Utility or futility: navigating the app economy

“Whether advertising an app or a jar of pickle, you still have the same problem: you have to create demand.”

So says Rick Hirst, CEO of creative agency mcgarrybowen, when asked how brands should approach the growing app economy.

“We have clients like Sky Bet, which runs 80% of its business through mobile,” he explains. “It has fundamentally changed how they develop a product and where they push investment.”

It’s a big deal: the best apps are redefining consumer expectation. With the likes of Uber, Periscope, Airbnb and Trainline driving innovation and standards, it is pushing consumers closer towards mobile and offering them striking levels of utility and power. It is little wonder brands want to capitalise.

Yet so many apps still end up binned. In fact, various figures suggest up to a third of apps are downloaded, used once then deleted. This is turning into a growing issue for marketers given mobile commerce users are predicted to number 33 million in the UK by the end of Q1 2016.

Rick Hirst, CEO, mcgarrybowen

As Hirst explained during a Mediatel debate, hosted with partners Google and Fetch: “it’s either utility or futility” – and brands walk a dangerous tightrope between both.

For Santander’s chief marketing officer, Keith Moor, it’s been a steep learning curve – and Moor admits the bank did not adopt thinking about mobile as an important part of its business quickly enough.
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“A few years ago, however, we decided to look at it closely and what we learned was that it’s all about understanding what the customer wants,” he explains.

“You look at consumer behaviour and attitudes and you adapt your business model to suit.”

For Moor that inevitably leads to mobile in the first instance – but essentially directs marketing to “omni-channel” strategies to reap the full rewards.

Banks are a good case study in this area: most started life on the high street – where traditional face-to-face customer service was key to business – but have been forced to digitise the customer experience in order to survive.

“About 15 years ago we were panicking about the death of the high street,” Moor says. “Everybody was going to be doing online banking – so that’s what we launched. And you know what? The death of the high street never materialised. In fact, we found that the key was integrating the experiences.”

Less omni-channel, Moor says, and more ‘opti-channel’ – giving consumers the option to choose what is best for them depending on the circumstance: face-to-face in the bank, via desktop, on the phone (Santander still gets 100,000 calls per day), and through the mobile app (and even that will encompass it’s own version of ‘Facetime’ soon).

“We get a higher proportion of cross-sell from omni-channel experiences, particularly including mobile, rather than through a single channel,” Moor says. “The same applies for customer satisfaction.”

Keith Moor, chief marketing officer, Santander

Santander, which purchased high street building societies Abbey National, Alliance & Leicester and Bradford & Bingley after launching in the UK in 2010, is currently ranked number one for customer satisfaction in online banking in the UK, and number two for mobile banking – so Moor’s strategy is clearly working.

However, it’s not an open and shut case, and brands need to be careful when planning mobile app strategies, says Dan Hagen, chief strategy officer at Carat.

“Consumer audiences have more control than they ever had previously,” he says. “They are connected all of the time and there are now very few barriers between a customer accepting or rejecting a brand – and that’s got to be your starting point.”

This then leads to the much more pragmatic question: “How does all this stitch together? How does a mobile strategy work with an AV strategy?”

So the next step for marketers is to shift their thinking and develop smart strategies – but they should also experiment.

Julian Smith, head of strategy & innovation at mobile agency Fetch, says that mobile is the primary media channel for an ever greater portion of the consumer population and no longer “just the premise for ‘Gen Z’s’.”

“Marketers wishing to win the hearts and minds of the mobile consumers can learn from what mobile-first app brands are already doing to reach and re-engage their customers,” he says.

“2016 will see smart brands increasing their investment and attention on mobile but also their levels of innovation and experimentation. From mobile video to push notifications, they’ll also need to adapt existing business processes and people to design mobile-first marketing communications.”

For marketers that are interested, Fetch have now highlighted six trends that its strategy team have recognised – available for free download here.

Interview: Google’s agency head talks mobile app marketing