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.

To establish whether participants’ attitudes toward brands changed after they used the apps, the researchers had participants complete an online survey about 10 days before the experiment. In addition to answering questions about whether they owned and used a smartphone, they indicated how often they used products in the categories represented by the eight brands. Finally, the researchers used an 11-point scale to measure the participants’ attitudes and purchase intentions toward two brands from each of the eight product categories: the test brand and a competitor’s brand.

During the experiment, participants were presented with the eight apps in random order. They were required to interact with each app, and could do so for however long they wished. Over the course of the session, the researchers tracked the participants’ heart rate. Previous research has shown that when people are focused externally (playing a board game, for instance), their heart rate slows down, whereas when they are engaged in something that requires greater introspection (trying to answer a question, say, or research an issue), the rate increases. The researchers wanted to see if this difference would extend to app usage.

After interacting with the last of the eight apps, the participants took a survey that again measured their degree of engagement with the eight product categories, along with their attitude and purchase intentions toward the brands.

The researchers found that in general, the phone apps made the participants think more favorably not only of the brands, but also of the overall product categories they represented. This latter finding was unexpected and potentially significant: Apps could be a way for advertisers to reach across traditional product or gender boundaries to appeal to new types of customers.

There was, however, only a small shift in participants’ intentions to actually buy a product from the app’s sponsor. And not all branded apps had the same effectiveness. Applications that employed an informational style were more successful at making people want to buy one of the brand’s products. Additionally, although there was no significant difference in the heart rates of women when they used the two types of apps, male participants had much faster heart rates when using informational apps, suggesting they were “focusing attention internally and thereby encouraging the generation of personal connections with the brand.”

The authors conclude that because many people view their smartphones as extensions of themselves, packed with personal data and customized interfaces, branded apps could be a highly effective form of advertising. Smartphones follow consumers wherever they go, and branded apps are all the more powerful because it is the consumer who decides whether to download and opt in. Unlike pushy messages, such as those delivered by television commercials or text messages, apps can subtly improve consumers’ attitudes in a format they want to see and use.

But the researchers caution that the study also implies that successful apps are hard to produce. “Designing an informational app that consumers find useful in their daily lives is a lot more difficult than building an experiential app by creating or adapting an interactive game,” they write. It requires a larger budget of time and money. But if the end result is something useful to consumers, apps could be “one of the most powerful forms of advertising yet developed.”

Bottom Line:
Using branded mobile phone applications increases consumers’ positive attitudes toward a brand. In addition, apps can boost people’s impressions of an entire product category, making them a potentially useful way of reaching new consumers. Informational apps, which help people solve problems or gather data, are the most likely to improve a brand’s bond with consumers because of the personal connection that is forged.