Apple opened its App Store in July 2008. Three years later, nearly half a million apps have been developed for its iOS platform. About half as many apps have also been developed for its rival Android platform. Independent developers are not the only one building apps for these two platforms. In their companion are businesses and other organizations that see mobile devices, from smartphones to tablets, as an increasingly important communication channel and mobile apps as a new and exciting opportunity to communicate directly with consumers and the public, and to do so in a more meaningful manner. Their participation has led to a growing number of what is commonly referred to as branded apps.
What Are Branded Apps?
Branded apps are distributed by organizations, often businesses, for marketing purposes whether to connect consumers with their brands (e.g., Audi A4 Driving Challenge, iFood Assistant by Kraft and Trailhead by North Face) or to help them search and shop for products and services (e.g., Zillow Real Estate, Kayak HD, eBay Mobile and Chipotle Ordering). As such, each is visibly associated with a specific brand. Branded apps fall broadly into 2 types: entertainment and utilities. Either way, they are about providing an emotional connection with a brand through an entertaining experience and/or some useful services.
Branded Entertainment Apps
These are time-killer, using a characterization by Deloitte Consulting (2011). They are mostly games. They provide a one-off promotion effect that can deliver huge spikes in customer engagement and hence lead to a significantly large number of downloads. Below are some examples.
- Audi A4 Driving Challenge is a free iPhone app that lets users imagine themselves driving an Audi. It offers users five simulated race tracks of varying difficulty. Users can control the Audi by using its accelerator and brake pedals shown on screen, and steer left and right by turning the iPhone. The game keeps track of elapsed time and, as users improve their performance, lets them drive more powerful models of the A4.
- Zippo Lighter is another free iPhone app that lets users customize the look of their virtual lighters and simulate the reactions an actual Zippo would have to movements and conditions. Jerk the iPhone to the left to open the Zippo; shift it to the right to close it; and flick on the Zippo to light it. The app can even recreate flame movement by recognizing bursts of air blowing into the microphone. It is popular with young concert goers who would hold up a virtual Zippo lighter appearing on the iPhone, instead of a real lighter, for those so-called Zippo moments.
- Barclaycard Waterslide Extreme is also a free app. It piggybacks on a BarcllayCard TV commercial for its contact-less payment technology in which an office worker rides a water slide through the city and back to his home (instead of using the bus or a subway like other workers); along the way, he slides through a grocery store, picks up a banana and pays by swiping his contact-less Barclaycard and then pays for his subway ticket just by swiping the card again. In the app, game players experience the extreme water slide, gliding through cool modern cityscape as day turns into night, collecting objects and avoiding obstacles, and earning more points as they gain speed. The game app has become so popular that Barclaycard follows up with a roller coaster version of it.
Branded game apps face certain challenges. Firstly, they have to rely on their intrinsic entertainment value, rather than the underlying brand, to drive downloads (Deloitte, 2011). It can be difficult to ascertain whether users are even aware of the brand when interacting with these game-type branded apps. So, brand recall can be an issue. One study finds game apps less successful than informational apps in focusing user attention on the brand, encouraging personal connections with it and thus shifting user purchase intention (Bellman et als, 2011). Secondly, user interest tends to fade quickly when the novelty of a game wears off. It can therefore be difficult for a branded game app to sustain on-going interactions between targeted consumers and the brand. Thirdly, keep in mind that games make up the largest category of apps. It can be quite a challenge for any app to get noticed in such a crowded segment.
Branded Utility Apps
These apps are designed to simplify specific routines or tasks such that they can get done as effortlessly as possible and in some interesting fashion to consumers. The latter characteristic means some elements of entertainment can be present and useful even though the entertainment experience these apps offer is not as intense as that of pure entertainment or game apps. Utility apps tend to be evergreen apps. Lacking the excitement normally found in entertainment apps, they often take more time to build a large user base but once there their popularity and usage can be sustained much longer. Below are some examples.
- iFood Assistant is a branded app from Kraft – a confectionery, foods and beverage conglomerate. Originally available for iPhone in 2008 for $0.99, the app is now also available for Blackberry, Windows Phone 7 and Android devices, plus a Lite version (free) for iPhone. It reaches out to a broader consumer base beyond Kraft’s traditional audience of women. It gives users access to a library of instructional cooking videos, 7,000+ recipes, which can be browsed by category and occasion, lets them add the ingredients (many of them made by Kraft) to a shopping list, and helps them find nearby stores carrying Kraft products with a store locator. The app also includes CRM registration options, fully integrated with kraftfoods.com, that let users create, share and save their recipes and shopping lists.
- Nike+ GPS is an iPhone app for $1.99. Using GPS and accelerometer, it enables users to visually map their run and monitor the time, pace, distance and calories burned. It comes with a “Challenge Me” feature, whereby users can challenge themselves to increase their pace or distance, relatively to their previous runs. Through a platform on the Nike+ website, users can share their run history with friends via the site, Twitter, or Facebook,and connect with other runners in a community of 3 million members.
- Chipotle Ordering is a branded app, which is available for free on Apple App Store. Using location-based technologies, it enables customers to select a nearby Chipotle Mexican Grill restaurant, customize their items, enter payment details and pick up their orders, all from their iPhone. It also offers customers the convenience of saving their favorite Chipotle meals online and those of friends, family or coworkers.
- Liberty Mutual Mobile-Claims is a free app available for both iOS and Android platforms. It guides customers through a streamlined claim process for an automotive accident, which may include collecting contact and insurance information from the other driver, taking a photo of the damage, mapping the location via GPS and sending the report. It also lets customers conveniently access Liberty Mutual’s Mobile eService website and manage their policy directly from mobile devices.
- ZipCar is a free app, available for both iOS and Android platforms, from the company that offers its members quick, cheap and hassle-free car rental on short notice. The app amplifies the ease of Zipcar’s rental process. It guides users through the reservation process, locates nearby cars, and contacts customer support. It does even more with capabilities like remote locking, unlocking and honking the horn when a user needs to find a Zipcar car in a parking lot.
The main challenge for branded utility apps is how to evolve continuously to stay fresh while maintaining a delicate balance between utility (“getting things done effortlessly”) and entertainment (“in an interesting fashion”). Competing with hundreds of thousands of other apps for user attention and download is also a challenge. While non-game app categories are not as crowded as game category, they are still very crowded nevertheless.
How Are Branded Apps Doing?
Data indicates a receptive audience for branded apps. Among iPhone users, 70 percent have downloaded an app from a well-known brand; 26 percent would download an app from a well-known brand they like if it is introduced and another 34 percent would strongly consider doing so; only 7 percent would definitely or probably not download it. An overwhelming majority of users download branded apps from the App Store directly onto their iPhones and only 7 percent go through iTunes to download apps (AdMob, 2009). Some branded apps have become mega hits, e.g., Audi A4 Challenge got 3.5 million downloads (early 2010), Barclaycard Waterslide Extreme and Zippo Lighter 10 million each (January and June 2011, respectively).
Unfortunately, users’ experience with branded apps in general has fall short of their expectations. According to a survey by EffectiveUI, 38 percent of mobile app users are not satisfied with most of the apps available from their favorite brands. Nearly 70 percent agree that a branded app can give them a negative perception about the brand if it is not useful, helpful or easy to use. In fact 13 percent have avoided downloading apps from a brand due to a previous bad experience with another app offered by that brand (Brand Apps Today, 2010). The result is that very few apps have gained enough market traction to have meaningful marketing impacts. Going by the number of downloads, 80 percent of the apps by consumer and health care brands in a study were downloaded less than 1,000 times while less than 1 percent of them had more than a million downloads (Deloitte, 2011). Successes, if measured by downloads, are relatively few.
The Question Is Mostly “How”, Not “Whether”
Despite a generally disappointing record to date, being shied away from having a branded app may not be an option for many companies. More than three-quarters of mobile app users expect all brand name companies to have a mobile app to make interactions with the brand easier (eMarketer, 11/22/2010). In retailing business, an overwhelming percentage of users consider mobile apps as useful for shopping activities such as getting money-off coupons, viewing current in-store specials, getting driving directions to the nearest store, and scanning product bar codes for information (eMarketer, 12/15/2010). The question for most businesses is therefore not whether (to have a branded app) but how (to use one or more branded apps effectively).
Utility, not novelty
It has been documented that novelty (as product, process and even business model innovations) can be a source of value creation (Amit and Zott, 2001) and hence user attraction. However, with more than half a million apps currently available, they can hardly be considered as a novelty, not any longer. They must stand on their own merits.
A branded app must be designed to offer some real utility, e.g., solving a problem for users (e.g., creating a shopping list with Kraft iFood Assistant, or filing an insurance claim via Liberty Mutual Mobile Claims) or providing genuinely meaningful features (e.g., waving a virtual lighter with Zippo Lighter, mapping and monitoring a run, and connecting with friends and the runner community with Nike+ GPS app, or remotely locking, unlocking and honking a ZipCar car). This applies to entertainment-type branded apps as well as utility-type apps. After all, even game apps are not intended to entertain users for the sake of entertainment but rather to capitalize on the intense and engaging atmosphere of a game to foster users’ deep connections with the brand (e.g., Zippo, with more than 500 million lighters sold to date, as an American cultural icon going back to wartime Germany and Vietnam).
Usage, not just downloads
User connections to a brand will not materialize without frequent usage of an app long after it is downloaded. Yes, the number of downloads is important. Nothing else can happen without an app being downloaded first. But this is only the starting point in building user connections to a brand. Whether users come back to an app time after time is a more accurate indicator as to whether they actually like it and are having a positive brand experience.
Statistics show that only 20 percent of users return to a free app after the first day of download, however; after 30 days, only 5 percent of them are still using the app; the fall-off rate is slightly steeper for paid apps (Northcott, 2010). Quite disappointing to say the least. Contrast that to successful Kraft iFood Assistant – more than 60 percent of users who have downloaded the app since 2008 are still interacting with it today. In marketing jargon, branded apps are about both customer acquisition and retention, not the former alone.
Mobile apps, not mobile websites.
Apps are for mobile devices with relatively limited computing power, screen size, storage capacity and connection speed. Mobile device users, being on the go, are not interested in surfing the Web; rather, they like to get a task at hand done rapidly, conveniently and in some enjoyable manner. There are certain tasks for which they prefer using mobile apps, and there are others for which browsing the web would be a preferable alternative.
In the retail environment, for example, users find it useful to have mobile apps for getting money-off coupons, viewing current in-store specials, getting directions to the nearest store, scanning product bar code for information and registering loyalty ID at checkout (eMarketer 12/15/2010). On the other hand, they prefer using a web browser to mobile apps for researching products, comparative shopping, reading customer ratings and reviews, and searching for products with key words (eMarkketer, 11/22/2010). Companies must not make the mistake of designing their branded apps to replicate their corporate websites. Instead, they should prioritize and be very selective about which content and functionalities each branded app should have.
Apps in general, not just branded apps, are a relatively new phenomenon. Little is understood about their usefulness in business and marketing, e.g., how consumers actually think about and use branded apps. Some trials and errors are inevitable in figuring out the right content and functionalities for a branded app.
Unique hardware features
Smartphones, tablets and some other mobile devices (e.g., iPod Touch) have several hardware features that are not commonly available on personal computers. Besides being highly portable, they are typically equipped with touch screen, video and still-picture cameras (often on both front and back of the device), speakers and microphone, GPS, digital compass, accelerometer, proximity and ambient light sensors, wi-fi connectivity and, with some exceptions, cellular phone capability. Mobile apps can therefore deliver many functionalities that make them particularly useful and/or engaging. Liberty Mutual Mobile Claims app utilizes GPS to let users report the location of an accident, camera to take pictures of damages, and cellular capability to submit a claim on the spot, all from their smartphone. Chipotle Ordering and ZipCar apps use GPS to help users locate nearby restaurants or cars. Zippo Lighter app simulates virtual flame movement by detecting the air being blown into the microphone. Nike+ GPS app makes use of the iPhone’s accelerometer to measure the user’s running distance and its GPS to map the route. A report by Deloitte (2011) indicates intensive use of some unique functionalities is likely to give a branded app significantly higher likelihood of success (77 percent for accelerometer, 61 percent for GPS and 59 percent for camera).
Promotion absolutely essential
All the investments in time, efforts and money to develop a branded app will not pay off unless consumers are aware of its existence and become interested in its utility and entertainment value. With hundred thousands of apps out there, this will not happen without a plan to promote it.
Consider this: consumers find non-branded apps by searching the app store from their mobile devices (58 percent) or through their friends and family members (45 percent); for branded apps, they rely much less on these channels (21 and 28 percent, respectively). Promotion undoubtedly needs to take on a more important role in spreading in getting consumers to know about branded apps.
Appvertising for a branded app can be placed in other popular apps. AutoWeek did that with its app on 3,000+ apps through AdMob network in November 2009 to move the app’s ranking into the 10th position in the news category for iPhone (O’Leary, 2010). Capitalizing on other promotional campaigns already in place can give a branded app some needed visibility. BarclayCard’s Waterslide Extreme app piggybacks on its TV commercial that features a worker using a Barclay card while riding down a water slide. Although it is not that unique from a game perspective, it becomes an immediate hit (over 10 million downloads and 16 million engagement minutes) with app users by reminding them popular TV ad. Besides these, more “traditional” channels (e.g., PR and corporate website) can also be used.
In brief, while the future of mobile business and marketing looks bright and that of branded apps appears promising, a well thought out game plan for these apps is a must for any chance of success.