Mobile Marketing Moves From Ads to Apps

Kraft, Nike, Others Keep Users Engaged With Useful Applications

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SAN FRANCISCO ( -- In lieu of banner ads, advertisers increasingly are building mobile applications that provide contained brand experiences along with a usefulness that keeps users interacting with the brand. In the past month, brands such as Kraft, Nike, Gap, REI and Friskies have built applications for everything from planning a dinner menu to downloading snow reports.

Kraft's iFood Assistant iPhone app.
Kraft's iFood Assistant iPhone app.
As applications -- particularly iPhone apps -- grow in popularity, tools are emerging to help track their conversion rates and monitor whether clicks on ads lead to completed downloads of advertised apps. Ad network AdMob has just launched such a tool, and in its prelaunch testing, these findings emerged:

  • Free applications have an average conversion rate of 10% vs. an average of 1% for paid applications.
  • Games generally have higher conversion rates than other categories of applications, up to twice those of nongame applications at similar price points.
  • The average acquisition cost for free applications is less than $1, significantly less than the average application download costs on the PC web.

These findings bode well for marketers who say fancy microsites may not always be the answer if the endgame is continuing engagement. Applications have the advantage of living on after the buzz fades from the product launch.

"The object is to build something that has utilitarian value to the consumer that goes beyond just the experience with the brand. It's the only way to create consistent dialogue," said Brian Bos, senior VP-convergence director at Mindshare.

Not just passive eyeballs
The move toward applications also comes as marketers realize that users are no longer just passive eyeballs but active creators with an appetite for personalization. "There used to be this mentality: If you build it, they will come," said Steve Finnie, a marketing manager at General Mills. "But now they're not necessarily seeking out our brands; we need to fit into their lives. That's why we'll see more applications that add value to their life as they're leading them, and enhancing them."

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