The Cheese is Gone in the App Marketplace

mobile-phone-with-app-burstCustomers love apps. Brands make apps. Match made in marketing heaven, right?

Not so fast, according to Steve Newcomb in Advertising Age. He cautions that brand apps can be great, but for many, many brands they just aren’t worth the cost to develop and deploy.

“App-install ads are a major success story in marketing these days. Facebook claims it will be responsible for 4 billion app downloads by 2017, representing up to 20% of its ad revenue,” Newcomb writes. “Google recently claimed its app-install ads prompted 2 billion downloads. And now Snapchat and Apple are getting into the app-install advertising game.”

These numbers, Newcomb explains, make app-install ads among the most effective mobile tactics ever. But he cautions that it’s far from a winning strategy for most brands, riffing off the “Who Moved My Cheese?” dilemma of late last century.

The mobile customer, in this case, is the cheese. And it’s gone missing for the vast majority of brand apps out there.

“Mobile users spend 84% of their time in just five apps; and 84% of consumers that download an app will delete it after only one use.”

“Think about how many household brands whose apps you’d never download. It’s not a small list, or even a big list. It’s practically all of them,” he notes. “No matter how much cheese brands initially found in the app dreams, it is an inescapable fact that smartphone users spend 84% of their time in just five apps, that 80% of apps never make it to 1,000 downloads, that 84% of consumers that download an app will delete it after only one use, and that when brands run ad campaigns to download their apps, they experience up to 95% abandonment.”

In other words, all that money your brand is pouring into developing an app is likely to never, ever pay off. Of course, there are exceptions to the rule, as Newcomb notes, like Starbucks or the Audi Driving Challenge Game. Still, he cautions:  “For most brands, the cheese is gone. And it’s not entirely clear where brands are going to find it next.

The challenge is that Facebook, Twitter, Instagram, Google and Snapchat “dominate the mobile marketplace,” according to Newcomb, and their app marketing vehicles are platform specific, where, “just like all walled gardens, the data and analytics are trapped inside these platforms.”

“Furthermore, they require developers to rebuild native apps from the ground up, putting brands through the tremendous hassle of re-doing their apps, even as they remove the user’s hassle of downloading from the app store,” he continues.

What’s the solution? And where is the cheese? It’s an ongoing question for brands and customers.

“What the marketplace needs is a solution that marries the best of the web with the best of native apps: elegance, transparency, speed and seamlessness. That’s the cheese, and we’re all still looking for it.”