Insisting on an iPhone App? Not So Fast

What You Might Want to Consider Before You Commit to the Latest Mobile Craze

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SAN FRANCISCO (AdAge.com) -- As agencies herd their clients onto the iPhone-application bandwagon, brands are happy to climb onboard. After all, what marketer wouldn't salivate at the engagement prospects behind the 800 million games, utilities and entertainment downloaded from the App Store? And with handset makers Research In Motion and Nokia set to launch their own app storefronts in the coming weeks, app fever is sure to get more fuel.

According to Pinch Media, which has studied iPhone-app usage based on 30 million downloads, only about 1% of downloads translate to long-term use.
According to Pinch Media, which has studied iPhone-app usage based on 30 million downloads, only about 1% of downloads translate to long-term use.
But the rush to apps has led to a backlash in some quarters, and a call for more measured thinking around branded apps. "There's a lot of delirium surrounding apps right now," said Tom Foran, chief revenue officer at Crisp Wireless. "There's a certain mentality of people that look at apps as the end-all and be-all strategy, when it can't obviously address the vast majority of users who access mobile content."

Reasons to exercise caution
There are reasons for marketers to exercise caution. For all the stellar numbers Apple publicizes, the data on iPhone-app usage suggest a dimmer reality. The average shelf life of an app is limited, with usage declining by almost a third in the first month after use, according to Pinch Media, which has studied iPhone-app usage based on 30 million downloads. By the company's estimate, only about 1% of downloads translate to long-term use -- not exactly welcome news for marketers looking to nurture relationships with consumers.

Plus, the App Store's growing popularity means marketers have to work harder to rise above the din. It's tough to be discovered among the growing array of apps and even harder to sustain a place among the most downloaded. An app needs momentum right out of the gate to ensure discovery. Getting a top ranking requires a lot of downloads in a narrow window that can be anywhere from 24 hours to five days, according to Pinch Media. Six months ago, 10,000 downloads earned a top-25 ranking; today it takes twice as many. (However, brands that reach top-100 rankings on average more than double their daily number of new users, according to Pinch Media.)

The success of the App Store has also focused marketers on the iPhone to the exclusion of other platforms. To be sure, iPhone users are engaged multimedia users, but published estimates put the number of iPhone users at less than 5% of the handset market, and mobile analyst Mark Lowenstein recently told a conference that the most successful apps reach just 20% of iPhone users. That's led some ardent app believers to advocate a broader approach.

"It's not just how can you succeed in the iPhone application but how can you get that app downloaded on Nokia, BlackBerry, Google Android?" said Bryon Morrison, president of Omnicom Group mobile-marketing agency Ipsh. "Apps should be a front end to a larger strategy." In addition to having intrinsic value via a utility or entertainment, he said, a successful app has to combine the brand's DNA with relevance in the consumer's life while maximizing the handset's technology -- a tall order by any stretch.

What about the mobile web?
Meanwhile, some are asking whether the functions of an app can't be provided by the mobile web instead, particularly if the app doesn't leverage the iPhone's native capabilities. "It just depends on the brand objective. If you don't need the shake and tilt experience, maybe you can have an optimized web experience," said Jon Vlassopulos, CEO of Moderati, the branded-entertainment shop behind the Zippo-lighter app. That app is still being downloaded more than 100,000 times a week, having secured a spot in the top 40 during the past five months; it lived in the top three for two weeks.

Advances expected for the mobile web also have some wondering whether the app world is sustainable. Some say the limelight will return to the mobile web after the app craze levels off, particularly once its capabilities are on par with those of apps, with all their bells and whistles.

Fatigue with the same old apps may also be setting in, and that's leading some brands to rethink old formulas. Mr. Vlassopulos said carmakers have tended to use driving games as a way to interest and entertain consumers, but one luxury auto brand wants to look at underwriting a concierge service instead. "There's only so many car-driving games the audience will put up with," he said.

Five Reasons You Might Want an App

  1. Engagement 101. If done right, an app is an opportunity to deeply involve the consumer and a way to extend dialogue after a campaign has ended.
  2. It can raise brand loyalty. The more times consumers interact with a brand, the greater the chances they will gravitate toward it when they're ready to buy.
  3. You'll be ready when the app market really explodes. Within five years, In-Stat expects handset makers to ship a total of more than 100 million units that are app-compatible, so now is the time to gain some experience.
  4. It's where the eyeballs are. The numbers are compelling: some 800 million downloads from the iPhone App Store.
  5. IPhoners have great demographics. Their income specifically makes them a very desirable target, and they're ravenous multimedia users. According to AdMob, iPhone generates half the smartphone traffic in the U.S.

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