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Dialing for Dollars with Phone Apps

Branded mobile applications can spark interest in new product categories.

Title: The Effectiveness of Branded Mobile Phone Apps (Subscription or fee required.)

Authors: Steven Bellman (Murdoch University), Robert F. Potter (Indiana University), Shiree Treleaven-Hassard (Murdoch University), Jennifer A. Robinson (Murdoch University), and Duane Varan (Murdoch University)

Publisher: Journal of Interactive Marketing, vol. 25, no. 4

Date Published: November 2011

Some types of branded mobile applications (“apps”) are more successful than others at improving consumer perceptions — and some can even generate interest in brands whose products weren’t relevant to consumers before. That was the conclusion of this study on the impact of commercial apps, apparently the first of its kind.

Smartphones such as Apple’s iPhone and Google’s Android have revolutionized mobile communication, in large part because apps have effectively turned the devices into handheld computers. In the case of the iPhone, owners can choose from more than 100,000 apps to perform a range of functions, from checking e-mail and consulting maps to banking and shopping online.

But apps represent more than just convenience for users — they are a significant new opportunity for marketers. When consumers choose to download branded apps, which prominently display a brand’s identity through its name, logo, or icon, they are welcoming apps as “useful” parts of their day-to-day life. The intimate nature of interacting with an app requires a new understanding of advertising communication, however, because, as the authors write, “the consumer talks to the brand, not the other way around.”

Previous research has looked at the impact of text messaging and Web advertising on consumers, but the rapid evolution of smartphones and their potential for advertisers has not been widely explored. This study shows how big that potential is. “Apps seem like an ideal medium for educating people about new categories [of products], or categories they have yet to try,” the authors write, “so it would be useful to experiment with ways of encouraging customers to use apps for this purpose.” Indeed, they say, “The implication is that smartphone application development could be a better use of funds currently deployed on mobile-ready Web sites and other forms of advertising and promotion.”

More than 200 people took part in the study in the United States and Australia; they ranged in age from 18 to 74, and men and women were equally represented. Twenty-eight percent owned an iPhone, 68 percent owned a different type of cell phone, and 4 percent had no mobile phone. All participants received the same amount of training on using apps, to eliminate any novelty effect, and the experiment was conducted on an iPod Touch.

Eight branded apps were tested. Because previous research has found that a product’s relevance to the consumer has a large impact on a brand’s appeal, half of the brands in the study were in product categories that have been identified as predominantly targeting men, and half were selected to appeal more to women. The four female-targeted brands were Gap, Kraft, Lancôme, and Target; the four male-targeted brands were Best Buy, BMW, Gillette, and Weber. The apps were generally unfamiliar to the participants.

The authors hypothesized that the application’s type — either primarily functional and utilitarian or aimed at enjoyment and entertainment — would help determine how participants used it and were affected by it. Four of the apps in the study were labeled “informational.” For example, the Target app allowed shoppers to see the week’s deals and clearance items and to access product reviews by scanning bar codes. The other four were labeled “experiential” — BMW’s app, for instance, took the form of a game in which users could configure a 3-D model of the Z4 Roadster and take it for a virtual test drive.

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