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In-App Mobile Purchase Revenue Predicted to Jump 477% by 2015

Mobile applications are one of the hottest marketing opportunities for brands today, but companies are still trying to figure out how to best use mobile applications to drive revenue.

According to a study by IHS Screen Digest, in-app purchases are the way to go. Revenues from in-app mobile purchases are going to jump by over 477% from $970 million in 2011 to $5.6 billion in 2015. In other words, if you’re not already investigating ways to offer your brand products and services through in-app mobile purchases, you need to bump it up the priority list.

eMarketer paired this research data with information from an ABI Research study, which found revenues from mobile applications (including in-app purchases, in-app advertising, subscriptions, and pay-per-downloads) reached $8.5 billion in 2011. The study reports that number is expected to skyrocket by over 440% to $46 billion in 2016. Putting the numbers from both studies together, eMarketer reports that in 2011, in-app purchases made up 39% of total mobile app revenues. By 2015, that percentage will increase significantly to 64% of total mobile app revenues coming from in-app purchases.

Taking it a step further, eMarketer notes that 44% of mobile app users don’t make in-app purchases until at least the tenth time they’ve used the app. This data comes from a separate study by Localytics. 33% make an in-app purchase between the second and ninth time they use the app, and just 22% make an in-app purchase the first time they use an app.

These statistics do more than just raise a big red flag if you’re not already planning ways to offer your products and services through mobile in-app purchases. Within the next few years, mobile app users will be very willing to make in-app purchases. The trick for marketers is to come up with great offers that are available to the right audiences.

Even more tricky is trying to find ways to get mobile app users to make purchases earlier rather than waiting until their tenth use or later. Power mobile app users have demonstrated they’re comfortable making faster in-app purchase decisions, but convincing the rest of the mobile app user population to reach the same comfort level will take some time and effort.

Now is the time to get started.

What do you think about the future of mobile in-app purchases? Leave a comment and share your thoughts.

Image: jhaymesiviphotography

LinkedIn Company Follow Button is Good News for Brands

Big news from LinkedIn this week — it just got a lot easier for companies to increase the number of followers on their LinkedIn Company Pages! LinkedIn announced the launch of the LinkedIn Follow Company button on the LinkedIn blog this week, and companies like AT&T, Sony Electronics, and American Express OPEN are lining up to install it on their websites and blogs. With 2 million companies in the LinkedIn network, it’s safe to assume consumers will start seeing the new LinkedIn Follow Company button across the web very soon.

LinkedIn is hyping the benefits of following Company Pages as a great way to keep up with company news, job openings, and industry trends. A distinct effort is being made by LinkedIn to position Company Pages as very different from Facebook Pages for brands and companies. For example, AdWeek reports the following from the LinkedIn announcement this week:

  • LinkedIn members are professionals and have high expectations for the companies they follow on the site.
  • 60% of LinkedIn members expect Company Pages to offer industry insights and news.
  • Approximately 1 out of 2 LinkedIn users who already follow Company Pages claim they are more likely to buy products or services from a company that is more engaged and interactive with its followers.

As LinkedIn’s director of corporate communications, Hani Durzy, told AdWeek, LinkedIn members are, “more strategic in their decisions to follow companies here as opposed to other networks.”

Companies that recognize the difference between audience expectations on LinkedIn versus Facebook or other social destinations will experience the highest levels of success through their Company Page activities.

It’s easy to get the code for the LinkedIn Follow Company button and to add it to your company website, blog, and other online destinations where your company or brand have a presence. When LinkedIn members follow your Company Page, your status updates appear in their LinkedIn home pages giving you more exposure and more opportunities to engage with them. In other words, if you haven’t gotten the LinkedIn Follow Company button yet, get it now. It can only help your company and brand grow.

Generation C Redefines Media Consumption

Americans born between 1978 and 1994 are now between the ages of 18 and 34. This is a generation of people that grew up with VCRs and may never have seen a black and white television let alone a television with a dial instead of a remote control. Even the oldest members of this generation spent most of their lives with mobile phones and Internet access. Many have never had the need to use a pay phone and have never seen a corded telephone with a rotary dial.

According to a new study by Nielsen, this generation has been dubbed Generation C — the Connected Generation, and they’re changing the world of media consumption in ways previous generations saw only in Star Trek episodes and James Bond movies.

As Nielsen explains, this generation “is taking their personal connection—with each other and content—to new levels, new devices and new experiences like no other age group.” Members of Generation C make up 22% of the population of the United States, and their preferred media consumption habits are changing the way brands communicate with consumers.

This generation of people might only make up approximately one-fifth of the U.S. population, but they represent a large segment of consumers who watch online video (27%), visit social networking sites and blogs (27%), own tablet devices (33%) and use smartphone devices (39%). They truly are “always connected” and they expect everyone else in their world to be connected at all times, too.

Brands have to find new ways to stand out in the clutter of media messages that members of Generation C filter through each day, and brands have to learn how to break through that clutter through new media opportunities.

The need to redefine marketing for a new generation of consumers isn’t new. Advancing technology and communications and evolving social and political views play a large role in redefining each generation and marketing has to change as a result. If your brand wants to connect with Generation C, you need to start thinking and living like them. They’re unique, just like every generation before them.

You can get more details in the complete report: Nielsen and NM Incite’s U.S. Digital Consumer Report.

Image: Martin Abegglen

Celebrity Brand Endorsers Can Still Give Brands a Positive Sales Lift

sofia vergara cover girlResearch has shown again and again that celebrity brand endorsers don’t typically drive brand sales, but there are always exceptions to every rule. In a recent study, Women at NBCUniversal determined that several celebrity endorsers are making a positive impact on a number of brands. What will surprise you even more is who those celebrities are and which brands they’re pitching.

Women at NBCU used its Brand Power Index (BPI) to track 500 brands between August to December 2011 that are most talked about by women. The results of the study are based on a compilation of online search data, social media buzz, and person-to-person interviews. The celebrity endorsers and the brands they pitched that had the biggest impact on female consumers and got the most buzz from women were:

  1. Maria Aragon for Gap: Gap jumped up 49 spots on the Brand Power Index with the help of the 11 year-old YouTube star singing “I Want Candy” in the company’s holiday commercial.
  2. Selena Gomez, David Hasselhoff, and Cookie Monster for Kinect for Xbox 360: With this ensemble cast of diverse celebrity endorsers pitching a variety of Kinect products, the brand climbed 119 places on the Brand Power Index.
  3. Sofia Vergara for Diet Pepsi, Kmart, and Cover Girl: Sofia Vergara endorsed three brands during the holiday season and all three of them moved significantly up on the Brand Power Index — Diet Pepsi jumped 49 places; Kmart increased 29 places; and Cover Girl experienced a 37 spot increase.
  4. Ty Burrell for Minute Maid: In a continuation of Minute Maid’s “Beta male persona” commercials that began in 2010, Ty Burrell helped the brand jump 121 places on the Brand Power Index.
  5. Jon Bon Jovi for Advil: Sharing his personal story of chronic pain and how Advil helped him relieve some of that pain, the rock star helped the Advil brand rise in the Brand Power Index.

While these brand experienced a positive lift in buzz among the important female consumer audience in late 2011, the question is whether expensive celebrity endorsements drive the required ROI and whether that lift can be sustained. Every brand wants to raise awareness, increase positive sentiment, and drive buzz, but if that buzz doesn’t translate into sales at some point, then additional investments will need to be made to turn buzz into sales.

The lesson to learn from the Women at NBCU study is simple. Celebrity endorsers can have a positive effect on brand buzz and sales. However, this is an area where you need to tread carefully. Celebrity endorsers aren’t cheap and their reputations can change in a split second. Just ask Pepsi who learned that lesson when it ended its relationship with Madonna. That’s not the first or last time a celebrity endorser and brand had to part ways at the brand’s expense, and that’s not a road you want your brand to have to travel.

PayPal Targets Impulse Shoppers with New QR Codes

PayPal launched a quick response (QR) code campaign for Valentine’s Day in Singapore that allows people to make purchases by scanning QR codes on large ads posted on subway walls. The QR code ads are being called “mobile shopping walls” and can be found in 15 subway stations throughout Singapore. PSFK reports that each ad featured a different Valentine’s Day product offer from one of eight participating retailers.

Consumers simply needed to download the PayPal QR code reader app to their mobile devices, and then scan the QR code using the app. Once the QR code was scanned, the consumer would be led directly to the login page for his or her PayPal account where the advertised product could be purchased instantly.

There is no doubt that these ads targeted impulse shoppers who needed to make last-minute Valentine’s Day gift purchases. For PayPal and the participating retailers, the campaign made it incredibly easy for consumers to respond to the ads and close a transaction quickly and easily. It’s great to see this type of direct marketing through QR codes which have been primarily used to lead consumers to informational pages, lead forms, and contests in the past.

Of course, QR codes are still in their infancy and until more consumers not only learn how to use them but also deem the effort required to use them as valuable enough, their growth will be slow. In mid-2011, comScore reported that only 6.2% of the U.S. mobile population had scanned a QR code on their mobile devices. The majority of scanned QR codes were found in newspapers and magazines (49.4%) or on product packaging (35.3%). Furthermore, 58% of mobile users who scanned QR codes did so at home, and 63.9% scanned QR codes at a retail or grocery store (39.4% and 24.5%, respectively).

It’s only a matter of time until we start seeing more brands using QR codes in creative ways and places to actually drive real-time, direct sales. However, the shift to launching transactional QR codes needs to happen quickly before a larger percentage of the mobile population perceives them as strictly informational and lacking added value. Education and re-education need to happen in order for QR codes to have a chance at long-term success for brands and businesses.

What do you think about the future of QR codes? Can they turn into transactional tools that add value to consumer brand experiences? Leave a comment and share your thoughts.

Image: CoCreatr

Microsoft Launches Social Display Ads with People Powered Stories

This week, Microsoft announced it will begin rolling out social display ads powered by Bazaarvoice (a social commerce company) in April of this year. It’s another big step that the company has taken to integrate social data into its own product offerings. Already, Microsoft is partners with Facebook to offer its Bing search engine users social search results. Now, Microsoft’s premium advertisers will be able to add a social element to their display ads through the new “People Powered Stories” ad units.

The social display ads will be targeted just as traditional display ads are targeted, but they’ll include a new social component. Using information gathered from Bazaarvoice, the ads will include user-generated product reviews and ratings with more features expected to be added in the future.

For example, Microsoft plans to add blog posts, online forum comments, tweets, videos, and expert reviews to the social content included in its social display ads in the future. Microsoft also intends to launch People Powered Stories to mobile devices, and ultimately, social display ads could be made available to non-premium advertisers, too.

According to AdWeek, Microsoft is already seeing a lift in positive results for social display ads. In the company’s own People Powered Stories test ad for Windows 7, which is targeted to college students, the company has tracked a 6.3% lift in purchase intent and a 23 point lift in believability and authenticity in comparison to traditional high-tech display ad results. Furthermore, Microsoft reports that consumers spent an average of 62 seconds with its social display ads.

Social display advertising will undoubtedly be very popular among advertisers. At launch, People Powered Stories will be served on Microsoft sites as well as on sites in the Microsoft publisher network.

Research has shown again and again that consumers are more affected by reviews and ratings from other consumers (even if those other consumers are strangers) than they are by brand advertising messages, marketing brochures, and sales pitches. The concern for consumers will be related to privacy and whether or not they want their reviews, ratings, and so on shared through third-party ads. The concern for brand managers and advertisers will be how quickly they can start running social display ads. You can bet this is one type of ad unit that will be hot in 2012 and beyond.

What do you think? Write a comment and share your thoughts on People Powered Stories and social display advertising in general.

Image: Microsoft