New IPhone Also Brings New Way of Mobile Marketing

Open Platform, Access to Software-Development Kit Let Brands Sponsor or Add Their Own Applications

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NEW YORK (AdAge.com) -- The blogosphere was abuzz last week about the new iPhone. It runs on a fast 3G network, comes with global-positioning technology and is priced at a more-accessible $199. But what has some marketers most excited is that with it comes the possibility of creating marketer-driven mobile applications.
Version 2.0: More than just 3G and global positioning.
Version 2.0: More than just 3G and global positioning.

That's because on the iPhone, software is content, said Chad Currie, VP-group creative director at T-3, who wrote about the possibilities on Ad Age's DigitalNext blog. And increasingly, marketers are interested in creating useful and valuable utilities for consumers.

"The iPhone is a lifestyle device," he said. "People will solve real problems with apps. ... The more you can add value to that experience, the better."

Right now there are two kinds of applications for the iPhone and other mobile devices: web applications and native applications. Native applications allow for richer experiences and take advantage of the traits and features that are built into a phone, such as a camera or a motion sensor. It's the native apps that are new for iPhone 2.0.

Web app scale
Web applications for the iPhone already exist en masse and, despite the name and the fact that they're accessed through the Safari browser, don't look all that much like web pages. Bank of America has a nice mobile banking application, and FedEx lets customers process shipments. For many marketers, web apps will continue to be the best route. It's nearly impossible for marketers to create one native mobile application to run across multiple handsets and carriers because they all run on different platforms. A marketer would have to build five (or more!) separate applications. So while web apps are restricted to what a web browser will support, they offer greater scale.

This movement toward mobile apps is a confluence of two trends: marketers' interest in creating useful experiences for customers and the opening up of platforms for them to do so.

Marketers are taking dollars that might previously have gone toward traditional paid ad formats and using them to developing content or utilities that can offer deeper engagement and ongoing utility.

"What's going to work in mobile is applications over advertising," said Chad Stoller, director-emerging platforms at Organic. "You have to provide utility and use. But it's one thing to build it, another to get distribution."

Indeed, much of the buzz about mobile marketing in the past couple of years has centered on the idea of mobile advertising -- importing the paid-display-advertising model into the mobile phone. But in the past six months, marketers have begun talking about a new kind of mobile marketing, one that's experiential, takes advantage of the medium and enhances something users would want to do anyway. In fact, making sure there's a specific need or reason for an application is almost as important as determining whether a marketer's audience can be found on a device.

Software as content
"Once you interpret the role of the brand in the medium, developing applications or sponsoring applications is a different kind of connection or emotional attachment than just running advertising," said Eric Bader, partner of Brand In Hand.

Marketers can seriously pursue these applications now that Apple has decided with the launch of its second-generation phone to open up its platform, give access to its software-development kit and allow developers to create all sorts of application for the iPhone. Facebook arguably launched the software-as-content trend a little more than a year ago when it allowed outside developers to create applications that would run on the Facebook platform.

The iPhone will launch in the U.S. on July 11 with an Apple Apps Store that will be the interface through which iPhone users can download applications made specifically for the device. As iTunes is to music and the iPod, the Apps Store will be to the mobile phone. The approval process required to get into the store is seen as a way to combat the application fatigue many have assigned to Facebook.

There are few details available on the Apps Store, but developers will be able to set the price, and, in a traditional revenue-sharing model, Apple will take 30%. Apple hasn't specified whether or how it will take a cut from free, ad-supported apps -- but some in the industry suggest this may be the way for Apple to milk a long-speculated advertising revenue stream.

Which device?
While the iPhone has captured much of the buzz around mobile apps, developers can build native applications for BlackBerry or Windows Mobile as well. (Barnes & Noble has a well-regarded e-commerce app built for BlackBerries.) The first step for any marketer that wants to create a mobile app would be to determine how much of its audience is using mobile devices for things other than voice. Then it should determine which device most of its customers use. If, for example, it's targeting a professional, at-work crowd, building for the BlackBerry would make more sense than the iPhone.

At Apple's Worldwide Developers Conference last week, the Associated Press launched a native iPhone app that uses the device's global-positioning technology to automatically cull local news stories, which are stored and cached so they can be read even if a user doesn't have service, such as on a plane or subway. (And a citizen-journalism-focused aspect of the app allows users to instantly send photos to the AP.)

Sega launched an iPhone version of "Super Monkey Ball" that called on users to tilt the device to guide their monkey balls; another game developer took advantage of the touch screen as well. Major League Baseball launched live video highlights, and Six Apart launched a mobile-blogging app.
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