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An extract from Contagious Magazine's "Mobile Apps" report

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Page 1: Mobile Apps 09 Extracts - Contagious Magazine
Page 2: Mobile Apps 09 Extracts - Contagious Magazine

CHAPTERS

11 /CREDITS

10 /REFERENCES

09 /STATS

05 /CASE STUDIES

06 /APP STORES

07 /DEVICES

08 /FUTURE

01 /INTRO

02 /TIPS 1

03 /TIPS 2

04 /CONSUMERS

p.02mobile apps / index /

MOBILE APPSINDEX /

01 / pages 3-4INTRODUCTION

02 / pages 5-6TIPS FOR BRANDS / PART 1 by John Cecil-Wright

03 / pages 7-9 TIPS FOR BRANDS / PART 2by Alexander Fairfax

04 / pages 10-14LANDSCAPE / CONSUMERS

05 / pages 15-25BRANDED APPS / CASE STUDIES

06 / pages 26-30APP STORES

07 / pages 31-34LANDSCAPE / DEVICES

08 / pages 35-36LOOKING AHEAD

09 / pages 37-38NUMBER CRUNCHING

10 / pages 39-40REFERENCES & LINKS

11 / page 42CREDITS

Page 3: Mobile Apps 09 Extracts - Contagious Magazine

CHAPTERS

11 /CREDITS

10 /REFERENCES

09 /STATS

05 /CASE STUDIES

06 /APP STORES

07 /DEVICES

08 /FUTURE

01 /INTRO

02 /TIPS 1

03 /TIPS 2

04 /CONSUMERS

mobile apps / introduction / p.03

Over the past 10 years, the mobile phone has become the one gadget that nobody, from media mogul to suburban school kid, can do without: the undisputed winner of the ‘battle of the bulge’, the race for the space in your pocket. As trend researcher Sean Pillot de Chenecy once remarked, ‘No-one’s ever going to commit suicide because they left home without their iPod.’

To date and to their credit, marketers have shown an almost preternatural reticence to get stuck in to mobile, perhaps noting that email as a marketing me-dium is only just staggering to its feet after a series of sucker punches dealt by spam marketers. This in addition to the fact that the advertising industry’s col-lective ego has been bolstered over the years by the production of cinematic films for TV, artistically craft-ed print ads for glossy magazines, and latterly, flash-heavy microsites designed to enthral and bedazzle. Small wonder, perhaps, that the charms of the mobile phone’s small screen size, restrictive price plans and a preponderance of entry level handsets designed at most for SMS marketing have taken a while to engage our attention.

However, with 4.1bn handsets now in circulation and countries such as China, Brazil and India appear-ing to leapfrog the desktop stage of technological evolution and head straight for the mobile web, the potential for targeted, practical brand communica-tions via the cellular device seems assured.

So – how to engage, without spamming? How to sustain interaction without constant redevelopment? How to apply the creativity for which the advertising industry is so well known to location-based technolo-gies and teeny tiny screens?

Step forward the humble application, or app for short. Opt-in, flexible, and considerably better looking than your average SMS, applications can fulfil all the requirements of a successful and engaging branded utility, carrying with them a disproportionate emotional clout. They can be useful. They can be relevant. They can be entertaining. The best ones are all three. The other unexpected benefit of a branded app on a mo-bile device is privacy for the user. Social networking sites such as Facebook have been labelled ‘an apps graveyard’ due to the low rates of uptake amongst user communities. This has been attributed to several factors, not least the way in which social networking apps tend to be best experienced when tied to one’s desktop computer, and a degree of embarrassment from consumers in associating themselves so publicly with what is still, to all intents and purposes, advertis-ing. Mobile phones are not only portable, they’re per-sonal – meaning that a useful branded app concealed discreetly in the privacy of one’s pocket could prove more appealing.

Following the debut of Apple’s iPhone, with its revo-lutionary touchscreen interface™ (not actually a trade-mark, although it may as well be), sales of the device swiftly claimed Apple a 11% share of the global smart-phone market, dominated by Nokia at 40%. However, the iPhone’s creative, social and technological potential

01 / pages 03 - 04INTRODUCTION

Illustration: Chellie Carroll /

Page 4: Mobile Apps 09 Extracts - Contagious Magazine

CHAPTERS

11 /CREDITS

10 /REFERENCES

09 /STATS

05 /CASE STUDIES

06 /APP STORES

07 /DEVICES

08 /FUTURE

01 /INTRO

02 /TIPS 1

03 /TIPS 2

04 /CONSUMERS

mobile apps / introduction / p.04

was only fully realised in March 2008 when Apple, a company not normally known for encouraging post-launch tinkering from their rabid and willing fan base, broke with tradition by releasing a Software Devel-opment Kit for the Apple App Store – the hub from which all iPhone compatible apps could be down-loaded. The explosion of user-generated content fa-cilitated by the internet was no longer confined to the production of ‘content’ such as video and music. The App Store had expanded Apple’s development team to include everyone with an interest in technology and an idea. The store now numbers some 30,000 apps and passed its billionth download in April 2009. This is proving lucrative for independent developers and Apple alike, with iPhone apps only available through iTunes. The man behind the iShoot game is reputed to have netted $600,000 in the first month of avail-ability. As for Apple: with one billion downloads, of which 30% are estimated to be paid-for at an average price of 99 cents each – we’re talking revenues of some $297m through the App Store, 30% of which is retained by Apple. And that’s not including the listing fee charged to developers.

An oft-quoted statistic of unknown provenance yet extreme credibility states that ‘98% of creative direc-tors have an iPhone. 1% of actual people have one’. As with any new marketing medium, there are contro-versies. At a time in which economic adversity sees advertisers less willing to take risks, especially when they cannot be guaranteed scale, the benefits of un-charted territories such as mobile applications are still somewhat hazy. Is the target audience large enough to justify the technological investment?

Thankfully, the arrival of several other big players in this space looks set to confirm the app as a medium worthy of investment. Google’s Android Market has

got off to a slow start due to the absence of compatible handsets to rival the iPhone’s sleek design. However, the steady introduction of Android-friendly models, a more ubiquitous open platform that promises to de-liver content regardless of manufacturer, the fast take up of Android phones over the costlier iPhone in Asia, and a backer with a track-record in the establishment of successful online hubs could make this a surefire winner. Meanwhile, Nokia’s Ovi – a content-sharing service linking phones and the internet – is indicative of a larger move towards convergent services for the manufacturer at a troubled time in its 144-year history (the company announced a 90% fall in profits for the first quarter of 2009).

In this Contagious Special Report, we’ll be looking at how the mechanisms work. Who’s taken the plunge. Who’s succeeded, and who has failed. What benefits there are for brands in engaging with this emerging space, and how to build an app worthy of consumer attention. We’ll provide an overview of the consumer landscape and mobile usage before exploring some of the case studies we like best. We’ll look at the meteoric rise of Apple’s App Store and its foremost position in this retail space, as well as the devices that are leading the way. We’ll also take a longer-term view on where apps are headed – from m-commerce and augmented reality to their potential to improve our health.

The rise of the application represents a land grab for the hugely valuable real estate in all of our pockets. Once we have an app for bar-hopping, recipe shop-ping, or blood pressure monitoring, it’s going to take an awful lot to have us switch. And if the internet has proven that ‘pull marketing’ can engage and stimulate communities of loyal brand enthusiasts, mobile repre-sents a chance to apply those principles to more per-sonal relationships between brands and consumers.

STATS /

• Thereareanestimated30million combined iPhone and iPod touch users around the world

• TheAppleAppStorehadmore than 35,000 applications at the end of April 2009

• iPhoneownersdownloadan average number of 37 apps in total to their devices, while G1 owners download an average of 40

• Applepostedsecondquarter2009 profits of $1.21bn and $8.16bn in sales

• Nokiahas41%shareofthesmart- phone market

• TheiPhonegenerates33%ofall smartphone traffic worldwide

• 3Gsubscriptionsrose300%inthe US in 2008

• Mobileinternetpenetrationisat 17% in the US, 16% in the UK, 14% in Italy and 12% in France

• IndiaandChinaaddanaverageof 10m and 8m mobile subscribers per month, respectively

Page 5: Mobile Apps 09 Extracts - Contagious Magazine

05 / pages 15-25BRANDED APPS / CASE STUDIES

CHAPTERS

11 /CREDITS

10 /REFERENCES

09 /STATS

05 /CASE STUDIES

06 /APP STORES

07 /DEVICES

08 /FUTURE

01 /INTRO

02 /TIPS 1

03 /TIPS 2

04 /CONSUMERS

mobile apps / branded apps / case studies p.15

The burgeoning popularity of apps is providing a fertile playing ground for advertisers. They are a new channel for highly targeted, interactive content that resides on the one device that no one leaves home without. If done right, apps offer an opportunity to build an ongoing dialogue with your customers and can potentially increase loyalty.

But how to do it right? Given the huge numbers of available apps (most of which are non-branded), and the ever-increasing compe-tition for the valuable screen real estate, how can brands stand out? Getting a top ranking in Apple’s App Store requires a lot of downloads in a short space of time, according to a study by Pinch Media. Six months ago, 10,000 downloads got you into the top 25; today it takes twice as many.

The key is to add value to your audience by providing a relevant and targeted service or piece of entertainment that, ideally, creates a viral effect. It’s about leveraging your content (and brand) to en-hance your customers’ lives – whether through functionality or fun.

In this section we take a look at some of the brands that we think have been doing it well. We’ve divided the case studies into those that are service-based, and those that have more of a social remit. In this respect, we see in apps the convergence of marketing and product development; marketing and entertainment; marketing and information. And the brands that are getting it right are those that are embracing these new roles.

Service-based apps / Kraft / iFood Assistant

The world’s third-largest food and beverage company, Kraft entered the application fray towards the end of 2008 with the iFood Assis-

Kraft / iFood Assistant

Page 6: Mobile Apps 09 Extracts - Contagious Magazine

CHAPTERSCHAPTERS

11 /CREDITS

10 /REFERENCES

09 /STATS

05 /CASE STUDIES

06 /APP STORES

07 /DEVICES

08 /FUTURE

01 /INTRO

02 /TIPS 1

03 /TIPS 2

04 /CONSUMERS

p.16

tant. The app quickly went to #2 in the Lifestyle cate-gory of the iPhone app store - impressive considering there is a one-off 99-cent charge for downloading it - and in April 2009 remains in the top 100 paid applica-tions. What’s more, it also features advertising which users are clearly happy to sit through in exchange for the service which it provides.

The iFood Assistant furnishes consumers with tips, recipes and consequent shopping lists (obviously including Kraft products), aiming to make cooking quicker for those with less time on their hands, be it busy mums or professionals with hectic lifestyles. The 7,000 recipes are broken down into various catego-ries including meal time, ingredients and preparation time - there are even step-by-step instructional videos covering techniques from chopping to seasoning.

In order to access these recipes, users must first log in, meaning that at any given time Kraft can see how many people are going after what content - a useful tool for gathering targeted information.

This is a real masterclass in branded utility from Kraft - proving that if you make something useful enough, consumers will be happy to not only be mar-keted to, but what’s more, pay for the privilege AND exchange personal information. Of course, there is the chance that users may embark on the recipes using non-Kraft products. However by covering every detail from shopping lists to store locators, even specifying which aisle to buy the ingredients from, it literally be-comes more effort not to tow the line and buy Kraft. While Kraft won’t reveal financials or total number of downloads, the estimated revenues for the iFood As-sistant are in the seven figures.

There’s a similar app available for Betty Crocker. A mobile version of the world-famous Betty Crocker Cookbook, this iPhone app – which is free to down-load – provides 4,000 recipes. As well as searching for specific dishes, you can type in ingredients of left-overs in the fridge, and the app will return recipes to match. You can also tag favourite recipes and email them direct to friends via your phone’s email function.

GoodGuide /

Launched in September 2008, the idea behind inde-pendent ‘for benefit’ start-up GoodGuide’s website is simple; an online database of products that are rated on the basis of how healthy, environmentally friendly and ethical they are.

As well as the comprehensive web-based database, GoodGuide extended the reach of the service by cre-ating a free iPhone/iPod Touch app that consumers can use while out shopping.

The app lets you search and view information and ratings for over 70,000 products, check the facts on the product as well as its manufacturer, and browse top rated products by category. Users can also cre-ate, access and share shopping lists either online or on the go.

With household budgets being squeezed by the economic slowdown, consumers are making more considered decisions about what they buy; price, while a factor, is not the only criterion by which these choices are made. GoodGuide provides vital reassur-ance to shoppers who simply want the facts about what they are buying and this app is a neat piece of utility for those wanting to make the right choices while out and about.

mobile apps / branded apps / case studies

Betty Crocker /

GoodGuide /

Page 7: Mobile Apps 09 Extracts - Contagious Magazine

CHAPTERS

11 /CREDITS

10 /REFERENCES

09 /STATS

05 /CASE STUDIES

06 /APP STORES

07 /DEVICES

08 /FUTURE

01 /INTRO

02 /TIPS 1

03 /TIPS 2

04 /CONSUMERS

mobile apps / apps stores / p.26

Downloads from the App Store on Apple’s iTunes site reached a billion in April 2009, and the impact on Ap-ple’s revenues has been significant: app downloads along with strong iPhone sales contributed to the com-pany’s $8bn revenues posted for its fiscal second quar-ter 2009, up almost 9% on the same quarter last year.

At the same time, competition is heating up in the app store space as challenger brands aim to eat into Apple’s leading market posi-tion. Notable launches into the consumer retail scene in the first half of 2009 include BlackBerry (BlackBerry App World), Google (An-droid Marketplace), Samsung (Mobile Applications store), Nokia (Ovi app store) and Microsoft (Windows Marketplace).

‘Without a doubt other app stores can succeed,’ Alex Meisl, ceo of Sponge, told Mobile Entertainment in April 2009. ‘We shouldn’t forget that while Apple has made great strides, its market share is still pretty low. What Apple has done is raise the profile of handset apps by making the process seamless and intuitive. It can only en-courage the others to work on their interfaces.’

While it’s possible for these competitors to be successful with their retail offerings it’s important to keep in mind Apple’s unique advantages: its premium brand; a single device; and a mature con-tent distribution platform through iTunes. Apple has also benefited from fixed-price data plans that encourage increased use of the mobile internet. The competitive retail landscape is also likely to create confusion for new consumers who may be unable to buy from outlets that their devices don’t support. Advertisers wishing to distribute their apps should assume that Apple will have the largest audience reach for the foreseeable 12 months.

APP STORES06 / pages 26-30

Apple All-Time Top 20 Apps /

All-Time Top Paid Apps All-Time Top Free Apps

Crash Bandicoot Nitro FacebookMoto Chaser iPintVirtual Pool Google EarthCro-Mag Rally PAC-MAN LiteFlick Fishing Touch Hockey: FS5Koi Pond Labyrinth Lite EditionMONOPOLY Here & Now Lightsaber UnleashedSuper Monkey Ball Tap Tap RevengePocketGuitar FlashlightiCopter ShazamPocket God BackgroundsLondon Tube iBowlBejeweled 2 Crazy Penguin CatapultTexas Hold’em RemoteReal Football 2009 BubbleWrapBlocked Audi A4 Driving ChallengeFieldrunners DartsTETRIS eBay MobileiShoot Last.fmiFart Mobile Movies

Source: Apple, iTunes, April 2009

Page 8: Mobile Apps 09 Extracts - Contagious Magazine

CHAPTERS

11 /CREDITS

10 /REFERENCES

09 /STATS

05 /CASE STUDIES

06 /APP STORES

07 /DEVICES

08 /FUTURE

01 /INTRO

02 /TIPS 1

03 /TIPS 2

04 /CONSUMERS

mobile apps / credits /

11 / pages 42

p.42

CREDITS

Published by Contagious Communications

Editorial DirectorPaul Kemp-Robertson

Editorial ConsultantNoah Koff

Series EditorGeorgia Malden

Edited byLucy Aitken, Georgia Malden

ContributorsJohn Cecil-Wright, Icom / www.icomgroup.net Alexander Fairfax, Jeanie Media / www.jeaniemedia.com

Illustrations ByAm I Collective / www.amicollective.com Chellie Carroll / www.chelliecarroll.co.uk

DesignFLOK Berlin / www.flokline.com

ProductionSmita Mistry, Ellie Kilburn, Dean Dorat

Contagious Communications45 Foubert’s PlaceLondon, W1F 7QH, UKT: +44 (0) 20 7575 1981www.contagiousmagazine.com

Published in partnership withXtreme InformationT: +44 (0) 20 7575 1800www.xtremeinformation.com

Xtreme Information is the market leader in the provision of media Intelligence and competitiveadvertising monitoring from around the world.Xtreme works with the majority of FTSE 100 and Fortune 500 multinational companies, and with every major advertising and media agency. The company is backed by leading US mediainvestors, Veronis Suhler Stevenson.www.vss.com

No parts of this publication may be reproduced, copied or transmitted in any form or by any means stored in any information storage or retrieval system without the pub-lisher’s written permission. Where source material has been reproduced the copy-right remains the property of the copyright owner and material may not be reproduced in any form whatsoever without the owner’s prior consent.

Published April 2009

CONTAGIOUS SPECIALREPORTS /

This report is part of an ongoing series of Special Reports produced by Contagious.

The series also includes reports on Branded Entertainment, Mobile Marketing, Goodvertising and Branded Utility.

For more information, call +44 (0) 20 7575 1886/1882or vist www.contagiousmagazine.com/shop

Branded Entertainment /

Goodvertising /

Branded Utility /