What Do All These Phone Apps Do? Mostly Marketing

05/10/2009 14:41:00

Stanley Works created an app that lets phones act as levels. Useful applications are seen as a gold mine for building brands.

The company does not know if the iPhone app drove a single sale or fostered any brand loyalty. But based on the 400,000 downloads, Stanley declared the iPhone level a resounding success and is now looking for other tool apps. “It was low-risk experiment,” said Todd Langston, a company spokesman.

Other companies are experimenting as well. Gap gives away an app called StyleMixer app. Pizza Hut has a create-a-pizza app. Redfin, the online real estate agents, puts the Multiple Listing Service database in an app.

In fact, so many are doing apps that they are driving the cost of hiring a developer to build a simple app from $5,000 eight months ago to about $40,000 or more today.

Behind the land rush to apps is a belief that they may be some of the cleverest advertising devised. They are, after all, advertisements that people voluntarily choose to watch and share with friends. Some are even consulted in store aisles when customers decide what to buy. “Apps have a huge advantage,” said Carl Howe, a mobile market analyst for the Yankee Group. “You had to take a step to get it; you are already half sold.”

When people open an app, they give it full attention, which helped drive MasterCard’s decision to follow its A.T.M. locator app with one that would show shoppers nearby stores that offer discounts to MasterCard users.

Apps also give the company a chance to sell cardholders on more services. “It allows consumers to engage with the brand every day,” said Cheryl Guerin, senior vice president for mobile digital marketing at MasterCard. “The more we can get consumers involved with our campaigns, the more we can cross-sell consumers into other opportunities.”

Advertising apps are evolving from the early novelties, like the Zippo Lighter app, a virtual lighter on the phone screen that has been downloaded five million times. Sit or Squat, a sponsored app that directs people to nearby public restrooms, opens with an splash page for Charmin bathroom tissue. Utility apps are more common, like the noise-measuring decibel-meter app given out by Hearos, a maker of ear plugs.

Although novelty apps have had the most downloads, research shows, use of them fades quickly. “You play with it a few times, show it off in a bar, then you don’t use it much,” said Raven Zachary, president of Small Society, an app maker in Portland, Ore.

Current thinking is that utilities that people use repeatedly are the most effective. “People don’t like to be marketed to,” said Michael Margolis, founder of SugarCube, an app maker in San Francisco.

The biggest challenge for apps as ads for now is that they are best suited to niche markets. No single kind of phone holds a big enough audience to attract many mass-market national brands. “An app that runs on an iPhone doesn’t run on a BlackBerry, and the one that runs on a BlackBerry doesn’t run on Android,” said Mr. Howe, the analyst.

Just as in the early days of the Web, when brands rushed to publish a Web site, companies are racing for apps without knowing why they would need them, said Kiyo Kubo, president of app maker Spotlight Mobile, also in Portland. “It’s starting to get to this point that if you don’t have an app, it’s a little silly; you are behind the times.”

Source: New York Times

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What Do All These Phone Apps Do? Mostly Marketing

05/10/2009 14:41:00

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