Facebook recently reported that it has more than 200 million mobile users globally – almost a third of its total user base – making it clear that mobile has arrived as a mainstream media outlet.
But the question facing brand managers unfamiliar with the mobile internet is how to launch a mobile strategy. The main quandary in the sector is which format to invest in – whether to launch a mobile app designed for a specific handset model or a website designed to allow more general access via any internet-enabled mobile.
The debate has divided opinion in the industry with Apple CEO Steve Jobs emerging as a champion of the mobile app-only approach.
Arguably, Apple’s greatest achievement on mobile has been packaging mobile internet services to consumers with the launch of the App Store. The platform now has more than 300,000 apps and has generated more than 1 billion downloads since its launch in July 2008.
Google, too, has stepped up its mobile strategy with the launch of its Android operating system, which can be used by any hardware manufacturer, including Samsung and LG.
Such is the scale of its popularity, Android is expected to be the second-most common mobile operating system on the market by 2014, according to research firm Gartner.
The Android Market trails the App Store in terms of available apps – 100,000 is the latest official figure – but it too is expected to undergo a huge boom as the number of users accessing it increases.
Google CEO Eric Schmidt told visitors to this year’s Mobile World Congress that the company now put “mobile first” in all of its product developments. Outside of its Android Market, the search giant also offers products such as ad placements on its mobile search engine and “click to call”, which allows users to call a business straight from the mobile webpage.
We wanted the web to be the foundation of our m-commerce strategy
Sienne Viet, Marks & Spencer
Google’s mobile ad sales director, Ian Carrington, says that while brands can use mobile apps to further their digital strategy, it would be naive to devise one that excludes mobile web. “We’ve seen a 500% growth rate in the number of search terms in the past two years,” he says.
The company is also using its ability to pinpoint customers using a mobile handset’s GPS tracking system and thus serve location-based ads. “Hyper-local ads [which are served depending on a customer’s location] are going to be big. We’ve analysed our figures and they show that a third of all queries have a local intent,” adds Carrington.
With two such titans pinning the future of their companies on mobile, this year has seen many of the UK’s biggest brands take their first substantial step into mobile with those from the retail sector leading the charge.
Marks & Spencer, Ocado and Tesco have all launched transactional mobile products in the past year and others are set to follow suit. Ocado launched its first transactional app on the iPhone last year and by April of this year the company had reported that it was generating almost 5% of its total orders.
The success of the Ocado iPhone app prompted launches of an Android-compatible version and a later update that made it more compatible for iPad users. Sources at Ocado say that use of its mobile services continues to grow rapidly, although no official figures were available at time of press.
Ocado head of retail John Rudoe says the company decided to launch a mobile app before a mobile-optimised site because its app lets consumers use it offline. “A lot of our [male] customers use iPhones and are commuters [many of them based in the South East],” says Rudoe. “By launching an app, we let users update their shopping lists when they are travelling in places like the Tube.”
Rudoe suggests that the company is contemplating the launch of a transactional mobile website to accommodate customers who do not have an Android or iPhone. “Work is evolving in that direction but I cannot put a date on it,” he says, adding that the benefit of such a strategy is to cut the cost of developing for different platforms such as RIM and Nokia’s Symbian.
Taking a different approach, M&S launched a mobile-optimised website for its transactional debut on mobile earlier this year.
M&S social and mobile development manager Sienne Veit says/ “We wanted the mobile web to be the foundation of our m-commerce strategy. We believe that by not restricting our services to one platform we have broadened our appeal. After launching in May, we’ve had 1.2 million unique visitors to the site, 300,000 who purchased goods there and even someone who bought a £3,000 sofa.”
Veit also questions whether consumers actually notice the difference between a mobile webpage and a mobile app. “Consumers just want things to work and they don’t care whether it’s an app or a mobile page.” She adds that it is quite simple to bookmark webpages on smartphones, therefore justifying the decision to bypass the mobile app route to market.
Veit says M&S launched a mobile site to boost its appeal to younger audiences. Meanwhile, Tesco launched its first transactional mobile app on Nokia Phones to increase customer loyalty with its core group customers before launching on the more glamorous Apple App Store.
Tesco.com’s head of research and development, Nick Lansley, says: “Our core customers are busy mums who don’t have iPhones, and we want to focus on them first. They tend to have mid-series phones from the likes of Nokia.”
Lansley acknowledges that groceries are “not the most aspirational product” therefore his team had to devise a unique selling point for its mobile app. “We carried out research with our core target groups and established there was a need for convenience when it comes to grocery shopping. So we wanted our app to help users update their list during the course of a day.”
Tesco subsequently added a barcode scanner function to its Tesco Grocery iPhone app enabling users to update their shopping lists from home by scanning the barcodes of items they have just run out of. “We’ve also added a number of functions, such as letting multiple users manage one account from two different phones. That way you can have a mum and a dad co-managing their grocery lists,” says Lansley.
John Lewis also announced its entry onto the mobile scene with the launch of a fully transactional mobile site last month. The site can be accessed from any internet-enabled phone and also has a store locator feature.
The launch comes ahead of planned app launches next year, as the retailer aims to further integrate mobile into its online activity.
Jonathon Brown, head of online selling at John Lewis, says: “We’ll monitor users’ behaviour on the [mobile] site before deciding how its planned apps will function.”
Brown has spoken of his ambitions to launch mobile apps that allow users to plan and navigate visits to John Lewis outlets and not simply use them as an accessory to its online page. “Bespoke content should be more app-based,” he says, adding that like Tesco and M&S, John Lewis intends to launch an Android app.
Rival grocery retailers Asda and Sainsbury’s are also expected to follow suit and launch mobile properties in the next year, while online clothing retailer Asos.com has adopted a similar strategy to John Lewis by first launching a mobile site before releasing an app.
The eagerness of these large-scale retailers to embrace mobile is in line with the results of a recent survey by trade bodies the Internet Advertising Bureau (IAB), Interactive Media in Retail Group, and the Association for Interactive Media and Entertainment.
The research reveals that 40% of UK retailers plan to launch a transactional mobile site or app in the next year but three-quarters of those surveyed said they needed further training about mobile commerce.
An IAB study of 1,000 consumers carried out by Work Research also reveals that consumer demand for mobile commerce is ahead of retailer supply. Jon Mew, head of mobile at the IAB, says: “The results show a mix of purchasing methods, but about 21% of people were engaging with m-commerce sites. Yet only around 8% of retailers we surveyed earlier in the year had mobile sites or apps.”
In fact, all three trade bodies anticipate such a large increase in mobile web use that they are working together to form a new leadership council. The aim of the proposed body, which is backed by the UK’s largest mobile operator Everything Everywhere, will aim to establish best practice guidelines for retailers aiming to launch a transactional mobile property.
It is not just retail brands that are embracing mobile. Car manufacturer Volkswagen was able to link 200 sales of its Golf GTI model to downloads of its EReal Racing GTI iPhone game.
Similarly, broadcaster BSkyB has seen more than 7.5 million downloads of its iPhone and iPad apps and has more than 250,000 mobile TV subscribers via its mobile apps and through its video content deals with mobile operators (see client views, opposite).
However, a number of mobile operators are backing the mobile browsing route favoured by Google because they fear the App Store model could sideline them in the value chain of the mobile internet.
Orange Group published a survey last month that revealed seven out of ten UK mobile media users prefer using a browser to access the web. The findings also suggested that cost is becoming less of a barrier to using the mobile internet with only 13% of UK respondents saying they didn’t use mobile media because they thought it was too expensive.
The survey, conducted with research firm CNS, said that 44% of respondents use their phones for checking their social network profiles. Meanwhile, 39% said they use location-based services, such as maps, and 32% use instant messaging applications.
David Gibbs, head of mobile, BSkyB
More and more of Sky’s customers are accessing our services via their mobiles, so we have to try and satisfy all demands and offer a variety of services.
We have a basic mobile website that offers text-based news and sports stories, but apps are where the bulk of our business is.
We had a healthy mobile business selling our content through mobile operators, but the iPhone and App Store came along and turned around our mobile business overnight.
We have a number of apps in the App Store, most of which are free to download. They offer a mix of video and text services, including a mobile remote that has been used to record TV more than 1 million times.
We also have two apps for Android – Sky and Sky News – and we’ve just launched our Football Score Centre app on Blackberry’s App World. This app has benefited from a joint marketing campaign with RIM for Blackberry’s App World and its Torch handset.
For Nokia users, we have launched a remote control app on the Ovi Store and we are looking to introduce more on that platform.
Our mobile strategy is app-centric because apps offer a better user experience, but we are looking to introduce more services to our mobile site. Customer care services available via the site could in future be used as an extension of that facility.
There’s no right and wrong answer as to whether to have an app or a browser-based experience. You have to do what works for your business and customers.
Steve Wing, head of digital marketing, consumer media, Guardian News & Media
Mobile is a crucial part our digital strategy and the statistics show that. You only have to look at the amount of people accessing the mobile site from different devices to see that. In October, we had 15 million page impressions on the mobile site from 2.2 million unique users.
We’re still experimenting with our mobile strategy and I think that a mobile internet site should not be monetised any differently than a normal internet site. So it will remain funded by ads and sponsorship.
However, we’re not ideological about mobile and we are experimenting with a number of different models.
When we launched our first iPhone app, we were not as quick to market as other newspapers but we were happy to take our time, experiment and see how the iPhone was being used.
We don’t have to be the first to market, but we do want to be the best when we eventually get there.
With our iPhone app last year we were the only quality paper in the world to charge for a mobile app [£2.39].
It was a really great product with features such as offline reading so users could read articles on the tube, and the fee was as much about charging for these features as it was about charging for the editorial content.
We’re now looking to move to a repeat subscription model for the iPhone app and will charge £2.99 for six months’ access and £3.99 for a 12-month subscription to the app [which will be free to download once the shift has been implemented].
Ronan Shields is a reporter on New Media Age