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Apps still present significant opportunities for marketers

Apple App Store

As mobile continues to grow, marketers are beginning to explore emerging channels such as the mobile Web, video and social, but recent numbers from Apple point to the continued relevance of applications as a marketing vehicle.

Apple revealed this week that its App Store had more than two billion app downloads in December 2012 – a new record. In total, Apple reports that the App Store has seen 40 billion app downloads, with 20 billion of those taking place in 2012 alone, pointing to the growing popularity of apps with consumers.

“What we are seeing is the exponential growth of the app market, which is indicative of future growth,” said Josh Martin, director of app research for the global wireless practice at Strategy Analytics, Newton, MA.

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“We are moving into a era where content is being consumed through apps and not the open Web. We will see more of this as there is still opportunity for a lot more app experiences for the services and content that is out there,” he said.

Brand real estate
Marketers are embracing apps in a number of different ways, including corporate branded apps, campaign-driven apps and also as the focal point of new services for customers.

Apple reports that brands such as Major League Baseball, Autodesk and Marvel continue to expand their app strategies on iOS. For example, Autodesk now offers 20 apps to iOS users and has seen more than 50 million downloads.

Additionally, app developers continue to develop new services for iOS users, including Uber, which lets users request a private car in any city where the service is available. Other services include Flipboard, a social-network aggregation app in a magazine format, HotelTonight, which offers last minute hotel deals and AirBnB, which lets users find private apartments and other accommodations.

“Apps are extremely valuable to brands for several reasons,” Karl Stillner, CEO of Appolicious, Chicago. “They afford your brand real estate on the most personal device a someone owns - the phone.

“Simply having a prominent icon on a home screen provides value,” he said. “They also allow brands the ability to offer utility to users in non-conventional ways.

“REI's Snow and Ski Report application is a great example of an app that provides users huge utility around skiing conditions while building brand affinity with them. I get an alert every morning there is more than three inches of snow at my local ski resorts - that prompts me to engage with the REI application, and the brand, multiple times a week.

Ongoing engagement
While the app market is expected to continue to grow, marketers do face several challenges in crafting a successful app strategy.

For example, there is the continued fragmentation of the market and the need to decide which platforms to develop for. The numbers from Apple show that iOS still offers strong reasons why developers should make it one of their top priorities.

The growing number of apps also makes discovery an issue for users. In a recent assessment of leading application distributors, Microsoft beat out Apple when it comes to innovating the app discovery process (see story).

The growing selection also makes it that much more imperative for brands to deliver strong app experiences and keep them refreshed.

“Apps will continue to be a focus,” Mr. Stillner said. “However, brands will realize that their mobile apps will need to offer users more utility to ensure they return.

“The days of focusing on simply generating downloads are past; the next phase is ensuring ongoing engagement over time,” he said.

In-app advertising
Brands in retail, travel and financial services are likely to continue to invest in mobile apps because customers are likely to interact with these apps on a regular basis.

However, brands in other verticals need to make sure they offer users a reason to use them and that they are properly funded.

“You could probably count the number of successful apps launched by CPG brands on one hand,” said Bill Clifford, chief revenue officer at SessionM, Boston.

“We've seen too many instances where brands either create great apps and then run out of money to promote them, or they spend a ton of money promoting horrible apps,” he said.

“With more than 1.5 million apps available to download, and that number is still growing, it's an incredibly ambitious and expensive endeavor to successfully launch an app. And once it's downloaded, it's increasingly difficult to retain users.”

In some cases, it may make more sense for brands to take advantage of the significant growth in apps by partnering with an existing app or investing in in-app advertising.

“Instead of building apps, brands are becoming smarter about partnering with existing apps, either through direct integrations or by taking advantage of innovative new in-app advertising solutions that scale,” Mr. Clifford said. “Ultimately this paid media will drive users to a rich mobile Web destination.”

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Content, mobile applications, Apple, Strategy Analytics, Josh Martin, Appolicious, Karl Stillner, SessionM, Bill Clifford, mobile marketing, mobile

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