Source: Flickr user niallkennedy
Like most Super Bowl match-ups or a season premiere of “Lost,” mobile advertising has failed to live up to deafening hype — and for some pretty good reasons. Those spinning wheels appear to finally be gaining traction, though, thanks to a surge in the use of mobile applications, which is opening the door to an entirely new way for companies to present their brands to consumers via their phones.
The rise of in-app advertising in the superphone era is well documented, but the emergence of app stores has also given birth to sponsored apps that allow companies to promote their brands through free or discounted mobile games and other downloadables. Audi, Honda and Nike are just a few of the high-profile brands that have pursued the strategy, which is just beginning to pick up steam. Gartner recently predicted sponsored mobile apps will account for almost 25 percent of app store sales by 2013 as the overall app market grows to an impressive $29.5 billion.
Unlike corporate-branded apps — think Burger King’s unpredictably successful lineup of video games — sponsored apps are simply underwritten by firms and typically don’t come with in-your-face advertising. And while branded apps closely tied to specific companies, sponsorships often don’t require close ties between the underwriter and the app itself. A good example is Adidas’ Urban Art Guide of Berlin, an iPhone offering that serves as a tour guide for the kind of art you’re not going to see in a museum. While there’s no real nexus between graffiti and tennis shoes, Adidas subtly presents its logo at the bottom of the screen, tying its name to something hip and underground.
That strategy pushes beyond familiar banners and text come-ons, offering something of value in exchange for a consistent, quiet marketing message. Just as importantly, it feels more legitimate than something like Coca-Cola’s Sprite Yard, a decidedly uncool effort to capture the attention of young mobile users through an overly-branded synthetic community.
It’s also a model that could be applied to traditional media as it struggles to take its content to mobile. The inability of newspapers and local TV stations to leverage digital media is well-documented, and the problem is compounded by the small screens and inferior web experience offered by mobile phones. But offering genre-specific sponsored apps could allow traditional outlets to better monetize their content with simple, unobtrusive marketing messages from a single underwriter. A New York Times business-news app could be brought to you by Microsoft, for instance, while an app for Sports Illustrated’s baseball content could be sponsored by Louisville Slugger.
That scenario requires publishers to segment their content, of course, which will only lead to more clutter on the shelves of booming app stores. And the strategy may be only a stopgap fix for downloadable apps: media outlets may find new ways to monetize their content as the mobile web improves, eliminating the need for users to access a specific app for every topic and news source.
But it could also offer a way for traditional media players to cash in on a booming space without clubbing their consumers over the head with ads. And — like underwriting a PBS show — it enables advertisers to tie their brands to relevant content from a valuable, respected publisher in an unintrusive way. Brand-building doesn’t incorporate the formulaic business model of more modern mobile-ad formats like pay-per-action, but it could be a great way to bring quality news content to mobile users — and to make money doing it.