Friday, June 10, 2011

Creating mobile content: a lack of application

If there were any lingering doubts that apps are now part of the mainstream, they were expelled last month when Lord Sugar asked contestants on The Apprentice to develop and market an app as one of their first tasks.

It made for excruciating, if compelling, viewing, but it confirmed the importance of apps to the consumer and business  markets.

In 2010, only the second full year that apps have been available, the UK market was worth £95m, with total downloads of 575m. According to media research company Screen Digest this will more than triple by 2014, when the market will be worth more than £300m and downloads will total 1.8bn.

Very few companies now ignore apps, but developing one is all too often seen as a way of "box ticking" the mobile marketing space without having to do more. And that development is sometimes half-hearted, says Julien Theys, an analyst at Screen Digest.

"A key issue marketers need to ask, is what is it they want to achieve." says Theys. "Often they don't know what they want – they just want to be on mobile." He points out that too many apps are "gimmicky" with a shelf-life average of just four weeks, usually because of poor planning. "A classic mistake is they say, 'Look, I just want an iPhone app'."

Nick Elsom, head of digital at media agency PHD UK, argues that companies are making the same mistake now by not engaging fully with mobile as they did in the early days of the dotcom boom. "Currently mobile is one of the last areas to be allocated budget, in much the same way as the now huge markets for display and search were in the early days of digital," he says. "Most mobile media activity plays a supporting role, rather than being the fulcrum of activity," Elsom adds.

The Internet Advertising Bureau (IAB) says that 51% of mobile phone owners, about 23 million people, use their device to either make a payment, redeem coupons or research products and services they later buy. A study by the IAB found that there is an "urgent need" for UK retailers to catch up with mobile-savvy consumers to increase sales.

Some have already done so. Retailer ASOS is regarded as one of the UK's most successful m-commerce exponents and is believed to generate up to £1m in revenue each month from its mobile-optimised site.

Babs Rangaiah, head of global media innovation at Unilever, says his company is looking forward to in-store scanning and payment services becoming commonplace. These will allow customers to use their mobile phones to scan barcodes on products and pay from them instantly.

But he points out that apps can be used for far more than m-commerce. "Apps offer many marketing opportunities beyond straight purchase – for instance, advertising," he says.

Unilever recently broke new ground with what it says is its most sophisticated app to date for one of its products. The new Lynx app combines videos, texts, tweets and Facebook status updates. It enables groups of friends to "produce a next day record of unforgettable nights  out".

Promotions and discounts

Other innovations in the mobile space include Facebook Deals, which allows stores, restaurants and businesses to offer promotions and discounts to users of the social media site's location-based service Facebook Places.

Vouchers or coupons can be sent to Facebook members depending on their location. Gap US gave away jeans to the first 10,000 users to "check-in" to a store, for example.

Unilever was one of the launch partners for Apple iAd, the much-hyped service that makes ads available inside mobile apps, when it launched in Europe in December.

Demand was so high that by the time iAd was unveiled in the US in June last year it had already secured $60m (£37m) in campaign bookings – 50% of the total forecast mobile ad spend in the US for the second half of 2010, according to the company. Apple took 21% of all US mobile ad spend in 2010, it says. Google is already challenging Apple's hegemony, having acquired the giant mobile company AdMob for $750m in 2009.

"Mobile is exceptionally important to us," Unilver's Rangaiah says. "It will be the most frequently used medium for people to get online in the future, particularly in developing and emerging  markets."

Mobile retail: shopping around

Nearly 22 million people used their handsets to browse mobile sites in March, with a staggering 6.8 million making multiple visits to retailers, according to online market research company comScore. Yet many retailers are failing to take advantage of the m-commerce boom.

A survey last year carried out by the Internet Advertising Bureau found that only four of the top 20 most frequently visited UK retailer websites had mobile-optimised sites, and only eight had any kind of mobile application for smartphones.

The hugely successful online retailer ASOS was one of those laggards. Then in October last year the company began to pay attention to consumer demand, noting that between January and September 2010 visits via mobile to its main website doubled from 1.5% to 3%.

Despite the fact they had to navigate a website designed for PC-users, consumers had persevered and placed 24,000 orders in a six-month period.

ASOS launched its first mobile site ahead of the Christmas rush. "Our goal was to have our users equally as comfortable with using our mobile option as they would be using our PC site," says Nick Cust, user experience manager at ASOS.

Cust would not be drawn on figures other than to say "the response has been over and above what we could have predicted".

ComScore ranks ASOS as the 13th largest "mobile retailer" in the UK, with more than 160,000 unique user visits each month, not bad considering its peer group includes digital giants such as Amazon, Apple and Tesco. In the fast-moving digital world, a well-planned mobile strategy can make a big difference in a small amount of time.

Early adopters: innovating campaigns

When mobile advertising was in its infancy some companies proved far-sighted about the benefits they could derive by harnessing its potential, and they are reaping the rewards now that it is becoming commonplace.

American coffee company Starbucks is one of the brands consumers search for most often using location-based services. One reason for that is its decision to allow customers to use their handsets to pay for products using an app the company developed that deducts payment from a prepaid account. But it is also one of the pioneering groups who have asked customers to opt-in if they want to receive offers based on where they are. That is hugely valuable because consumers who volunteer to receive information are far less likely to opt out again.

Starbucks subsidiary Seattle's Best Coffee has also used ground-breaking commercials on mobile devices to drive traffic to its site – and its stores. Few of the truly memorable advertising campaigns of recent years have been on mobile, but that is likely to change as more advertising spend goes into the medium. Starbucks also uses mobile games to great effect, becoming a commercial partner in a location-based game which allows users who check into Starbucks stores most often to become an "honorary Barista", a status they can brag about on social networking sites.

The coffee chain is not the only company to adopt a holistic approach to mobile, using the medium in conjunction with other platforms to ensure its effects are maximised. Tesco's barcode-scanning iPhone app – the first to be launched in the UK – is another innovative example. Cosmetics group Rimmel now spends more on mobile than it does on traditional media. It is trying to create a buzz around its products by creating "snackable" mobile content which encourages young women to discuss its cosmetics.