fast take on - the future of apps

8/9/2019 Fast Take On - The Future of Apps

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January 2015

THE FUTURE OF

APPS


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In this ‘Fast Take’ we review how mobileapplications are changing consumer behavior an

the corresponing opportunities an imperativesthat apps present to brans!

"e also e#amine the in$uence our app%centricculture is e#erting on other &orms o& meia an the

&ront%an%center role apps will play in emerging

spaces such as wearables' payments' an theinternet o& things!


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APPS PAST AND PRESENT:the origin o& apps an the current status(uo

THE CONSUMER PERSPECTIVE:how apps are in$uencing consumerbehavior

WHAT BRANDS NEED TO KNOW:opportunities an imperatives &or marketers

TRENDS: how apps are evolving an thekey role they will play in emerging plat&orms

TAKEAWAYS:key insights an case stuies


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Apps Pastand Present


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Apps ava!a"!e #!$"a!!%$n OS and Andr$ds&rpassed '() *!!$n n'+,-.as /e enter '+,)t0$se n&*"ers /!! 1!*"and apps /!! 1$ntn&e t$#r$/ n *p$rtan1e 2$r"rands(


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)obile applications have been arounmuch longer than most people reali*e! The +rst apps were simple calenar anspreasheet utilities an came pre%installe on the +rst ,-.' the ,sion /eries' in 13! The more sophisticateevices that &ollowe such as the ,alm,ilot an 4lackberry oere games anmore comple# tools that consumers coul

choose to install6but the pickings wereslim an accessible to a very small subseto& consumers!

It wasn’t until the .pple .pp /torelaunche in 200 that apps became atruly mainstream phenomenon! In thoseays' mobile websites were still in short

supply' typically slow to loa' an har tonavigate! Fast%loaing' streamline mobileapps oere a welcome alternative! Thespeey aoption o& the +rst i,hone' anthe abunant apps evelope by rparty .pple enthusiasts an select branpartners introuce a new moel &orcontent consumption an a newecosystem in which brans coul play!

T0e Ear!% Da%s O2 Apps


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THE MA3OR AND MINOR

P4AYERS

.pple an 7oogle own the biggest app

marketplaces! 7oogle’s &ootprint is slightly

larger but .pple consumers are still

perceive as more valuable by avertisers

ue to their generally higher 88I an

higher propensity to engage in all &orms o&

m%commerce!

T0e C&rrent App E1$s%ste*

NICHE P4AYERS

9ne key signal o& the growing

importance o& apps is the rapi

emergence o& new app stores!

"ireless carriers' hanset 9:)s' an

inepenent r parties are launching

store&ronts to sell native ;i!e!

ownloaable< an 8T)=5 apps!

,(5 MI44ION,(' MI44ION

The ne#t biggest app purveyors')icroso&t ' .ma*on' an 4lackberryhave signi+cantly smaller inventoriesthat mirror their smaller market share!

5++K '-+K ,5+K /tats> /tatista 1!15


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T0e M$"!e App 4ands1ape W0at6s Drvn# T0e Trend7

8T0ere6s an app 2$r t0at9

.pple’s tongue%in%cheek slogan topromote the i,hone 7 is now atruism! There is literally an app &oreverything' &rom learning a newlanguage to tracking the (uality o&your sleep!

?onsumer enthusiasm shows no signo& waning@ in the A/' users now spen52B o& their igital time using apps1 an more than hal& o& mobile usersaccess apps every ay2! Cet a stuy&rom ?ompuware reveals that 0B%0B o& apps ownloae are use

once be&ore being elete an thebillions investe in app install asinicate most brans have yet toiscover a winning &ormula &or themeium

The proDecte E5b to be spent onapps globally in 20153 unerscores

the &act they aren’t going away butthe lanscape6an the opportunity6

Got only o we spen 52B o& our

igital time in apps' we spen ;< $2$&r *$"!e t*e n apps5! 8owever'a small han&ul o& categories account&or that time an brane apps barely+gure into the e(uation! :#actnumbers aren’t available but it’sestimate they account &or less than20BH o& the time spent on mobile

evices!

Gonetheless' it’s clear consumers aregravitating towars apps versus theweb an marketers nee tounerstan how they +t into amarketing strategy! The esign o&

apps is likely a key &actor in theirpopularity e!g! the cleaner navigation'more streamline layouts' anopportunities to personali*e thecontent! .n' as consumers arebombare with igital content &rommultiple sources' the most user&rienly an ecient customer

e#periences will win out!

/tats> 1!< com/core !13 2!< com/core !13 !< ?ompuware !1 3!< /tatista1!15 5!< Flurry 3!13


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T0eC$ns&*erPerspe1tve


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4es&re Is A Ke% Drver O2 App Usa#e T$da%

7ames' messaging' an social interaction

occupy most o& the time spent in apps1!

"hat’s more' consumers ten to concentrate

32B o& their time using one single app6accoring to com/core' nearly three out o&

every &our minutes o& app usage occurs on one

o& an iniviual’s top 3 apps2! Facebook takesthe lea an other prominent social' search'

an entertainment properties roun out the top15 most popular apps in the A/!

/tats> 1!< Flurry 3!13 2!< com/core !13 !< com/core 10!13


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Apps D$*nateO&r Cas&a! 4ves=

B&t M$re AndM$re Ut!taranUsa#e Is >r$/n#

The leisure &ocus o& appsmakes them an appealing

meium &or avertisers6

engagement is high in terms

o& attention an time spentwith content!

Cet purpose%riven activitiesare on the rise! ?ertain

verticals are seeingincrease eman an

enthusiasm &or app

e#periences6most notablyretail! .ccoring to the 2015

Internet etailer )obile 500eport' 32B o& mobile

commerce &or globalretailers now comes &rom

mobile applications!1

Ver% !tt!e $2 1&rrent app &se sp&rp$se?drven= "&t t0at6s a

#$$d t0n# 2$r "rands 2r$* anadvertsn# perspe1tve(

/tats> 1!< Internet etailer 1!15

,,


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Creatn# ABranded App Is

A M&10 B##erC0a!!en#e T0an

In?appAdvertsn#

,'

.ccoring to ?ompuware'most people &eel that onmobile evices' apps are more

ecient than websites!8owever' the bar is set very

high &or apps when it comes tocustomer e#perience6KB o&users will try an app a secon

time i& the initial e#perienceoes not impress@ only 1HB

will give it a thir try1!

For marketers' it’s a riskyproposition6even the best%

planne meia campaignwon’t earn an app a spot on a

consumer’s mobile esktop i&the app itsel& oesn’t oer

valuable content an asuperlative e#perience!

F$r a!! t0at 1$ns&*ers !$veapps= t0e% d$n6t 2ee! a need t$

0ave !$t $2 t0e* The competition &or space on smartphone esktops is+erce6the typical A/ consumer has roughly 2 appsinstalle2 ;the average global consumer has only2H


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W0atBrandsNeed t$

Kn$/


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Apps @#&re pr$*nent!% nt$ 1$ns&*ers6 da!% !ves s$ "rands need t$ &nderstandt0e /a%s n /010 t0e% 1an and s0$&!d "e present( T0ree e% 1ate#$res $2 $pp$rt&nt%

est:

Ke% App Opp$rt&ntes F$r Brands

BRANDED APPS IN?APPADVERTISIN>

PROIMITY

.pps ten to &are betteras ?) tools as only acommitte customer islikely to use one! It’simportant to keep this in

min since apps are apricy unertaking an thecost o& promoting one isgenerally 2%L the cost o&evelopment! 8owever' awell e#ecute app can bea power&ul tool toestablish a close 1>1

connection with aconsumer!

In%app is the &astest%growing sector o& mobileavertising' e#pecte toreach E1K4 by 2011 anwith goo reason' given the

time consumers spenusing them an the volumeo& apps available! In%appas yiel consistently highengagement an also oermarketers that can’t Dusti&ybuiling a brane app theopportunity to create app%

like e#periences within aunits!

4rane apps have theability to irectly tap in totechnology like 4luetoothan GF? to a an elemento& igital interactivity to%real

worl e#periences like in%store an out o& home!8owever' brans that haveno app can still leveragethese technologies bypartnering with r partyapps to achieve a similareect' elivering hyper%local

messaging' pushnoti+cations' an as!

,-

/tats> 1!< 7artner 1!13


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C$ns&*ers Ma% 4$veApps= B&t N$t Ever%Brand S0$&!d B&!dOne

The value o& having a logo on the mobilehome screen is incalculable but it’schallenging to achieve! 7etting aconsumer to proactively seek out anownloa an app takes &ar more eortan investment than irecting trac to awebsite!

It’s also more challenging to compelconsumers to keep an use an app! Theestimate meia cost &or a loyal i9/ useraverages E2!251' but there’s noguarantee a signi+cant number o& userscan be achieve! 0B o& brane appshave less than 10M 2 ownloas an the

maDority o& apps are elete a&ter one ortwo uses!

"ith this in min' marketers nee to aska &ew key (uestions be&ore seriouslyconsiering an app>

D$es *% "rand 0ave content

anNor utility that will be use&ul anengaging in app &orm

CONSUMERS 4OOK ATTHEIR SMARTPHONES OVER

,)+ TIMES PER DAY 5

,)

/tats> 1!< Fiksu 10!13 2!< 7artner 1!1 !< Mleiner ,erkins ?aul+el an 4yers5!1


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A F$r*&!a F$r S&11ess Wt0 Branded M$"!e Apps

The mobile home screen is arguably the most covete real estate in the worl' but branscan only earn their way there with great content an smart marketing! 4rans that have avalue proposition6i!e!' content an utility that will be relevant' an engaging in app &orm6

must unerstan the *$"!e app !2e1%1!e in orer to succee!

The +rst' most important step is to re+ne an valiate the concept &or an app through ata%riven ieation an testing with beta users that match the target auience!

,ost%launch' a care&ully curate combination o& pai' owne an earne meia anapplication o& user &eeback in a process o& iterative re+nement will give brans the bestchance at creating a st1% app that earns a place on mobile home screens!

I D E A T

I O N

C O N C E P T

V A 4 I D A T I O N

B E T A T E

S T I N >

D E V E 4 O P M E N T

P O S T ? 4 A

U N C H

M A R K E

T I N >

Pad: search' isplay' an rich meiaesigne to rive awareness O ownloas

Earned: "or o& mouth' in$uencer

outreach' an social eorts esigne toboost awareness an avocacy

O/ned: .pp%store optimi*ation' promotionalcontent istribute via owne spaces to riveongoing engagement an avocacy

THE MOBI4E APP 4IFECYC4E

SOCIA4 4ISTENIN>;e!g!' app store comments' irect &eeback' social

spaces' etc!


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M$"!e AppsVs(

M$"!e We"

,

"e’re o&ten aske i& apps willsupplant the mobile web or i&8T)=5 will kill mobile apps'

but in our ,9P' it’s not aneitherNor proposition!

.pps are a user e#perienceparaigm6the coe behinthem is o& seconaryimportance to brans ;an o&

little or no importance toconsumers

be possible to create a website ientical to a native app'

but it’s the site that will mimicthe application in &orm an

&unction!

,oint being' the app moel o&content elivery6

streamline' conte#tual anpersonali*e6is here to stay!

.ccoring to Flurry' we only spen 13B o& ourmobile time in browsers1 but it’s important to notethat much discovery of new content happens via

search in the browser ! 8ence' while a consumer willo&ten opt &or an app a&ter becoming a loyal user'mobile optimi*e web content is still a necessity &orevery bran! 8owever' it’s interesting to note thatmany brans are starting to apply app%centricesign principles to mobile sites!

YOUTUBE MOBI4EWEBSITE

YOUTUBEMOBI4E APP


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Ne/ App Cate#$res W!! Spar M$re Ser$&sUsa#e

CONNECTEDHOME

CONNECTEDCAR

CONNECTEDTV

UP UNTI4 NOW= APPS HAVE BEEN 4AR>E4Y ABOUT FUN AND >AMES= BUT NEW CONNECTEDINTERFACES PROMISE

TO POSITION THEM AS FUNDAMENTA4 TOO4S FOR MANA>IN> OUR HOME= WORK= ANDPERSONA4 4IVES(

?onnecte home

systems anappliances arepoise to repositionapps asinispensable tools&or prouctivity anli&e management!

It remains to be

seen where branswill +t in' butpossibilities incluesponsore contentan oers elivereto these apps on anopt%in basis!

"ith the

introuction o& sel&%riving cars' it’s agiven thatconsumers will lookto consume igitalcontent in theirhans%&ree rivingtime!

In reality' sel&%riving cars are stilla long way o' butthe connecte carwill usher in newopportunities toreach consumerswith hyper localtargeting an will

place a newemphasis on auio

?onnecte TP apps

have potential torevitali*e traitionalbroacast meia byoering viewers theconvenience anutility o& apps with abigger visual palette!

9pportunities

aboun' &romcontent synche to

TP programming tohighly personali*e'one%to%onemessaging both onthe screen anwithin companionapps on mobile

evices!

WEARAB4ES

"earables present

the most immeiateopportunities &orbrans! Though still anascent market'awareness is highan proDections &oraoption optimistic!

Though initial as &orthe .pple "atch were

ebute at ?:/ 2015'it’s more likely thatwearables will beuse primarily totrigger as on largerscreens such as TPan igital out o&home!


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'+,) AppTrends


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.ll meia evolves anapps are no e#ception!

In 2015 consumerreliance on apps willcontinue to grow an

e#pan into more&unamental' purpose%

riven uses courtesy o&wearables an the

connecte car anhome! In the process'

two key trens willemerge in overall

igital esign an

marketing!

; Ke% AppTrends F$r'+,)

',

T0e #r$/n#n&en1e $2 app?

1entr1 des#n.s apps occupy more anmore o& consumers’ mobilean overall igital time' app%centric esign principles willbegin to e#ert consierablein$uence over !com esignacross all evices! Thegrowing popularity o& 8T)=5

will &urther contribute to thistren by making it possible&or web applications toreplicate the &unctionality o&native ones!In1reased de*and2$r app?spe1@1pad= earned= and$/ned strate#%.s more apps are proucean more app stores launch'the competition &or loyalusers will become +erce! ,aimeia in the &orm o& appinstall as will see signi+cantinvestment' but there will alsobe a new emphasis on Owned an Earned elements such as

promotional content' web /:9an app store search


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The introuction o&

4luetooth =ow :nergyan GF? into i9/ will

encourage brans to

invest in pro#imity

marketing' esigne toreach consumers at

pivotal ecision%makingpoints in the customer

Dourney!

Those that have

eploye success&ul apps

o& their own will enDoy an

ege with pro#imity

marketing but

opportunities will be opento all brans through

meia an partnerships!


''

Apps aspr$*t%

tr##ers4eacons re(uire an app toactivate igital e#periences inthe real worl' leaing morebrans' particularly thosewith a brick an mortarpresence' to consiercreating a native applicationo& their own!

The eman &or pro#imitymarketing will also createnew lines o& revenue &orsuccess&ul apps by enablingthem to charge r partybrans to +lter beacone#periences through them!Apps as

pa%*ent1$nd&ts?onsumer enthusiasm &ormobile payments is promising6over 1 million users signeup &or .pple ,ay within the+rst K2 hours1! For brans'this &ast aoption o& mobilepayments will increase thepressure to create mobileapps through which users can(uickly' easily' an securely

/tats> 1!< .pple 10!13


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.s this meiumcontinues to evolve in

2015' we’re alreayseeing signi+cantchanges in the way

their value isperceive an in the

way they +t in to abran’s overall

marketingin&rastructure!


'5

A *$ve a/a%2r$* pre*&*

*$"!e apps"hen apps +rst went main%stream in 200' there was astrong tren towars putting aprice tag on app ownloas!Gow however' it is commonknowlege that rivingownloas is competitive ane#pensive an the tren &or bothbrane an mainstream apps isswinging in the oppositeirection! In 2015' we’ll see anincrease in &reemium app moel6&ree to ownloa anaugmente by premium in%apppurchases!M$re 1r$ss?p!at2$r*nte#rat$n "et/een"rand /e" stes andapps.pps have traitionally beenperceive as a sort o& bran satellite6a lesser e#tension o& the moreimportant !com presence! 8owever'as apps ominate more an more o&our igital time' we’re seeing moreemphasis on integration with allother elements o& marketing! In2015' we’ll start to see morecontinuity between content an&unctionality on brane websites

an apps' particularly in regar tomanagement o& personalin&ormation an accounts!


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Ke% Taea/a%s

APPS AS A DESI>N PARADI>M?onsumers love the more streamline look an &eel o& mobile applications6thetechnology use to create apps oesn’t really matter to them! /oon we’ll be ableto create app e#periences in the browser that are ientical to those achieve withnative coe an it won’t matter to brans or consumers which is which! Apps area design paradigm an provie observant brans with signals on how consumere#pectations o& content are changing!

APPS AS A BRAND ETENSION-eveloping a native ;aka ownloaable< app isn’t the answer &or every brangiven the current patterns o& user behavior@ only brans with a clear valueproposition an the resources to promote it shoul attempt to o so! . +rmunerstaning o& the mobile app li&ecycle' &rom initial ieation an conceptvaliation all the way through to post launch ,ai' 9wne' an :arne promotion'is essential to success!

APPS AS A MEDIA OPPORTUNITY AND CONNECTIONSMEDIUM)obile applications present brans with appealing meia opportunities onmultiple levels' not the least o& which is the ability to present richer' moreengaging as to a growing an highly engage auience! .vertising within themore popular apps that currently comman the bulk o& consumer attention ;e!g!gaming' messaging' social< also enables brans to create an app%like e#perience

without the cost an risk o& eveloping one! )ost compelling o& all' in%appavertising oers the opportunity to leverage the increasingly popular pro#imity

23


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')

Interested In Creatn# Y$&r O/n App7

7reat brane apps reuce &riction in a &renetic worl' proviing eucation'in&ormation O entertainment! The average consumer rarely swipes past the+rst two screens an to be relevant' that’s where your app has to be! .pps that

provie content an utilities that make li&e’s little tasks easier give brans achance to earn a spot on the home screen!

MARRIOTT6SMOBI4E

BOOKIN> APP

ATGT6SCUSTOMER

SERVICE APP

NETF4I6SMOBI4E

STREAMIN>VIDEO APP

TIFFANY6SBRANDEDMOBI4E

APP4ICATION


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THE FUTURE OFAPPS

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fast take on - the future of apps

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