Appvertising? What's That?

By Jesse Lapin, Software Developer

I’m new to Marketing; my background is in IT but as an avid smart phone user I’ve witnessed firsthand the growth of “appvertising” (advertising through smart phone applications, or “apps”). According to the research firm Gartner, mobile advertising is expected to grow from $913 million in 2009 to $13.3 billion in 2013, that’s 1457% in just four years.

There are two major players in the app market. Apple has the iPhone, which was the pioneer in the creation of apps. The iPhone Operating System runs on the iPhone and a modified version will run the upcoming iPad. Google has been gaining ground quickly with their Android Operating System. Android runs on many different phones, such as the Nexus One, the Motorola Droid, and the HTC Dream to name a few. Aside from the app leaders right now, there are more looking to grab market share. Microsoft will be launching the much anticipated Windows 7 Phone this year, and Nokia, which accounts for nearly 40% of the smart phone market according to GigaOM, has recently opened its own app store. The issue with all these companies having their own operating systems is that an app will only run on the operating system it was designed for, i.e. iPhone apps can’t run on a phone that uses Android.

The number of smart phone users is growing rapidly. As of December 2009, Apple has sold over 42 million iPhones. Almost seven million phones were sold that run Android in 2009, and Google reports that they are shipping 60,000 more every day, a statistic that if it holds steady, would be 21.9 million per year. The number of applications is also climbing rapidly. According to Google, as of March 10th there were over 30,000 apps available for Android, and Apple boasts over 150,000. iPhone users alone have downloaded over 3 billion apps. That’s an average of more than 70 apps per phone.

Appvertising takes on many forms. Some create applications that make a product more accessible, such as mobile banking. There are apps that are free but only if you are willing to click through a full screen ad every so often. Other apps feature banner ads at all times. Some games have subtle advertising, such as sports apps that have in game ads in places like the wall of a racetrack, or the scoreboard of a football stadium. There are web apps, which are nothing more than a website designed specifically to be smart phone friendly. Some companies have created games that feature their products, such as a racing game that only features one manufacturer’s car.

The key to creating applications is content. No matter how good your product is, or how well your ads are created you still have to come up with an idea people will want to download. With the exorbitant number of apps available you have to make sure yours stands out. According to Pinch Media, 80% of applications are never opened again after the first day they were downloaded, that number jumps to 95% after a month and 99% after three months. So when deciding on content, reusability is a very important factor.

There is no question this is an exciting time for appvertising. The smart phone market is expanding and evolving at an incredible rate and it looks like it isn’t slowing down any time soon. Coming up with an application that fits your product and captures a user’s attention is no easy task but as the smart phone market continues to grow it will become a more and more valuable investment.