We know mobile advertising is effective. The question is: how effective? Recent studies suggest pretty solid results for both direct response and branding metrics, better, in fact than some online ads.

The lead article in yesterday’s eMarketer newsletter, for example, reported low ad recall but high response rates for location-based service ads, based on results of a recent Luth/Mobile Marketing Association study. On the other hand, the same survey indicated fairly high recall rates (and correspondingly lower response rates) for display ads seen while browsing or using applications, particularly among mobile users ages 18 to 34.

The 11th installment of InsightExpress’ Digital Consumer Portrait likewise indicates impressive branding and direct response metrics for mobile ad campaigns. In a podcast interview with MobileBeyond, Joy Cicman Liuzzo, InsightExpress’ senior director of marketing & mobile research, noted that banner ads on mobile websites generate the highest click-through rates and the lowest annoyance factor, although among “mobile intensives,” 68% of whom have smartphones, app banners (appearing in both the top and bottom of the application) also generated favorable results.

In an earlier interview with Mobile Marketer, Ms. Liuzzo discussed how, in some cases, particularly where brand favorability and purchase intent are concerned, mobile ads can be five-to-six times more effective than online ads. Overall, mobile display ads outperformed SMS and mobile video in every category other than aided awareness and brand favorability.

These findings add weight to the interviews eMarketer conducted last fall with executives from Razorfish, JumpTap and Admob, who indicated that response rates to their display campaigns were as much as 10 times as high as those on the desktop Web. Patrick Moorehead (then with Razorfish but now VP and director of mobile platforms at Draftfcb) told eMarketer he had seen click-through rates for sponsored SMS campaigns go as high as 10%. Note that full versions of these interviews are available to eMarketer Total Access clients only.

One of the main points of last fall’s “Mobile Marketing and Advertising: Change Is in the Air” report was that the lack of on-screen clutter (relative to the desktop) and the ability to reach people at their point of interest contribute to mobile ad effectiveness. Higher response rates and better branding metrics, in turn, help make the medium more appealing to advertisers. As indicated by studies cited here, these trends—along with the ongoing mobile app frenzy—continue to drive the market forward.

Apple’s TV ads for iPhone apps declare: “We have an app for that”. Seems like Apple has an app in its App Store for just about everything–stain removal tips, color sampling, meal planning, coffee runs and a slew of time-wasting novelties.

The growth in mobile apps is being fueled, in part, by consumer marketers that are throwing their hats into the app development ring. My new report, “Mobile Apps and Consumer Products Brands”, which is available on eMarketer Total Access, cautions marketers to think about where in the mobile, digital marketing and media plan an app fits before they get too excited.

“The question isn’t ‘Why would P&G or Kraft or Clorox want an app?’” John Hadl, founder and CEO of BrandinHand, told eMarketer. “You start with the premise of ‘I don’t know if I want an app. I know that I want to help and touch and improve consumers’ lives and make products to do that.’ You start there, then ask whether mobile can play a role. And of all the things one can do in mobile, is a mobile app the best way of doing it?”

Your customers are a good place to start. Then, after analyzing how your brand’s customers might be helped by an app, marketers should come up with a strategy where the app fills a unique and compelling need. It should make a consumer’s life easier and more fun, or offer a useful benefit—or it might successfully combine both of these objectives.

We’ve published several interviews and case studies on consumer brands and mobile apps in the past few weeks. Here’s a rundown:

• Jeremy Lockhorn, Razorfish: Why Consumer Brands Should Be Thinking About Mobile Apps.
• Jami Lawrence, Publicis Modem: Mobile Marketing & App Strategies for Food Brands.
• Chris Epple, PepsiCo: Propelling the Pepsi Spirit with Mobile Apps.
• Ed Kaczmarek, Kraft: Kraft’s Mobile Branding Recipe.
• Amanda Mahan, Clorox: Clorox App Gives Consumers Content They Want.

A lot of brands are struggling to figure out what they want out of apps. Sure, they want to collect more consumer data, insights into shopping habits and preferences, behaviors at home and elsewhere and links to their loyalty programs. But like any other digital or non-digital marketing program, they are looking for benchmarks and metrics by which they can evaluate an app’s “effectiveness” and engagement. It’s not enough for someone just to download an app, play around with it once and never use it again. There has to be some pattern of repeat usage and links to social media.

Here’s something noteworthy on that score: iPhone users downloaded the most apps in Q4 2009 with an average of 37 per user, according to The Nielsen Company’s App Playbook. No surprise there. But Android users had an average of 22 app downloads per user, showing that the Google platform is running hard and fast. The Playbook found that users of other mobile devices downloaded an average of 16 apps, Palm had 14, Microsoft Windows Mobile scored 13 and Blackberry came in last with 10.

But don’t you want to know how many times each of those users actually engaged with, i.e., used the app? I do.

We recently spoke with Jeremy Lockhorn, the director of emerging media and video innovation at Razorfish, about best practices for approaching mobile app development and the importance of thinking about apps as part of a larger mobile marketing ecosystem. Here’s a snippet from the full interview available on eMarketer Total Access. (Read more…)

As more consumers opt for smartphones, it’s becoming progressively harder for brand marketers to ignore the call for an app-based mobile experience, especially when comScore’s latest figures show that app usage now rivals, if not exceeds, browser-based Web access among iPhone and Android device owners.

It’s tough to turn your back on this kind of evident consumer demand. Fortunately, most marketers appear to be heeding the call: 65% of marketers and publishers responding to a December 2009 survey from DM2PRO and Quattro Wireless reported that they plan to invest in mobile apps this year.

Of course, where there is app-ortunity, there are also challenges. There is growing competition for mobile users’ attention, not only among app stores (which number more than 30 worldwide at this point) but also within each storefront.  According to recent analysis by Distimo, a Dutch app store analytics firm, there are nearly 200,000 apps in the six largest mobile device manufacturer/OS app stores alone.

What’s a marketer to do? In my latest column for iMediaConnection, I go into detail on some key steps marketers should take to make the most of the mobile
“app-opportunity.” Here’s a brief summary of the main points:

1) Ensure your app satisfies a consumer need, but does so in a way that also reinforces (and stays true to) your brand’s values. Ideally, strive to combine entertainment, social communication and utility into a single experience.

2) Promote your app like you would any other product using all available media, but pay especially close attention to social discovery. In other words, include apps in your brand’s social media strategy and include social media in your brand’s app strategy.

3) Keep your users engaged by keeping things fresh. Make an update schedule an integral part of your app strategy, much as it would be with any other product.

Getting consumers’ attention is increasingly challenging, but branded app experiences still have room to grow. According to Razorfish’s November 2009 “FEED: Digital Brand Experience Study,” only 24% US Internet users had downloaded a branded application. The right kinds of apps, backed by the right level of marketing support, can help drive those figures up.

Today, digital agency Razorfish released its annual Feed study of “connected consumers” — a group that includes broadband users who have spent at least $150 online in the past six months, have visited a community site and have also consumed or created some form of digital media.

One of the key points Razorfish makes is that the primary reason these connected consumers interact with brands in social environments is because they want to get deals. If that is true, it could have major repercussions for the way marketers should think about social media and what their goals should be.

According to the Feed study, 44% of respondents said the primary reason they followed a brand on Twitter because they thought they’d have access to special deals. Among Facebook and MySpace users, 37% said the main reason they friended a brand was for the deals.

But I believe that marketers should not take the results of this study as license to act as if social networks are merely promotional playgrounds. Promotions are designed to drive immediate action. Brands that use promotions or deals to increase their Facebook fan count or boost their Twitter follower count may experience short-term success but then risk losing the attention and loyalty of those fans and followers unless they keep pumping out the offers and deals.

As the Feed study points out, Dell Outlet deserves credit for its use of Twitter to promote sales and special discounts. And Starbucks used promotions (such as a free pastry giveaway) to build its Facebook fan base to nearly 5 million. But what kind of fans are they? Ones that will be loyal only as long as the discounts keep coming, or ones that really want to interact with the brand over the long term?