Gladys Santiago

Apple’s iPhone 3G Encourages App Store Sales

Posted in Marketing, Media, Mobile by Gladys Santiago on July 10, 2008

With the unveiling of its iPhone 3G and App Store on July 11, Apple is positioned to influence how companies provide mobile services and software to consumers.  Many web-based utilities have been available for free because of ad-supported content, but the launch of the App Store proves users are more than willing to pay for applications such as games, ringtones and GPS.  Because mobile media is so new and even the Internet’s ad-model is highly scrutinized and debated, Apple may prevent mobile marketing from ever leaving the ground.  iPhone users are extremely media savvy although they make up only 0.5% of mobile subscribers, “Their behavior is a window into the future of mobile media consumption”  (via: Nielsen).  iPhone users are heavy media consumers with considerable spending and word-of-mouth power.

Even though the use of mobile media increased tremendously in 2007 with 87 million subscribers, marketers have yet to figure out a way to profit from their ads.  Mobile marketing only generated $500 million in revenue last year and, many developers do not want to roll the dice and risk coming up craps  (via: Time).  However, in such a segmented media environment mobile remains an excellent way for brands to increase their reach and consumer engagement.  The issue that many marketers fear is the audience resentment, annoyance and backlash that resulted from pop-up ads.  In order to keep up with continuously evolving media usage, marketers have to experiment with ways to communicate with consumers.  Many people would gladly accept the inclusion of ads for mobile applications that entertain and them make life easier.

Not one to let an advertising opportunity slip away, Google is set to enter the mobile industry with Android.  The platform is supported by 30 companies many expect its features to be free and primarily ad-supported.  Google has even invited developers to create applications through the Android Developer Challenge, in which the company is offering $10 million in prizes.  The Apple approach seems more appealing to developers because creators receive 70% of the sales.  A recent Nielsen insight report states, “…leading companies have an opportunity to leverage the capabilities of the iPhone and other media-centric handsets in a way that demonstrates innovation and addresses a market of cutting edge early adopters.”

Mobile marketing presents unique challenges and difficult to measure results, however the monetization model of the landscape may soon be defined by either Apple or Google.  Both are companies that consumers hold in high regard and enjoy interacting with and will surely create dynamic applications.  By the way, where is Microsoft in all of this?

via: “1+1=3: Mobile as an Extension of Traditional Consumer Marketing” available from ARF.