with highly sought-after or exclusive content, you can even use apps to generate revenue. This is easier to do if your audience has not grown accustomed to getting your content for free (a challenge many media outlets now face). However, the prospects are better on mobile than on the desktop because there is at least some consumer expectation of paying to access premium content, especially if packaged into an app in a way that enhances the viewing experience.
CNN's $1.99 iPhone app is a case in point: It combines the up-to-the-minute news content people have come to expect from CNN with an interface and streaming video capabilities optimized for the device. Since its launch last September, the app has consistently ranked among the top paid apps for the iPhone. Flurry has found that news applications consistently rank at the top of the list for both short- and long-term retention as well as frequency of use.
Sports franchises are a complementary example. In traditional media, namely television, they depend on media outlets for coverage (and indeed, that is where they generate the bulk of their revenues). However, in the online and mobile worlds, some have had considerable success by selling access to games directly to consumers. Major League Baseball (MLB) built live-game online streaming into a $40 million business in 2009, and sales of its live-streaming At Bat iPhone app likewise proved highly popular. Sales of the $9.99 app topped the $1 million mark early in the season. MLB At Bat will return this month for the 2010 baseball season with additional enhancements, at a cost of $14.99.
The shelves in app stores might be increasingly crowded, but brands still have a ways to go before they truly get in front of consumers. Razorfish's November 2009 "FEED: Digital Brand Experience Study" found that only 24 percent of U.S. internet users had downloaded a branded application. Apps that fill a niche, satisfy needs, and remain fresh and relevant will drive those figures up, especially if they receive an appropriate level of marketing support. To paraphrase "Field of Dreams," if you build it (and it's findable and good), they will come (and some will even pay).
I'll be talking more about the "app-ortunity" for brands at the upcoming iMedia Breakthrough Summit on March 21. Please join us if you can!
Noah Elkin is a senior analyst at eMarketer, where he covers trends in mobile marketing, content, and commerce.
On Twitter? Follow Elkin at @noahelkin. Follow iMedia Connection at @iMediaTweet.
