Ubertrends

A Case For Branded Apps

Posted on March 31, 2009 by Michael Tchong in Consumer Electronics, Marketing

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Survey results were eye-opening. Pinch Media, a company that helps developers track iPhone application use, discovered that only 20% of those who download a free application from the iTunes Application Store, used the app the next day, with use gradually declining as time passes by.

The results for paid apps was not much better: just 30% were using them the next day. Yet despite these sobering statistics, developers keep turning out iPhone apps, a mind boggling 6,582 in the past 30 days alone, according to AppShopper. Apple announced on March 17 that there were 25,000 apps in the iTunes Application store, and that more than 800 million apps had been downloaded.

Contrast that with Microsoft, which has been able to attract only 20,000 apps for its Windows Mobile platform, launched on April 19, 2000. Apple exceeded that figure in a scant seven months since opening its iTunes Application store on July 11, 2008 with more than 1,500 apps.

And comparable statistics for the most viable smartphone competitors, Google’s Android (800 as of Jan. 22) and the BlackBerry’s 70 or so, suggest that based purely on software expansion options, the iPhone has already won this war hands-down.

Only Facebook has been able to keep pace with the iPhone. The company announced at its f8 developers conference on July 23, 2008, that the number of Facebook applications had topped 33,000. But there has been no subsequent update from the company. And unlike the iTunes store, Facebook apps lack transparency and, to everyone’s dismay, security.

Those factors may have greatly influenced the deployment of Facebook apps. When was the last time you were sent a virtual drink via Booze Mail? Yes, the “25 Things About Me,” was a huge media hit, but according to Facebook’s own app page, 25 Things only has 12,377 monthly active users, a drop in the bucket compared to the nearly 25 million who have signed up to use its “Causes” app.

More importantly, 25 Things is no longer available due to a “few kinks Facebook and the makers of 25 Things About Me are trying to iron out.” Could those kinks be related to the fact that demand for iPhone developers now outstrips Facebook developers by a 5-3 ratio, according to oDesk, a marketplace for online workteams?

That the balance has tipped in favor of the iPhone is all the more remarkable when one considers that Facebook boasts 175 million global users, compared to only about 20 million for Apple’s iPhone.

But Facebook’s early arrival has given it one significant advantage: the attention of marketers. While there’s no easy way to find out who has launched a branded app on Facebook, “The 30 Most Popular Pages on Facebook” includes such brands as Coca-Cola, Nutella, Pringles, Converse All Star, Ferrero Rocher and McDonald’s.

Other not so popular brands using Facebook include Ben & Jerry’s, Crocs, GAP, Mars, Neutrogena and Starbucks. But it’s Nutella that provides perhaps the most telling case of “un-marketing.” Francesco Castaldo reports that there are some 122 Nutella pages on Facebook, including three product pages and 119 derived ones, i.e. Nutella with bread, Nutella crêpes, etc.

The product pages have about 3 million fans altogether. If those pages were managed by Ferrero Rocher, which makes the popular sandwich spread, they could engage all those users in marketing activities. Ferrero’s Facebook pages only count a total of 1,200 fans.

Perhaps Ferrero should read The Facebook Marketing Bible, which was released in January, and which includes insights on building your own branded applications vs. sponsoring existing ones.

But whether one builds or buys, the facts are clear. Due to its novelty factor, iPhone users are more likely to recall and respond to ads than other mobile phone users, according to the Mobile Advertising Report by market research agency GfK. Lucky magazine’s Shop Lucky app has been “successful beyond their wildest imagination, forcing them to rapidly build out the service,” reports one insider.

That explains why the same logic of building vs. buying should be applied to the iPhone world. After all, there are bound to be many gems among those 25,000 apps that might fare better being sponsored by a leading brand.

And don’t let those earlier cited usage figures distract you. Keep in mind that more than 800 million iPhone apps have been downloaded so far, which means that at least 160 million are being used this very day (that figure includes duplication, net use is obviously lower).

Below is a table that shows the 20 “pure” branded apps that have come to our attention, and their respective store addition dates. Keep in mind that we define pure branded apps as applications that do not offer another portal into a brand’s business. Amazon.com, British Airways, Dow Jones, eBay, Hotels.com, Pandora, Shop Lucky, Trulia, USA Today, Weather Bug, etc. are not pure branded apps.

As we write this, one company has introduced the Kyte iPhone Apps Framework that can be used by any agency to rapidly build a branded iPhone app, complete with fan comments, videos, chat and other iPhone niceties.

The iPhone is still virgin territory, explaining why so few brands have discovered its potential. Yet, there’s no question that due to the heavy use of Macs among advertising creatives, this void will be filled rapidly. We’ve seen the marketing future and it’s small…and moving at lightning speed.

Click on page “2” below, to see our “iPhone Branded Apps Gallery,” with screenshots of each branded application.

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