2. Background
Close to 5.3 billion people around the world globally access their world of
communications through Mobiles1. A well researched study in India documents that there
are more mobiles in India, than toilets2. Mobiles in social development are truly
becoming an integral part of social and economic development as researched and
documented by social studies in India which indicate a GDP increase of .6%-1.2% for
every 10% increase in mobile penetration3.
Mobiles will be the internet delivery medium to a vast majority of global population and
yet it will also be medium for experience delivery. Mobiles will enable value creation,
collaboration, co-creation in real time, for the next billion internet users. The increasing
connection between physical devices and online services will drive new applications and
interfaces that will consume personal data and turn it into useful, personal, social, visual
and tangible benefits for users as well as businesses. In effect, Mobiles will gradually
become media devices over and above voice and data communication devices.
Businesses and brands will look to new ways of engagement with and influencing
customers through branded mobile applications. Applications are the face and feature of
Mobile internet going forward4. Mobile Applications will combine advantages of
mobility to user behavior, context, social layers, discoverability and platforms such as
location based services, payment mechanisms, augmented reality, profiling and
recommendation mechanisms and more to deliver experiences unique, relevant and
contextually adept to users. Thus the role of mobile based applications gradually evolves
into mobile media. Advertisers, Corporates, Businesses, Governments and other profit
and non-profit organizations will seek to leverage the mobile media to engage their
customers with user-relevant experiences.
While Applications based on utilities5 could roughly be defined as Mobile Media 0.5,
Contextual App-vertising6 (Advertising through Apps) is possibly Mobile Media 1.0.
Applications providing branded experiences which are contextually relevant and targetted
will take engagement levels between brands and consumers to a hitherto-unknown and
undefined level which is defined as Mobile Media 2.0.
The market for mobile-media has been embryonic till date, but that will rapidly change as
trendsetting companies/organizations will focus on products and services that benefit
from the unique characteristics of mobile applications. As this growth surge happens,
mobile media will take its place alongside ATL, BTL, TTL as a significant media
channel in its own right.
Mobile media as an advertising channel will surpass Web 2.0 and app centric advertising
will become content, almost entirely. Advertisers will, within 2-5 years, massively
convert to mobile, location-aware, targeted, opted-in, social and user-distributed ads;
from 1% of their budgets to at least 1/3 of their total advertising budget. Advertising will
become ContVertising7. Google expects revenue windfalls of 10X scale of what they are
today, in 5 years, driven by mobile and video.
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3. Web 2.0 and Mobile Media: Impact on Advertisers
How many large and reputed organizations would you know of which don’t have a
Facebook page or haven’t FBed a campaign?
Is their a single brand which exists today without a web-site?
The hugely popular Pepsi “Change the Game” and Vodafone “ZooZoo” have huge
Facebook presence. Pepsi has a million “fans” on the Pepsi FB page.
Dell made $6.5 million last year selling hardware thru Twitter-engagement8. Around 20%
of the conversation in Twitter is brand based9 i.e some or the other brand gets discussed
either positively or negatively
The bottom-line for corporates and businesses is that a delay in engaging through mobile
media could mean missing out on the5th P: People10
Given the prodigious expansion of reach in mobile internet, it will not be very long
before brands and businesses would need to establish their presence on mobile as well.
This presence will run deeper than just the mobile site. It would include creating brand
awareness, user talk back and communication with the brand, brand led utility tools,
brand-user engagement and experience and a holistic branded media experience at a later
stage. The delivery of this branded experience will be through the branded applications.
This thus opens up a new channel/media for brands to engage customers and advertise.
Going forward this would be one of the fastest growing media channels for brands will
nearly 33% of marketing monies being apportioned to mobile application led
advertisements in a 5 year horizon.
____________________________________
Brand Applications will be the key to delivery of branded experience on
mobile
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4. Evolution of Mobile Applications
Apps was declared the word of the year 2010 by American Dialect Society11.Today it is
difficult to say whether the popularity of smartphones is driving mobile apps usage, or
vice versa. There were about 90 Mobile application stores till 3Q, 2010 and the number
today is around 150.
There is significant money in the mobile applications markets. Even though 80% of apps
downloaded are free, global revenues from apps reached $11billion in 2010. Almost all
analysts agree that apps download and monetization will grow by factors of 4X-9X in the
next 4-5 years horizon. This increase in the revenues generated by app downloads and
usage will be supplemented by innovative services and business models built around
mobile apps. These services will evolve quickly in the coming years and add an
important new dynamic to the apps businesses. Majority of the new monetization would
come from advertising and associated services delivered by apps centered around and
relevant to the user.
2010 2011
Downloads 47% 38%
Advertisements 11% 17%
In-app Purchases 8% 31%
Upgrades .3% 2%
Did not monetize (Branding 33.3% 13%
only)
While the monetization of Apps through the Brands and Advertisements would see a decline in 2011 vis-à-
vis 2010, it would emerge as a strong revenue stream in the near term horizon as Apps evolve from “Just
Apps” to “experience providers”. Data from www.readwriteweb.com20
Principally, apps have started evolving as domain differentiators. Apps as we know now
are more devices led differentiating mechanisms.
The best examples hereon are the different apps stores: Apple, Ovi, Android,
Blackberry, WebOS, Windows-Phone 7 and more. These are being used by OEMs
to differentiate and brag about their devices. The principal intent here is to build
direct customer relationships and create device stickiness for their brand of
devices.
Massive app proliferation has forced Telecom Operators, ISPs and Content aggregators to
read this trend in a new light. Apps are being leveraged by service providers to build
relationships with end-users by providing key associated services and avoiding becoming
a dumb pipe. Thus, the next round of apps stores will be around network or carrier
differentiation.
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5. Vodafone, AT&T, Verizon, Opera, Airtel, Aircel, Orange and other carriers are
stepping up ambitious investments in the apps space.
A trend that is also emerging is apps as a channel differentiator. Retailers and e-tailers
such as Amazon12 and Best Buy are now becoming very important players as customers
are looking to these domains, to provide a broad array of services, devices, applications,
content which is device and platform agnostic. Independence and trusted third party
status is a powerful value proposition
The App as a channel model leverages key assets of the retail platform: choice of
products and services, equity in the e-commerce space, security, value, platforms
that can effectively support search, discovery, download and payment
mechanisms.
There is a lot of competitive action that is already under way as Social collective buying13
emerges as mainstream. Services such as Foursquare, Google Latitude, Facebook Places,
LivingSocial, Yahoo Local and Groupon are wholly dependent on location based features
based out of an application delivery experience14.
Mobile Applications emerging as a marketing channel will not only
redefine Monetization basics but will also change effort, thoughts and
spends behind Mobile as Marketing medium.
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6. Mobile applications as media channel
ICICI Bank has introduced an Android based application which is a suit of banking
utility services which provides one touch/click mobile banking solutions to its
consumers15.
Debenhams has launched a mobile app which lets its visitors catalogue, view and ear-
mark sale-dates and prices16.
Groupon and LivingSocial will be announcing their Android based apps for collective
buying based on location specificity of deals14.
Formula 1 recently unveiled an App to follow its races, cars, teams and drivers along
with venue booking services for the F1 die-hards18.
Times of India has launched an App to add another dimension to its media streams. It
now straddles Mobile apart from the print and web channels19.
Mobile media is coming of age in matured markets such as US with nearly 47% of
mobile subscribers using mobile media (browsed the mobile web, accessed applications
or downloaded content)21. This is up 7.6% against 2009 attributable to smartphone
adoption, 3G/4G device ownership, and ubiquitous data plans, all of which facilitate the
consumption of mobile media.
Evolution of Mobile Applications
Network/
OEM/ Device Channel Branded Applications as
Carrier
Differentiators Differentiators Applications Media Channel
Differentiators
1st Gen Application
2nd Gen Application
3rd Gen Application
4th Gen Application
5th Gen Application
2010 2011
This Graphic is a representation of evolution of Apps as enablers for different domains. The apps listed
earlier in this section are Branded applications and we are already seeing a movement towards branded
applications. The culmination of Apps as a media channel for sponsors and advertisers is the next step in
this evolution.
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7. As commerce migrates from the electronic to mobile, these utility apps stated earlier will
be instrumental in driving traffic, disseminating information, engaging customers in the
branded app experience. This is the plain vanilla function of a mobile application in
mobile media space.
However, the fifth evolution of mobile apps will be centred around the user, functioning
as a media channel for brand experiences to be delivered to users.
For instance a LBS and Layar20 based travel app could profile a user and not only
suggest him places, travel routes, hotels, travel plans and itinerary but also could
point the traveler to like minded travel groups, collective buying, on-spot travel
guides, hire-a-service and local marquees for a holistic travel experience22.
Or for a car buying experience, apps could help in choosing the car, its color and
other technicalities, dealerships. In addition it could suggest the interiors, leather
and electronic accessories/fitments, car loan and car insurance, car registration
and more.
In effect the whole user journey could be mapped on apps and critical user needs could be
translated to monetization opportunities23. Flip it over to the brand, and this would thus
become a channel both for media delivery and experience delivery for the user.
One would require a lot of “engines” running silently behind the app and in the server
such as LAYAR, LBS, Analytics, Profiling and Recommendation engines, Shopping
Carts, 2D scanners, RFID, NFC, Banner-ad serving templates, Virtual Buying, Templated
Applications deliveries, Collective buying, Search, Ad servicing algorithms, Mobile
payment mechanisms and more to deliver the brand experience on the mobile.
Features of Mobile Apps as a Media
Platform
• Transaction Capabilities
• Targeting/ Personalization Capabilities
• Social merchandizing Capabilities
• Provision for business and campaign
management
• New user engagement models
• Multi-device and multi-screen presence
• Building Brand Experience, Engagement and
intimacy
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8. Mobile Applications as Media/Advertisement Channels: Beyond
Advertising 2.0
Mobile Applications will evolve as a parallel marketing channel23 which would enable,
enrich, engage and make a richer experience of the purchase cycle, from awareness,
consideration, conversion, loyalty and service and measuring the metrics of the marketing
efforts. Being able to measure the effectiveness and RoI of application led marketing
campaigns could be another key to its acceptance as a media channel.
Initially, most of the mobile-led marketing campaigns delivered through applications will
focus on branding and user-generated content in support of existing marketing initiatives.
That is the creating just a level of awareness with mobile-apps and creating a presence in
mobile space.
Media Properties Typical What Mobile Apps as a Marketing channel enable
Marketing
Activities
Creating Branding Creates Mobile as a new Broader environment for
Awareness promoting a brand
Content Creation Apps as a forum for social/viral and often user generated
content
Invoking Traffic Mobile complements the existing digital mediums and
Common Customer Experience
Consideration Generation creates additional ways to drive traffic to own site, mobile
and social network presence
Engagement Applications to engage potential customers and deliver
user –relevant and customized feed to each individual user.
Innovation/ Proactive customer engagement in product/service/ system
Ideation innovation
Conversion Lead Generation New mechanisms for targeting and incentivizing potential
customers.
On ground engagement with consumer in terms of location
and context aware services
Purchase m-commerce channel
Decision Building unique buying propositions through the video and
other experiential process
Purchases as a process of continuous user-brand
engagement at every stage
Creating Loyalty/Service - Advocacy Deeper connection with users throughout the AIDA
process, purchases and consumption processes
Interactive activations to market/sell the brand
Mechanisms for community based buying
Measurement Rich demographic and socio-graphic data for effective real
time customer engagement with the brands
Mobile apps as a media channel would have many properties and support a lot of marketing activities. The
table above is a representation of the versatility of Apps in delivery of branded media networks to
users/consumers.
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9. The second phase of mobile-app based marketing efforts would be to engage potential
customers and deliver user –relevant and customized feed to each individual user for
targeting new products, lead generation and building a dialogue with the customer. This
will combine the benefits of social media to create a larger advocacy for the brand.
_____________________________________________________________
User Needs Journeys Experience
Mobile-Applications will become main-stream as the real life consumer
behavior is replicated across in a simulated environments across the
internet
The engagement and experiential models would become richer and offer more experience
to create deeper connection with users throughout the AIDA process, purchases and
consumption processes. Interactive activations would be served up to market/sell the
brand often to a community of users. Leads can be significantly enhanced by new
mechanisms and engines for targeting, data gathering, profiling and recommending
“likes” and “interests” to user communities.
A deeper level of engagement would encompass the role of engines as invisible
applications and intelligent agents which would dive greater depths of engagement for the
user as well as the media sponsor. A list of 17 such engines which could be used as
wrappers enriching media experience around an application has been provided earlier.
Concepts such as social-shopping-buying, mobile community building and group-
ideation are higher order derivatives of mobile-application-media led marketing which
would happen once the efficacy of the “application as a media channels” is established.
Mobile-apps as a branded medium is destined to become the biggest ad delivery platform
in the next 7-10 years and the growth of mobile branded experiences (the least of which
is advertising) will exceed the TV and Internet medium both in reach and revenues.
While mobile ads will become more compelling and engaging, it will not kill older media
like TV, Print or Internet as each will adjust to the newest medium.
_____________________________________________________________
Brands will use apps to drive hundreds of millions of dollars in sales.
Apps will become a core revenue generator for businesses.
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10. Getting Started: The Imperatives
For many companies, mobile media represents a new channel with much to learn and
master. There are four imperatives that every company should keep in mind:
Imperative 1: Jump in soon and learn by doing
Imperative 2: Develop a strategy for Mobile
Imperative 3: Define what the customer experience should be and the data required
from the user:
Imperative 4: Integrate mobile-application media channel into an overall multi
channel strategy.
Conclusion
With 752 million mobile subscribers in India24, mobiles have become embedded in the
fabric of everyday life for millions of consumers. Companies will seek to find ways to
leverage these online relationships for commercial gain. Mobile-Applications promise to
be the next generation media channel: individualized, customized and relevant, even
while mobile are becoming the next generation e-commerce engines. Marketers and
strategists are smart to feel a sense of urgency in understanding and experimenting with
direct commerce within these platforms; early movers will have a solid foundation on
which to build their business and brands as the application platform evolves. As always,
learning what doesn’t work will be as important as learning what does.
Each step along the path to purchase – generating awareness, enticing customers to
purchase, cultivating loyalty presents its own opportunities. Companies are considering
targeted efforts all along this path, while integrating applications as a part of the over-
arching multi-channel media strategy. Developing an integrated and comprehensive
strategy for gathering customer data and mining it for insights, imagining new methods
for customers to discover, experience, decide and buy together and building a compelling
customer experience will be essential to succeed in this new era of application led
mobile media channels
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11. Endlines
2010 has been a landmark year in terms of apps-usage, evolution of apps and
mobile-media usage
The mobile-app consumption is growing strongly
Smartphones are key drivers of audience, usage and advertising
Tablets, e-book readers and other connected devices redefining “mobile”
Mobile-media usage through Applications is becoming a daily activity
Applications are increasingly becoming a transactional channel
Brands will feature as significant stakeholders in migration of apps to mobile-
media
Mobile applications will be the companions or concierges in user journeys
starting from awareness to purchase, loyalty/ advocacy, group buying, talk-back
and more.
The app delivery, discoverability and user experience will be critical in
determining the app reach and stickiness in the media context.
App delivery across multitude of screens: TV, Mobile, Web and even car
dashboards will help establish app-ubiquity
References
1. International telecommunications union- ICT facts and figures: The world in
2010. http://www.itu.int/ITU-D/ict/material/FactsFigures2010.pdf. Release: 27th
January 2011
2. India has more mobile phones than toilets: UN Report. (Telegraph UK).
http://www.telegraph.co.uk/news/worldnews/asia/india/7593567/India-has-more-
mobile-phones-than-toilets-UN-report.html
3. Excerpts from Vodafone-Africa Policy paper published in 2005:
http://www.vodafone.com/content/dam/vodafone/about/public_policy/policy_pap
ers/public_policy_series_2.pdf and Deloitte study for lowering mobile taxes to
boost usage and growth: http://www.deloitte.com/view/en_GB/uk/news/press-
release/4e47f0b2326fb110VgnVCM100000ba42f00aRCRD.htm
4. Apps: The new face of Internet (Ronnie05’s blog). http://t.co/L1OofUQ
5. Mobile Applications evolving into utilities: Mobile marketer and Chris
Cunningham http://www.mobilemarketer.com/cms/opinion/columns/2386.html
6. Mobile Marketing: Is “App-vertising” the answer? AdAge Digital and Garrick
Schmitt. http://adage.com/article/digitalnext/mobile-marketing-app-vertising-
answer/136622/
7. Contextual Advertising: Definition by PCMag
http://www.pcmag.com/encyclopedia_term/0,2542,t=contextual+marketing&i=56
351,00.asp; Description and explanation by Wikipedia
http://en.wikipedia.org/wiki/Contextual_advertising; Article at Harvard Business
Review by David Kenny and John Marshall.
http://hbswk.hbs.edu/archive/2124.html
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12. 8. Adam Ostrow, “Dell rides Twitter to $6.5 million in Sales”, Mashable.com,
December 9, 2009, http://www.mashable.com/2009/dell-twitter-sales/
9. One in Five Tweets is Brand related: Pen state university.
http://www.marketingcharts.com/interactive/one-in-five-tweets-is-brand-related-
10404/
10. People: The 5th P of marketing: Kinesis. http://www.kinesis-
cem.com/Insights/Fifth-P.html
11. Linguists Vote App word of the year: GMA news
http://www.gmanews.tv/story/210090/world/linguists-vote-app-word-of-the-year
12. Profiling the Amazon Apps store (Ronnie05’s Blog) http://t.co/y93uuFq;
Strengths and weaknesses of Amazon App store (Ronnie05’s blog)
http://t.co/ZiRC0ZK;
13. Future of Local Commerce: Collective Buying (Ronnie05’s Blog) Part I
http://t.co/6Npdxd5
14. Future of Loval Commerce: Collective Buying (Ronnie05’s Blog) Part II
http://t.co/vTeAp91
15. ICICI mobile banking application iMobile: FoneArena and Varun Krish.
http://www.fonearena.com/blog/802/icici-mobile-banking-application-
imobile.html
16. Debenhams embraces Android and Nokia: GoMo News:
http://www.gomonews.com/debenhams-finally-embraces-android%E2%80%A6-
and-nokia/
17. 2011 Mobile trends, according to developers (Read Write Web):
http://www.readwriteweb.com/mobile/2011/01/2011-mobile-trends.php
18. Formula 1 2011: Official App coming to iOS and Android.http://www.product-
reviews.net/2011/03/14/formula1-com-2011-official-app-coming-to-ios-and-
android/
19. Times of India launches Android App: AndroidOS.in.
http://androidos.in/2011/03/times-of-india-launches-android-app/
20. Augmented Reality: How it works? (Ronnie05’s blog) 2011 Mobile trends,
according to developers (Read Write Web):
http://www.readwriteweb.com/mobile/2011/01/2011-mobile-trends.php
21. The ComScore 2010 Mobile Year in Review: February 2011
22. Apps: The news face of Internet (Ronnie’s Blog) http://t.co/L1OofUQ
23. Evolution of App Stores: Putting the brands perspective to monetizing apps
stores. (Ronnie05’s Blog) http://t.co/44Ooan5
24. India reaches 787 million telecom subscribers… Mobile subscribers stand at 752
million! (India Business Blog) http://trak.in/tags/business/2011/02/11/indian-
telecom-subscribers-growth-december/
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