study by US firm Chitika reinforced the strength the iPhone has within the mobile browsing market, showing that 66% of mobile internet browsing hits were attributed to Apple's little wonder. Before jumping on a purely Apple-centric mobile advertising bandwagon however, the study also found that advertising click through rates for mobile users were almost half (.48%) what they were for non-mobile. In addition, of mobile devices, the iPhone displayed the lowest CTR at .30%, compared to Android phones at .45% and an other category (including Blackberry/Symbian/HTC) which had the highest rate at slightly above .9%. Though other platforms are showing a better performance overall, the iPhone's juxtaposition of huge usage and small CTR poses a problem that understood, could pay off in dividends.
Apple's App Store represents a tightly controlled channel for marketing and brand communication
While CTRs for iPhone mobile browsing aren't delivering in levels congruent to usage share, other communication channels that exist within the device, both traditional and non-traditional, represent possible opportunities for improvement. Traditionally, Apple's device is secured on multiple levels. On a software level, copy protection limits software installation to the App store, a heavily regulated market place for applications which have been previously vetted by Apple. This vetting creates a user experience where a baseline standard of safety, content and usability is guaranteed by the company, encouraging a consistent consumer experience. Applications exist as both free (trial or lite software as well as freeware) and paid apps, which has, in turn, spawned two types of advertising opportunities: sponsored applications and in-app advertising.
The application doubles as a Taser for public bathrooms in Shoreditch after 11pm.
Sponsored or branded applications, such as "BMW Z4 - An Expression of Joy", "Volvo Ocean Race", "SitorSquat Loo-finder sponsored by Charmin" and "Showtime's Dexter-based mobile game" are all examples of applications functioning largely as one engaging advertisement. In addition, applications like Chipolte Grill and Pizza Hut function as ordering platforms, creating not only a permanent advertising presence on a user's device, but also creating a functional channel to purchase. If iPhone/iPod Touch users have shown that being presented with advertisements isn't enough to drive interaction or click-through, then sponsored applications may represent the greater investment that can encourage such behavior.While developing or sponsoring an app may represent a greater cost than just more traditional advertising, research has shown that an app in the Top 10 of the most downloaded free apps list can generate upwards of 20,000 downloads a day, proving the possibility for a healthy reach.
In App advertising on Twitterfon (now Echofon) - Google is really taking the fight to Apple in some odd placesIn addition to sponsorship, advertising opportunities exist within application. Such advertising can result from sponsorship or as support for offering the application for free or reduced pricing. Lite or trial versions of some of my favorite applications (Twitterfon (now Echofon) being one) defray costs through advertisements placed either on screen or as interstitials. However, based on the presented CTRs, are in-app advertisements strong enough to elicit consumer behavior, or is something more needed? Proper targeting of specific application users may lead to serving ads found interesting by the segment, leading to generating a greater interest in the presented advertising content. Alternatively, mobile advertising ad networks like Medialets have begun to improve upon serving up traditional display advertising by using the capabilities of the iPod/iPhone. Gap's shakable ad (shown below), inserted in games such as iBowl lite, represents an intriguing and rather simple way to make mobile advertising more noticeable and hopefully entertaining.
While Apple's gatekeeper type control over access to users ensures a regulated consumer experience, it may limit app development and subsequently consumer communications opportunities. Applications that violate Apple's App Store Developer TOS (which includes limits on content, development directions and coding such as execution state for resources) face a ban from the market place and subsequently lack the ability to reach users. Applications that feature adult content or attempt to circumvent certain iPhone/iPod funcationality are barred from the market place and as such, advertisements of a related or unnacceptable nature are also resetricted. While most sponsored or in-app advertising willl never run afoul of company regulations, brands hoping to push adult oriented products (i.e. alcohol, tobacco, gambling, firearms? No Big Game hunter sponsored by Glock or Super Tennant's Booze & Fight anytime soon) or add a level of interactivity that conflicts with the TOS will find themselves limited by traditional iPhone usage.
In such a situation, users circumventing Apple's content protection may represent a valuable segment for developers and advertisers. Using software such as Redsn0w through a process called jailbreaking (something I won't explain here, but is innordinately easy to find a guide to), users can circumvent Apple's control over their device to allow 3rd party application installation and GUI customization in addtion to other features. App store replacements such as Cydia or ICY allow a marketplace for applications outside of Apple's control. In addition, applications can be manually downloaded and installed to the iPhone/iPod through slightly more difficult methods. Both of these allow for applications that have been rejected from the App store (the Google Voice leak for example) or wouldn't have even been considered (NES, SNES emulators) to fully function on the device.
In previous device generations, device customization was the realm of the hardcore user, with examples ranging from those that loaded Wolfenstein 3-D on a TI-83 to adding some basic semblance of functionality to Nokia's internet tablets (I speak for experience on that one). While customizing a device such as the iPhone is still not fully in the realm of the normal user, I'd argue that with the ease of the process, jailbreaking the device has become much more common place.Figures from mobile analytics firm Pinch media (via Just another iphone blog) show that in the end of July '09, 8.43% of all iPhones/iPod touches were jailbroken, a increasing figure from 8% a few months prior.
While jailbroken phones still lie well in the minority of the iPod using populace, the status of this segment represents one of the first times when such a process has become so ubiquitous within a conversation about a device. If a brand or advertiser were to release a sponsored app or advertisement in application through these 3rd party channels, they can be guaranteed to reach a meaningful minority of the iPhone user base that possesses atleast the technological skill or interest to modify their device. For brands such as tech oriented publications or electronic device and software makers, this segment represents users that are motivated towards action and may constitute early adopters or opinion leaders in highly technical circles. Advertising through this "shadow" channel may allow for an effective segmentation that can counter the low CTR or interest of the overall iPhone user base.
The jailbreaking of iPhones however, doesn't represent a complete positive for developers and advertisers. Removal of copy protection also facilitates the ability to pirate software, eliminating the ability to sponsor trial versions through advertising. It also may allow for the advent of malicious software on the device, changing user behaviors towards advertising and comms innovations in a way that limits possibilities.
On the whole, the future for iPhone based advertising is that of varied possibilities contingent on device innovation and the evolution of user behavior and developer/company positions. Innovations such as ARG apps and increased connectivity will drive comms possibilities, but a combination of traditional (app store and approved channels) and non-traditional (segmentation through shadow channels) applications may prove most efficient.