IPG Media Lab set out to answer the million-dollar question: Is the willingness to pay for iPad apps driven by the early adopter audience or the form factor?
At this year's Breakthrough Summit in Rancho Mirage, Calif., speaker Brian Monahan told audience members the basic question behind his company's recent study: What is motivating consumers to adopt iPad technology into their lives? Monahan, EVP and managing partner at IPG Media Lab, then revealed the results of the research his company conducted in partnership with Hearst's "Let Me Know" (LMK) app.
The LMK app is a "super app" -- essentially, it is a hub from which a user can follow his or her various passions. According to Hearst, "LMK curates and delivers the most up-to-date content on any important person, place, or thing." Launched in the fall of 2010, it is rife with marketing and partnership opportunities, making it a perfect fit for the IPG Media Lab.
To find their data, Monahan and his colleagues created an online survey in the summer of 2010. The audience consisted of 116 iPad users, 204 iPhone users, and 601 users of the Droid or any other smartphone. The only screening criteria were that those surveyed needed to own and use either an iPhone or an app-supported device.
What they found was that consumers are undeniably paying more for iPad content. A whopping 76 percent of iPad users' applications are paid for, nearly double that of iPhone and other smartphone users. In addition, iPad users buy more apps in almost every category. They are five times more likely to use subscription apps. In addition, they pay much more than iPhone and other smartphone users for content: iPad users pay $30 for magazines (compared to $13 for both iPhone and other smartphone users) and $25 for newspapers (compared with $10 and $12, respectively).
Monahan also explained what these data means for marketers. Regarding the iPad users' 13.5 app average, he said, "If we want to go down the route of branded apps, we're fighting for one of 12 slots."
Studies like this are essential to understanding why the iPad appeals to consumers and where this new platform falls with regard to mobile devices. The way consumers are making commercial decisions is rapidly evolving into an experiential method. They are leading media-filled lives and are drawn to "meaningful, relevant, and beautiful content." It is from this new paradigm that the iPad is emerging.
"iPad apps are the poster child for sub-scale media," Monahan said. "They're basically the raft of ad-supported business trying to make a go of it. What's their business model going to be?" Will the iPad business model be a network model or a commerce model? What about a custom content model? Will there be room for brands? According to Monahan, everyone in the marketing industry has a stake in how these questions get resolved.
Lucia Davis is associate editor for iMedia Connection.
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