What is ROI for a Mobile App?

I was on a panel on monetizing mobile  at CTIA last week and somebody asked the following question:

"How do I justify the ROI on my mobile spend?"

This is actually something we've come across quite a few times now.  Mobile application spends are currently much lower than they need to be.  At the same panel Christian Lindholm of Fjord complained that companies were routinely trying to get apps built on a shoestring when a comparable design project should have a budget of at least $250,000.  The reason for the difference was put starkly by the CEO of Newser last year when he remarked that they hadn't see the return that justified building a mobile app in the first place.

My response at the panel, and my response now, is that this is exactly the wrong way to be looking at mobile, and this is exactly the wrong time to be trying to work out these numbers.

My first point is simple: mobile apps are here, but they're new.  Asking what your ROI on your mobile app is going to be is rather like asking what the ROI would be on your website in 1998/99 - the fact it you don't know.  But if you don't have something, you've a hole in your marketing strategy.

My second point is more complex and really at the heart of this issue.  People aren't sure what mobile can be yet, but we are getting a really good idea about what it shouldn't be.

Mobile apps are not mobile web sites, and they're certainly not web sites circa 1999 when it was, even then, barely, acceptable to stick some brochure-ware up and call it a site.  In our brand app survey which we're working on at the moment, we're seeing some of the largest brands in the world, ones who have stunning TV, Print and Web campaigns building the most embarrassing apps possible.

The mobile device is unique in how personal it is as a means of accessing data and information.  The web browser, described the other day by Sencha's Developer Guru, James Pearce, as our generation's "Box Radio", is an impersonal "window" onto information.  For most people their phone, especially their Smartphone is an extension of their personality - they have the things they want right where they want them.  They also have access to their friends, their social networks, location information and a host of other things too. 

Consider watching TV.  While the rise of the DVR is impacting how we watch TV, the nature of Twitter is going to save scheduled TV for years to come.  Twitter is the water cooler of the modern age, except you don't have to wait until the next day to discuss what Flynn did on Glee, when you're already following the stream, interacting with  new friends and following new people on the #glee twitter feed. 

The marketing possibilities for the TV companies then become enormous.  That feed and that conversation should be part of your app experience; eyeballs on that feed, should be a part of your app, and the traffic from that app should be fed directly back to you either to come up with new ways to watch - i.e. delivering the best and most interesting of the feeds onto the show in real time, or by creating a social feed later for fans to watch again and follow the conversation they may have missed.

The ROI isn't about the app itself, it's about the opportunity cost of having those eyeballs and fans interacting with your show, brand, organization OUTSIDE of the app experience itself.

Anything else is a wasted opportunity.

Is your app relevant?

We've been saying for a long time that Interactive Features are what make apps relevant.  But you don't need to take our word for it.  Dick Costolo said the same thing at Mobile World Congress in his Keynote, and comScore said as much last year.

We're in the process of working on and then releasing a survey we've conducted of the leading brand apps and how they use interactive media, which has led to a lot of thought here at Viafo about how brands and consumer facing applications are making use of Social, Location and other web services.  Naturally, our goal with this is to get people using our Gateway to make it easier to manage and control these services, but without giving our conclusions away, I did want to outline some things that we believe everybody should have in their mind as they're getting apps created for them.

1. Social Networking is core to most people's use of the web.  comScore found last year that Social Networking on Mobile was the fastest growing use of mobile applications.  So why is it that many, many apps aren't taking advantage of something core to most peoples' lives?

•  It's not about sharing that they have an app - who cares?
• It IS about sharing that something in the app interests them - a feature of a car, a new dress, a type of bag - make it easy for users to share that across multiple networks, sure, make sure that it is tagged as coming from YOUR app, but people want to read about interesting things
• You're spending a small fortune on your social presence?  You've got people full time on Twitter and Facebook managing your tags, @messages and wall - are you sharing these into your mobile app?  If not, why not?
• If a user posts from your app, do you know about it right away?  If not, why not?

2. Location

• Location is much, much more than "Where's my nearest…"
• Are you using location to deliver coupons and offers?
• Are you letting users Check-In to their favorite check-in service from inside the app?
• Are you letting users share their thoughts on where they are and what they're doing?

3. Uploading

• Can users easily share images of your product?  Are you running contests for them?

4. Protecting your brand

• Are you letting people share from inside your app and sending that straight to the web?
• Do youhave any control over what people are saying and how?  If not why not?

Obviously, this is a slightly loaded set of questions because they're all core to what Viafo's Gateway does.  But if you sit back and think about it, are you really taking full advantage of the power of social and location services?

While our goal is to get the Gateway in use with as many people as possible, we're also happy to help people understand the impact on their retail and brand experience.  So do feel free to drop me a line: david@viafo.com

Does it have the GBs and the Wifis?

There's an amusing video doing the rounds on YouTube.  It has a fictional user going into a fictional phone store to buy an iPhone 4, the store, having none, suggests a HTC EVO, there ensues much hilarity with the iPhone user wanting to have nothing but an iPhone, even if, as the store person suggests, the HTC can grant you every wish you'll ever have including an iPhone 4?

We come across this a lot and part of that is a dirty secret of ours, which is, at the moment, we still haven't finished our iPhone port.  There's a reason for that, we're doing better business on other, non-iPhone platforms, and there are elements of the iPhone App Store process that concern me.  For a start, I'm not convinced that I could get the pentagram and goat's blood out of the office floor while we get our test certificates for development devices.

iPhone is a fantastically successful consumer device, but just as Oranges are not the only fruit, Apples are not the only smartphone and as I've said before, consumer electronic trends can be very fickle.

We're just delivering our first work on the new Samsung Bada platform.  It's not been terribly widely publicized, especially in the US, but Bada is the core operating system that Samsung have developed to replace their Real Time Operating System Smartphones.  The Wave, the first Bada device, is a slick handset, nice form factor, 8MB camera, SD card slot music, a nice OLED display which also runs applications which you can buy on the phone.

They went on sale in June in the UK on Vodafone, and Italy on TIM - since then they've sold over 1 Million units.

Yes, that's right, in their first month they sold a million units in two markets.  Ultimately Samsung state they want half their phone shipments to be Bada phones - that's something in the region of 80M units a year, or twice the number of iPhones and iPod Touch units sold SO FAR.

They're also cheap.  In the UK, the Wave is free on a contract.

So who is going to get these phones?  Well, teenagers, less phone savvy people who don't want to spring $200 for a new phone and so on.  But they're almost certainly going to be buying and using apps, especially Brand Related ones.  So my question always becomes, after I've been asked about the iPhone, who are you actually targeting with your application?  Because if you're building one because you think you need one, you're doing it for the wrong reasons.

At the TechCafe2.0 lunch yesterday, the Ben Huh made a great point about not really caring about their market size, because it was so enormous it really didn't make a lot of sense to measure it in a dollars or users way.  I'd make the same argument about the Mobile Market - how big is it?

Well, there's now 5 billion mobile phone users in the world, and thanks to stuff like Bada, in a few years, it'll be the main way that most of them access the internet, especially outside of the US and Western Europe.  So, if you want to think about what the market for your mobile service should be - look at the web, think about web enabled TVs, add in those 5 billion mobile users and think to yourself - why am I so focused on a few million users of the iPhone?

We have an Appz for that...

It's been an interesting weekend as we fiddled with the Mix10 Appz and had a think about what it is we had done with it.  We've had some positive feedback from a couple of trial users who liked the general approach and were extremely impressed with the speed at which we'd put the complete application together.

The question they asked, and I suppose one we need to think about is what we do with that? 

Our business goals are clear, we still intend to license the technology to third parties and provide hosted solutions for some of our services.  However, the tactical appz like the MWC App and the Mix App have given us a boost in the web traffic, if nothing else.  To whit, as of this morning the Viafo website has had as much traffic as our previous record breaking month...

With this in mind I think we'll do a CTIA app - it's in keeping with ViaEventz anyway.  But what else should we do?  The World Cup (Soccer, you know the one that practically everybody in the world plays) is coming up in June - should we build an app for that and have it on our main platforms, which should, by then, include WinMo, Bada, iPhone and Android?  Or does that become a low revenue time sink for us?

To be honest, I don't know at the moment.  I'll let you know when we make the decision.