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Apple's iAds with digital rewards deliver 12x higher click-through rates than standard offers

Apple's iAd campaigns that offer users a digital reward generate click-through rates as much as 12 times higher than those offering a standard discount such as a percentage off for a purchase, according to a new report from Ifeelgoods.

Marketers are increasingly considering offering users digital rewards such as credits from iTunes, Amazon, Facebook and others to encourage consumers to make purchases, opt-in to receive SMS alerts or download an app. The results point to how mobile is changing how consumers shop and consume content.

?What we are seeing is that people?s lifestyles have completely changed,? said Michael Amar, CEO of Ifeelgoods, Redwood City, CA. ?They are immersed in digital, they are watching programs online, listening to music on iTunes, playing games on mobile and it is harder for the marketer to get their attention.

?You should give them what they want, which means the digital content,? he said. ?Then you can attract them.?

Driving app downloads
Mobile commerce is experiencing significant growth, as evidenced by the jump in mobile traffic to retail sites during the recent holiday season. At the same time, users are increasingly engaging with a variety of types of digital content via their mobile devices, such as music, TV shows and news.

These trends promise to make mobile an increasingly important medium for digital marketing promotions.

Already, marketers and retailers such as Walmart, Coca-Cola, Kimberly-Clark and L?Oreal are using digital promotions services to entice consumers.

Some of the ways that marketers are using digital rewards includes mobile advertising and SMS calls-to-action. 

Mobile advertising is used to drive purchases and app downloads, while SMS is key in building a company's database. 

Digital rewards can also be used to drive referrals, email opt-ins, social media engagement and contest entries.

Contextual targeting
For Mother?s Day last year, replaced its typical promotional offer of a free vase or a 20 percent discount with purchase and, instead, offered customers free iTunes credit through an iAd campaign. 

Not only is this giving customers the digital content that they want, but the credit can be instantly uploaded and used.

The results for this effort were 12 times higher than previous iAds run by, per Mr. Amar.

One of the keys to the success of this strategy is to target offers based on the context of the users. For example, iPhone users get iTunes credit, while Android users get offers for Google Play credit.

Offers can also be based on the content that a user is consuming. For example, an ad delivered in a music app can offer a free song.

The right incentive
One way these offers can be used is to drive traffic to stores. 

The payoff of using digital rewards can be significant for marketers as mobile customers can have a higher lifetime value.

The higher click-through rates delivered by digital rewards also lead to stronger conversion rates, as well as earned media, with 60 percent of customers sharing digital rewards offers to their networks, per Ifeelgoods.

?Retailers are telling us they are really surprised with the uptick in sales via mobile over the past few years,? Mr. Amar said. ?But then they realized, what is really at stake is to get the first purchase because once people realize how easy it is to purchase via mobile or a tablet, then their lifetime value is much bigger.

?But retailers need to have people try mobile commerce for the first time so they realize that it is so easy and frictionless, which means they need to incentivize the first purchase, sometimes at a much higher level than they do on their Web based offers,? he said. ?The incentive is really key.?

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