Posts Tagged ‘iphone’

Early iPad Impressions: Not an “Ad” Medium

Tuesday, June 15th, 2010

A little more than a week ago I purchased an iPad. Typically I am an early adopter for tech toys such as this for a few reasons: First, in my job as strategy leader of a digital agency, my team and clients are eager to hear our take. Second, I am always looking for tools that will help me be more effective and/or efficient in what I do for a living. In this case I have been increasingly feeling the limitations of my laptop, especially when I want to, say, show a few slides or websites to a client over breakfast or lunch; the last thing you want to do in those situations is haul a heavy bag around and wait 10 minutes for the thing to power up and down. But I was really most interested in purchasing an iPad to understand for myself whether this promising/hyped new category of devices would be dominated by the old, interruptive model of advertising or start with a platform for Marketing with Meaning. And after a few days of use I can safely include that the latter is the case.

So far, the interruptive model for iPad advertising seems to be moving quickly up the hype cycle. Some people actually believe that this will—finally!—be the year of mobile advertising, even before Apple got into the game. Apple is preparing to launch its own advertising network for iPhone and iPad apps with special creative formats, dubbed iAd. It has raked in $60 million in commitments already from some of the biggest brands in the world who want to test it first, including Unilever, AT&T, Sears, State Farm, and Disney. The hope is that millions of app developers will earn a living out of turning a percentage of their mobile pixel space over to new ad networks and wait for the money to roll in—and marketers can reach people closer to where and when they actually pull out their wallets to buy stuff.

But a few of us are warning that mobile advertising is not necessarily the next big thing. Along with many others elsewhere, I wrote in this blog back in May about the limitations of iAd as an advertising option. The Wall Street Journal blog recently featured an interesting quote from Kevin Ryan, former CEO of online-ad company DoubleClick: “The answer that people want to hear is that mobile is going to be huge.” “The People” obviously means investors who hope to sell their mobile-ad companies to the highest bidder. But it also includes the largest advertisers in the world—who are watching TV commercial ratings and print subscriptions sink and know that they need to figure out a mobile solution quickly.

The central challenge, however, is the lack of “scale” in mobile marketing. At the end of the day, traditional advertisers such as the big names above depend on an interruptive model in which many millions of eyeballs are exposed to a short message in hopes that some small percentage leads to a sale. Just because they long for this scale does not mean it will actually arrive. There are already too many ad impressions to compete with, too many media options for consumers, and too many mobile-phone platforms to allow for such scale.

The alternative choice for mobile—and advertising overall—is Marketing with Meaning. In mobile devices this looks like creating value-added apps that a smaller percentage of people download (as compared to mass interruptions), but because the brand engagement is so much superior, this small group buys products and services at a much higher rate, over a much longer time period. This is the bet being placed by brands as diverse as Charmin (public restroom finder), Nationwide (car accident guide), Starwood (loyalty points tracker), and REI (ski report). The Gilt Groupe, a high-end online retailer, is now seeing 10% of its sales come from the iPhone and iPad. The reason? A killer interface made specifically for these platforms, and a business that has great deals for a limited-time only—i.e., if you wait to log on at your desk to check out the specials they might already be sold out.

Now to my handful of impressions after using an iPad for a few weeks:

  • First, the device is exceeding my expectations. I do love it! I expected to have a tool that would allow for easy reading of email, books, and websites, as well as something simple for presenting slides. It does that more than adequately, and so much more. The keys to greatness lie in a brilliant piece of hardware. The device is thin, lightweight, features an incredible screen quality, responds well to the touch, and you cannot beat the easy on/off button. This is really what computing should be about in 2010, rather than the endless boot-up of bloatware operating systems and unknown creatures in the taskbar bin. With this platform and basic OS, the possibilities for developing apps that make best use of it are limitless. So far I’m loving Netflix, Kindle, The Weather Channel, TweetDeck, and GoodReader. And I’m now reading the paper newspaper again thanks to USAToday and WSJ apps. So many great apps and we’re only in the first couple of months of this thing, folks!
  • The “magazine” model of advertising is weak. I have downloaded a few magazines such as Wired and Esquire to test what this experience is like. Chris Anderson, editor of Wired, talked at an Ad:Tech speech a few months ago about how his company was betting heavily on the iPad and promised to have many cool bells and whistles in its digital version. I also checked out Esquire on an app called Zinio that lets you subscribe to digital editions of many popular magazines. At Ad:Tech, Anderson was excited about the fact that people would be “forced” to flip past each full-page ad in his virtual magazine. (See more on his speech here.) In my experience, the iPad magazine reading is fine, but I hated having to swipe past each ad. This is a worse experience than a physical magazine, which you can simply shuffle past quickly. In this case you’re likely to get a finger cramp with the number of ads crammed in! Again, maybe people notice such ads in the short term because this is a novel experience, but after a while we will all just tune out another piece of unwanted clutter.
  • Improved websites might eliminate the need for apps. What I mean here is that the Web-surfing experience with the iPad is so strong (despite the lack of Flash) that you might not need to develop apps to provide similar value to users. For example, I considered buying the ESPN app for iPad, but then I just pulled up ESPN.com on my iPad’s Safari browser. The latter experience was outstanding because the network has built a site optimized for iPads. So there’s no need for the $4.99 app. Remarkably, this is something I have not heard in relation to the launch of the iPad. It could be a threat to Apple’s desire to “control” the user experience for its own profit, as there is no need to purchase or download a special app. For consumers, it means you skip finding/downloading/updating apps. We are already working on making iPad-ready adjustments for some of our clients.

Despite marketers’ desire to make the mass/interruptive model work in mobile, and Steve Jobs’s record of overturning and improving business models, my advice to brands is to create an app (or an optimized website), not an ad buy, as a way to connect with consumers on the iPad. There are simply too many challenges of making an interruption pay out—and too many opportunities to delight people by creating added value on the iPad platform.

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Posted in Apps, mobile | 1 Comment »

MasterCard App Begins to Deliver on ‘Priceless’

Friday, July 31st, 2009

For as long as I can remember, credit-card marketing has been stuck an endless cycle of equity advertising. It’s a story we see in categories as diverse as automobiles, beer, and life insurance: When there is little innovation and lack of differentiation among major brands in a category, their advertising agencies are called on to gin up something remarkable.

In credit cards, the pattern has held firm for years, and the result is an endless loop of ads that celebrate how much life can be enjoyed because of the convenience and buying power of credit. Visa recently moved from its “Life Takes Visa” campaign to the current “Go” work, which includes millions of dollars in celebrity endorsements (Michael Phelps), celebrity voice-overs (Morgan Freeman), and licensed music (Moody Blues). American Express has had “My Life, My Card.” And MasterCard has stuck with its own version, “Priceless,” for more than 12 years. But a few weeks ago MasterCard took one small step out of the pack with an iPhone app that finally does something “real” through meaningful marketing to deliver on its promises.

The MasterCard Priceless Picks app, a free download from iTunes, is a clever tool that recognizes your location and presents a 3-D map of various “Priceless Picks” in your area. Its use of the touch screen interface is excellent, and within seconds I was able to explore the city around me. Unknown people or bots have populated the maps with restaurants, bars, museums, and popular items on sale. A little clicking offers more information, and the chance to send to a friend, flag as improper, or get more details. I actually discovered two interesting places across the river from my office, a coffee shop called the Bean Haus (“best place for a snug cup of coffee”) and an ice cream shop called Sweet Tooth, which apparently has great homemade chocolate chip. The video below from MasterCard shows a few user examples:

As a MasterCard customer, I really appreciate that the brand is trying to actually deliver on its “Priceless” brand promise, and the choice of an iPhone app works because it is a tool that is truly integrated with our daily lives. In fact, this is the second iPhone app from MasterCard. A few months ago it launched an ATM Hunter that allows users to find ATMs near their location, and sort by preferences such as drive-thru and no service charge.

As a Meaningful Marketer, I love that MasterCard is carving off at least a small piece of its mammoth budget and adding value to its customers’ lives through marketing itself. While Visa dumps hundreds of millions of dollars into beautiful TV “film” that is aimed at brainwashing viewers into pulling its card out more often, MasterCard has given us something worth talking about and playing with, and it just might help us discover something new and “priceless” in our hometowns or travel destinations. This kind of marketing (rather than a pretty new ad campaign) actually has a chance of helping the brand differentiate in the credit-card category.

I do admit there are some bugs and bumps in this app. I would expect a lot more than a handful of flagged locations in downtown Cincinnati, for example. And some of the picks are pretty lame, such as ”$13.99 Huggies or CVS/pharmacy infant formula.” In an Ad Age article about the app, marketing consultant Tom Anderson suggests that, “You only have one chance with an app like this. If users come to it and it smells like an ad, then it is an ad, and with no value added it will die quickly.”

I actually disagree that the MasterCard app has to be perfect out of the gate, as long as the company goes into the app with a plan to continually learn and improve. There is much to be learned from seeing thousands of actual users engaging with it and adding their own picks. Some features such as its partnership with ShopLocal (which likely supplied the questionable Huggies ad above) might just be temporary tools that help get a critical mass of content while people are just discovering the app. At worst, people who have a subpar experience will revisit the app sometime in the future when they are bored and give it another chance.

I’m rooting for MasterCard’s value-added app approach and plan to upload a few of my own Priceless Picks, while pulling out my own MasterCard more often.

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Posted in Applications | 1 Comment »

Selling Your Marketing—The Holy Grail

Friday, May 22nd, 2009

The most intriguing story I heard last week was that Apple has made somewhere between $20 million and $45 million in revenue from the 1 billion iPhone apps that have been downloaded from its store to date. In blog posts and Tweets about this estimate, the most common reaction was “That’s all they’ve made?” Since most apps are free, and Apple gets only a 30 percent cut of any revenue from paid-for apps, this seems like relative nickels in the grand scheme of things.

But one @reply from my Twitter feed, Rob Saker, had a great point that’s been sticking with me:

“I’d love [$20 million] with no inventory, spoilage, and few promotional costs… They may have found the Holy Grail of marketing, promotion that in itself generates revenue.”

To paraphrase Rob, Apple’s true take from the app store is much higher considering that these apps are the best marketing possible for the pricey iPhones and revenue cut from AT&T service (30 million of which are now in the market). The ulitmate test of Marketing with Meaning is when people actually pay for your marketing. And I believe marketers must set this as a new goal and revenue source for the work they do.

iPhone apps offer the perfect way for companies to create marketing that in some ways pays for itself.  Kraft’s very successful and slick iFood app is probably the best-known example. At the iMedia conference in March, the brand owner of the program, Ed Kaczmarek, said that Kraft chose to charge $.99 for the tool because they felt it was valuable, and putting a price on it actually helped communicate that value to consumers. That’s right-charging for the marketing made it even more valuable and meaningful. The result: iFood hit its three-year download goal in a matter of weeks.

At Bridge Worldwide, we’re developing a few iPhone app ideas, and my strong guidance to clients is to charge at least $.99 for them. Not only do I believe this adds to the value impression, but business managers start to get excited when new revenue comes in. Even if it doesn’t add a lot to the bottom line, the money that comes from selling apps can be directed toward further development and marketing of the app, which, in turn, can drive greater app quality and total downloads.

Another related and exciting piece of news last week was that Amazon has opened up a beta program to allow bloggers to get paid for people who subscribe to their blogs via the Kindle. Subscriptions are priced up to $1.99 per month, and the blogger gets 30 percent of the revenue. Of course, this is small beans right now, as there are likely not even 1 million Kindles on the market yet. But, again, we’re starting to see a model in which people are willing and able to spend a little for blog content. And blog content is almost always considered “marketing.”

In a recent post on his blog, John Gerzema makes a great point about consumer mentality of micropayments:

“The luxury of micropayment pricing is that a consumer can instantly make a low-risk value judgment. Limiting risk allows for product experimentation leading to little failures or successes and the consequent expansion of brand loyalty.”

It’s still too early to make this claim across the board, but I believe most iPhone and Kindle owners do not blink at being asked to spend less than a buck on impulse for a useful service. Frankly, I find it hard to believe that killer apps such as Facebook and Pandora for iPhone do not even charge a penny for their services. Both lack a viable business model today, and it’s so easy and cheap to make a buck through the app store. But I was also disappointed to see that Nationwide doesn’t charge for its very cool Car Accident Toolkit app, and Bloomberg—a company that charges thousands of dollars for its proprietary information and terminals—is giving its milk away for free as well. The industry actually needs these big players to start charging for apps in order to set the bar. Let’s not lose this opportunity to convince people that free is not the standard!

I’m very excited to see where brands play in the world of charging for their content. I’m so excited that I just signed up for the Kindle blog program, and invite those of you who are Kindle owners to subscribe to Marketing with Meaning now. I promise that every dollar that comes will be put right back into making this blog bigger and better. In fact, I will send a free Tide Loads of Hope T-shirt to the first person who subscribes and emails me the receipt!

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Posted in Marketing that Pays, Solution, mobile | 1 Comment »