Mobile Ads: A Good Investment?

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Harvard Business Review report: mobile apps, not mobile ads, are “the best way to win the hearts and minds of mobile consumers.”

Mobile ads – those tiny banner ads that pop up on the bottom of apps and web browsers – don’t work, says a recent Harvard Business Review article. The author of the article, Sunil Gupta (head of marketing unit, Harvard Business School), reports that four out of five consumers not only dislike mobile ads, they consider them “unacceptable.” To “win the hearts and minds of mobile consumers” you need an app.

Apps trump ads for many reasons, says Gupta. Consumers value apps for their genuine usefulness. Moreover, they don’t find apps intrusive like ads; over 82% of consumer time is spent in apps. And apps make sense from a business perspective, too. Apps enable you to engage in two-way conversations with your customers, learn about their preferences, and open up new revenue streams.

The main challenge for marketers is to build an app that customers will actually use. The HBR article reports that consumers only use about 15 apps regularly, spending 42% of their time on game and entertainment apps, and another 32% on social networks like Facebook. The remainder of consumer time is spent on utility apps (cameras, email, maps, etc.) and discovery apps (Yelp, Kayak, etc.).

HBR recommends that you “create apps that add value to consumers’ lives and enhance long-term engagement with their brands.” As a manufacturer or retailer, you may be scratching your head asking “how can I possibly create a useful app?” This is one of many reasons why connected products can be so valuable to you. Connected products provide you the opportunity to build a truly useful app that customers will interact with daily.

Take our customer Hunter Fan. Hunter Fan recently released a connected thermostat that you can control with a smartphone app. When you’re driving home from work, you can open up the Hunter Fan app to turn on your heater so that you’re home is comfortably warm when you get back. When you’re traveling, you can use your app to make sure your heating and cooling system is off, saving you money.

So, what sounds like a better investment: a pinky-sized banner ad that can barely fit five words, or an app that remotely controls physical products, increases convenience, and saves you money?

Shane Dyer, President of Arrayent