Mobile applications have caused a stir in the digital community this year, and with handset makers looking to expand their offers next year, their influence as a media channel is set to grow.
For those still in the dark, mobile applications are tools that can be downloaded onto a mobile phone. They range from the funky - such as a voice-activated song identifier - to the functional, like the ‘remote’ application that transforms iPhones into remote controls for computers. The creation of mobile application ‘stores’ is opening up the market to third-party developers and advertisers, allowing anyone who has a bright idea for an application - or the funding to sponsor one - to get in on the action. But how should they be used?
For those still in the dark, mobile applications are tools that can be downloaded onto a mobile phone. They range from the funky - such as a voice-activated song identifier - to the functional, like the ‘remote’ application that transforms iPhones into remote controls for computers. The creation of mobile application ‘stores’ is opening up the market to third-party developers and advertisers, allowing anyone who has a bright idea for an application - or the funding to sponsor one - to get in on the action. But how should they be used?
1 Apple created the first major online mobile application store earlier this year to tie in with its iPhone. After seeing the App Store’s successful launch in July - and the 100 millionth application download just 60 days later - other mobile creators have followed Apple’s lead. Google opened its Android Phone’s Android Market for developers last month, and BlackBerry plans to launch its Application Centre in March. Both these stores will resemble the App Store and allow handset users to browse and purchase their applications on their phone via touch screens.
2 Although mobile applications have been around for a few years, efforts by the handset firms over the past year mean this is the first time users have a true understanding of what they are and what they do, says Tanbir Rahman, Asia-Pacific VP of the Hyperfactory. “In 2005 everyone was talking about applications, but then the reality hit — there were difficulties downloading and installing the applications on phones and users didn’t really understand,” he says. “Now applications are back in favour and offer richer capability and levels of security that mobile web alone can’t offer.”
3 Some advertisers have already capitalised on the avenue. For example, Visa and Chase Manhattan developed a location-based service in the US that alerts users when they approach a merchant where they can get a discount. British Airways and Qantas created applications that notify users of flight arrivals, departures, timetables and contacts, and Lufthansa created one that allows users to book flights on-device and receive a mobile boarding pass.
4 According to the head of one Hong Kong digital agency, Asian clients remain reluctant to invest in the technology. However, mobile apps can be a cheap marketing strategy. According to Dannie Francis, CEO of The Cell City, simple applications, such as a weather forecast programme, can cost as little as US$10,000. More sophisticated applications, he says, require a back-end content manager and database and can cost 10 or 20 times more.
5 In terms of distribution, mobile apps can be very cheap. Apple’s store does not charge to include the service in its line-up, as it is keen to provide as broad a range of applications as possible.
The best applications will be those able to go ‘viral’ and spread of their own accord, though marketers can aid this process by seeding on relevant sites or by marketing them through other media.
6 Application usage should expand in line with smartphone penetration. Research firm Gartner projects that the global smartphone market will be worth US$200 billion by 2012 and make up 65 per cent of all handsets. In North America, smartphone ownership displayed nearly 79 per cent year-on-year growth in the second quarter of 2008.
In Asia, where several markets do not have reliable broadband internet connections and users look more to their phones for internet access, the stakes are even higher. According to Synovate, less than 35 per cent of affluent Asians had mobile phones with internet capabilities in 2004, and that has jumped to 65 per cent in 2008.
Jimmy Poon, MD of Puca China, argues that mobile applications are a perfect way to bypass the mobile internet’s limited bandwidth. “The result is a function-rich tool without the burden of slow speed,” he said. “These applications are critical in attracting the first generation of mobile media consumers, and starting this ball rolling.”
What it means for…
Marketers
- Mobile apps offer a new way to use the mobile phone as a marketing medium. They allow brands to offer useful or fun services to consumers that can be branded.
- Their cheap set-up cost means marketers can experiment with applications without breaking the bank.
- Don’t assume that the work is done once the application is built and available through a store. A few applications may go viral of their own accord. Most will need help.
- Applications are a service as well as a media channel, and need to be marketed as such.
Agencies
- Agencies need to develop application development services. This will normally involve building partnerships with specialist application developers, though agencies will need executives internally who understand the medium’s potential.
- Application development is not high-margin work. However, as success can be measured relatively easily based on the number of downloads, there is scope for agencies and clients to build a performance-related aspect into their contracts.
