App-enomics: The 3rd Wave of Application Development

Just a little over two years on the market, and the Apple iphone has captivated the hearts, minds and wallets of consumers ranging from yuppy moms with protective cases in colors to match their Porsche Cayenne, to techie developers who fall all over themselves for the iphones ingenious design and intuitive user experience, and just about everyone in between...except, perhaps those millions of loyal Blackberry users.

The smartphone phenomenon is in full effect and is showing no signs of slowing down. Indeed, traditional media, blogs and industry conferences are all humming with news of what is happening in the mobile space. The widespread adoption of smartphones is ushering a new era of communication and marketing potential. My opinion, and the focus of this post is that yes, we are on the verge of a mobile revolution. My argument is that is revolution is really the 3rd Wave of Application Development for smartphones and it will be characterized by brands and content providers linking their messages with applications that provide utility for consumers. Applications that serve a purpose, such as looking up the weather, comparing prices on products by scanning the barcode, or a widely supported location-based coupon application will be the big winners in the hearts and minds of smartphone users. Brands that are able to use mobile to help solve a problem or bring relevant content to users will earn mindshare with smartphone users. By taking a more contextualized approach to mobile marketing, and only attaching their message when it is relevant to a consumers need for information, will allow brands to overcome some of the current pitfalls associated application development. These particular dangers would include the cost of developing for multiple device platforms and the stickiness of apps. Only 10% of the applications have any significant success in the App store market and the average app has a relatively short lifespan. According to Greystripe,
the average iphone application is opened less than 20 times before being deleted. Many do not even get that far considering there are some apps that are thoroughly entrenched and get a significant amount of use.

But before we look to the future, we can take a look back at how it this mobile application craze got started.

Ushering in a New Economy, One Fart at a Time

The Iphone and App Store was a ground breaking, and apparently wind-breaking success with consumers. The first wave of application innovation can be characterized by the unlikely, but overwhelming success of the iFart application. Created by a single developer and somewhat beautiful in its novelty and kitsch factor, the iFart application remains amongst the Top 20 most popular applications downloaded for the iphone along with ibeer, ihunt and ishoot! See the list at Engadget.com


















About iFart: (Source: Tech Blorge)

iFart Mobile creator Joel Comm has stepped forward to be extremely transparent about the number of downloads he receives and where his products are ranked. The day it reached number one, iFart was downloaded a whopping 13,274 times.

The application costs just 99 cents to download from iTunes and Apple keeps 30 percent of the sales. Even after Apple’s seemingly enormous cut the application brought in just over $9,198 in just one day.

This information counters the notion that it’s nearly impossible for a lone developer to make a decent living through the App Store. The earning potential of iPhone application developers is also likely to grow as more people purchase the device.

The iFart application is representative of many of the early applications that populated the app store. Many were simple games, puzzles and visual demonstrations tied into the rich features, such as the accelerometer, native to the iphone and designed by developers in their spare time. Some are entertaining. Some are funny, but many are worthless and most of the early wave of the paid apps populating the Apple app store shared significant commonality; very few were designed with the intention of making any substantial amount of revenue for the developers.

Developers jumped all over the Iphone SDK to develop applications for the device; and program they did. Since it opened, Apple has released over 60,000 applications through its App Store storefront. With Apple earning 30% from every paid app downloaded through the store, Apple created a new-found business model, and in turn, a new App economy. On January 16, 2009, Apple announced on its website that 500 million applications had been downloaded.^[11] The billionth application was downloaded from the App Store on April 23, 2009.^{[Source: Wikipedia]}

Milestones

Date	Available apps	Downloads to date
July 11, 2008[13]	500	0
July 14, 2008[10]	800	10,000,000
September 9, 2008[14]	3,000	100,000,000
October 22, 2008[15]	7,500	200,000,000
December 5, 2008[citation needed]	10,000	300,000,000
January 16, 2009[11]	15,000	500,000,000
March 17, 2009[citation needed]	25,000	800,000,000
April 23, 2009[12]	35,000	1,000,000,000
June 8, 2009[16]	50,000	1,000,000,000+
July 11, 2009[citation needed]	55,000	1,000,000,000+
July 14, 2009[2]	65,000	1,500,000,000

What shocked everyone is how many people did download the early applications, and the fact that a Top 5 paid app could net substantial revenues for developers. It was these innovative early applications that showcased the unparalleled slickness of the user experience on the iphone, and and an ever growing population of app addicted users is what got the attention of many of the web 2.0 companies and brands that spurred the 2nd Wave of Application Development.

Social Media Rushes In - The 2nd Wave of Application Development

Many of the free applications populating the early app store were mobile portals for other Social Media or Web 2.0 technologies such as Facebook, Myspace, Shazam and Urban Spoon. These apps were designed to extend the reach of these various media and drive adoption amongst smartphone users.

And did they ever. To date, Facebook has been the big winner in the mobile social media space. The recent stats are astounding in how social media, in particular Facebook, is driving growth in mobile usage. According to the Fb website:

• There are more than 65 million active users currently accessing Facebook through their mobile devices.
• People that use Facebook on their mobile devices are almost 50% more active on Facebook than non-mobile users.
• There are more than 180 mobile operators in 60 countries working to deploy and promote Facebook mobile products.

Suddenly, the explosion in the breadth of the iphone app userbase and the stickiness of social media applications caught the attention of marketers across the globe. Talk about sticky...check out these survey results on how attached US Smartphone users are to their devices and apps. Applications that could live up to quality standards behind an brand, be it a web 2.0 brand like Google Earth, Wikipedia, Facebook or Twitter, or established brands such as Pizza Hut, The New York Times and Proctor and Gamble - through their SitorSquat application are leading the charge into in the ever evolving App-Economy.

In an article from MobileMarketer.com, Paul Gunning CEO of Tribal DDB of New York describes the how brands are approaching applications for mobile marketing and advertising.

“When you look at mobile, it goes beyond an advertising platform—brands are trying to use it to solve real business problems,” Mr. Gunning said. “It may be ad-driven in beginning, but actually mobile is valuable as an interface with consumers due to its ability to affect their retail behavior at the point of sale is really powerful.

“After they go in the store they send an SMS or go on the mobile Web for product information and a brand delivers back a video or customer reviews of that product,” he said. “Mobile goes far beyond simple ads, which is why it’s one of the most exciting platforms out there.

“It won’t be selling just selling eyeballs and impressions, there are real problems that mobile can solve.”

The trend of ingraining marketing and advertising messages while providing consumers a utility has spurred the 3rd Wave of Application Development and we are beginning to see some early examples. As brands and content creators invest in mobile interactions and the ecosystem become more robust, it is going to have have a significant impact on not only who pays for mobile content, but also the quality of the user experience.

I think the Urbanspoon application is an early leader in the space. The fact that the iphone restaurant search application is now adding reservation features to their offering that has competitor opentable.com shaking in their boots. Give people a fun and easy to use an application that helps them find local resto's, throw in the ability to complete the transaction by reserving a table and PRESTO! You have a killer app. Who wins? The consumer because its so easy to find good spots near you. Urbanspoon wins because they have a juicy revenue model of $1 per reservation made in their network of 10's of thousands of restaurants. Lastly, those same restaurants win because they get their name and profile directly in the hands of their local customers who may not normally walk through their front door.

Another great utility app is Fanadango. This service allows users to search and buy movie tickets through their mobile phone- either iphone app or mobile site. Unfortunately, it is not yet available in Canada (grrrr. typical) but this exerpt from a Mobile Marketer post details how Fandango mobile is changing the way people buy their movie tickets.

Fandango masters mobile
Fandango is the nation’s leading movie ticketing source and one of the top five mobile commerce sites in the Unites States, according to Nielsen.

The company first launched its WAP site in October 2005. It also made its services available on carrier decks for Verizon, AT&T and Sprint.

In March the company launched its iPhone application, which has been downloaded 2.5 million times since then.

“Our iPhone application has consistently shown up as one of the top free entertainment apps in Apple’s App Store,” said Ted Hong, chief marketing officer at Fandango. “Mobile has fundamentally changed Fandango’s value proposition.

“Tickets sold on mobile are on average 1.5 to 2 hours closer to the showtime than tickets purchased on the Web,” he said. “User behavior is different – mobile users browse more and more often and this creates new advertising opportunities."

The last example is a true brand supported app that has filled a demand from consumers. The SitorSquat App allows users to find, search or tag public restrooms. For those moments that just can't wait, users can search the database of restroom facilities to find the nearest and cleanest one. Users can also search for handicap facilities and baby changing stations. All brought to you by PnG brand, Charmin bath tissues.

"SitOrSquat is the perfect partner for us," said Dewayne Guy, external relations manager at P&G, Cincinnati, OH. "We're not going to reinvent the wheel by creating this application. We found somebody out there whose mission matches ours. It creates the perfect partnership. The trick is finding utility in a brand beyond what the product does, and SitOrSquat is a great example of that,” he said. “When you get traction, suddenly the scalability takes off and spreads virally." Source: Mobilemarketer.com

That's it for now. I will continue to draw attention to examples of the 3rd Wave of Application Development that are contributing to the mobile revolution. If you have any examples of apps that are pushing the limits of utility and marketability please share!

We are still in the early stages of the sea-change and challenges remain for application developers and content providers in terms of the cost of developing native applications for operating systems on all of the devices on the market. Even Google has said that it has not found evidence of ROI for developing applications beyond the core devices - iphone, Android and Blackberry.

Source: Engadget as of April 2009

All-Time Top Free Apps

1. Facebook
2. Google Earth
3. Pandora Radio
4. Tap Tap Revenge
5. Shazam
6. Pac-Man Lite
7. Backgrounds
8. Touch Hockey FS5
9. Labyrinth Lite Edition
10. Flashlight
11. Urbanspoon
12. Movies
13. iBowl
14. Lightsaber Unleashed
15. Sol Free Solitaire
16. MySpace Mobile
17. Virtual Zippo Lighter
18. The Weather Channel
19. BubbleWrap
20. Remote

All-Time Top Paid Apps

1. Crash Bandicoot Nitro Kart 3D
2. Koi Pond
3. Enigmo
4. Bejeweled 2
5. iBeer
6. Moto Chaser
7. PocketGuitar
8. Flick Fishing
9. Tetris
10. Texas Hold'em
11. Super Monkey Ball
12. Pocket God
13. Cro-Mag Rally
14. Ocarina
15. Fieldrunners
16. iFart Mobile
17. Touchgrind
18. iHunt
19. iShoot
20. Monopoly Here & Now Edition

Onedegree.ca Coverage

A few weeks back I was invited to act as a correspondent for Onedegree.ca - a leading Canadian social media and digital marketing blog. I attended the Canada 3.0 Forum in Stratford Ontario, which was a great event for industry, academics and government to create a dialogue around defining Canada's digital future.

Working with Onedegree.ca was an opportunity to expand my influence in the blogosphere to a site that actually has a readership and a specific focus. Some details about Onedegree.ca:

Established in 2005, One Degree is the central gathering place for Canadian
Online Marketers. We have over 2600 active subscriptions to One Degree via
email as well as RSS feeds. In addition, we reach via the site an average
of 12,500 unique visitors per month. One Degree readers are primarily
Canadian Internet marketing professionals and those in related fields like
web design, PR, analytics, etc. We're one of the largest (if not the
largest) Internet marketing blogs in Canada. One Degree has repeatedly been
labeled a "Must Read" blog by Marketing Magazine. And we typically rank in
the top 100 on Advertising Age's "Power 150" - their global ranking of top
Media and Marketing Blogs.

Covering the Canada 3.0 Forum was a real treat because as "Press", you have a mandate to speak to anyone. It is a great way to start a conversation and gives your interaction purpose. I was able to interview Amanda Holtsrom, of Opentext, and Thomas Purves, a Toronto based technologist, futurist and blogger. Their interviews provided the basis for my article on the importance of marketers in creating conversations between the end-user and the engineers and designers who are creating products. (Part 1 of The Tie That Binds Great Design: Marketers Must Be Conversation Starters, and Part 2)

I was also lucky enough to interview Avi Pollack, Head of Innovation for RBC and we spoke about innovation in the financial services sector and RBC's approach to new technology.

Erin Bury filled me in on Redwire, a startup community for entrepreneurs and startups based in Toronto.

Lastly, Gary Schwartz, President of Impact Mobile gave a very interesting interview on mobile communication and how SMS is still king in terms of user base and creating mobile marketing campaigns that get results. He certainly is a believer in text and is not afraid to speak frankly about the reality of creating apps for new smartphones. In his opinion, LONG LIVE TEXT! Food for thought for me as I continue to explore mobile applications as viable businesses.

All in all, covering events for Onedegree.ca was a great experience. I hope to do more work with them in the future.

Every Tribe Needs a Guy #3

A subscriber to the Seth Godin school of marketing, I have been following up on his latest (or latest to me) conceptualization of tribe marketing. He argues the Internet has ended mass marketing and revived a human social unit from the distant past: tribes. Founded on shared ideas and values, tribes give ordinary people the power to lead and make big change. Check out his talk on tribes at the TED Conference

If you look at this video and see a dancing fool you will be entertained for 3 minutes. But if you look at it in terms of cool little social experiment on how an idea is spread through a population, as
Seth Godin does on his blog , suddenly, we have a lot more to talk about.



Seth Godin's take on the relevance of the video:

My favorite part happens just before the first minute mark. That's when guy #3 joins the group. Before him, it was just a crazy dancing guy and then maybe one other crazy guy. But it's guy #3 who made it a movement.

Initiators are rare indeed, but it's scary to be the leader. Guy #3 is rare too, but it's a lot less scary and just as important. Guy #49 is irrelevant. No bravery points for being part of the mob.

We need more guy #3s.

So what what type of Guy or Gal are you? I guess another way to put this question is to dig deep and ask yourself if you could picture yourself being Guy#1? Creating spontaneous magic in large social groups is a difficult thing to. Sometimes things will take off like they did in this video and some times they will fall flat on their face and you will be left in the spotlight, holding the microphone with thousands of people looking at you like you should be in some sort of restraining device. Something tells me that Guy #1 would have been just as happy having the hillside to himself, grooving out on life for the next several hours or days, and not caring one iota that thousands were gawking at his moves.

But then again, Guy#1 obviously does know one of the central rules of marketing and sales: Location, Location, Location. He chose a beauty of a spot at the edge of the Gorge concert site, lots of room and prime visibility to the 10's of thousands of others attending the Sasquatch Festival (it's official, I have to go to this concert next year!). Talk about picking THE spot for the birth of a movement. He also knows his audience and timing. It looks like this took place in the later afternoon. The festival goers had probably been partying and listening to bands for most of the day while sippin on rapidly warming American beers. It was a decisive moment for the concert, keep standing and dancing or sit down on your blankets and find something to eat before the next act? Guy #1, 2 and #3 helped make up a lot of other peoples minds. The band should think about hiring them full time as backup dancers.

Guy #2 would have given guy #1 a massive high-five at the end of the song and gone back to his buddies to make sure they got the hilarity on their video phones. Guy #2 has a great sense of humour and likes to have a good time. Kudos to you Guy #2.

But it is Guy #3 who takes this wild tribal dance party to the next level. When he showed up on the scene, everyone else watching said to themselves, "Yup, I should be dancing dancing barefoot on a hillside RRIIIGGGGHHHTTT NOOOWWWWW!!!!!"

So how can marketers identify people as being key influencers of trends? They are those who pick up early on a trend and are not afraid to join in, lend their support and will perhaps be quite vocal about the cause. Do they have other key characteristics? Malcom Gladwell talks about the great mavens or communicators that are at the roots of movements. But the internet is allowing so many more people to influence trends in much more aggregate fashion. What if people don't need to be high profile to influence trends, what if they are just there doing their thing like these 3 dudes? Does that make the influencing process less important or change their role within it?

More to come on this topic in the future. Please feel free to comment or add your thoughts on who or what it takes to grow a movement.

A New Perspective on Twitter

As an aspiring entrepreneur, one of the things you hear over and over again is that you are going to make mistakes, and many of them. The most important difference between a successful entrepreneur and those destined for failure is that you must learn from your mistakes and apply those lessons in the future.

So here goes....I was wrong. There. I said it.

My original conceptions of the micro-blogging phenomenon known as Twitter were not fully formed and I am embarrassed that I was for a brief moment, a Twitter hater. My post from Wednesday March 25, 2009 titled, "The Truth Sometimes Hurts..." is a rather hilarious and derisive commentary on the value of Twitter, tweeting and twitterers. Mostly, I reposted the Supernews! video because it made me laugh....a lot. I would be interested to find out whether the guys over at Supernews are Twittering, or continue to think of it as a ridiculous waste of time for self-involved twits. Maybe I will see if I can find the Supernews! account and follow it.... Just kidding.

Shortly after that post I decided to find out for myself what all the Tweeting was about and over the last month and a half, I have become a believer, sort of. I still think that approximately 95% of all Twittering is pointless, self-indulgent dross (see my Twitter page), but that other 5% is what we should be excited about.

I realized the error of my ways because, as someone who is very interested in marketing (digital, mobile or otherwise) I understand the importance of making headlines. That is what marketers do and Twitter has ushered in a new era of communication that forces people to take stock of the fact that we are all constrained by time. In a world with so much information, two eyeballs and limited amount of time are severely limited resources. Accordingly, if something is of value to someone else, you best be able to communicate that value whether it be pertaining to thoughts, ideas, links and jokes in 140 words or less.

For the purpose of making headlines travel further and faster than ever before, Twitter is an amazing tool for businesses. I believe being a business on Twitter has much more value than indivduals tweeting about their bad hair days. Of course, being a business, or representing your company on Twitter does come with its own pitfalls. This blog post, by Bill Sweetman on the OneDegree.ca blog details some rules to live by when executives are considering a Twitter presence. Another example, of what can happen if you don't treat twitter as the open public forum is this much re-tweeted public spat between National Post reporter David George-Cosh unleashes a Twitter tirade on marketing consultant April Dunford. This is Twitter at its most evil and most inane.

But for most, Twitter is a practical and simple tool to share headlines with your supporters, whether they are customers, investors, advisory panel, suppliers, vendors or groupies. Twitter is a valuable way to share the small victories of running a business (especially a growing one) day-to-day. A new product launch, a new deal being signed, a conference you are attending or a link to a video of a presentation you gave. These are all valid and important Twitter topics that will help you stay relevant in the minds of your supporters. Twitter can also be an important tool to reasearch sales leads. If you are trying to build a relationship with someone, you would be suprised how much info you can glean from a Twitter account about their business activities. "Oh yeah, I saw that you attended the SXSW Festival this year, what did you think, was it a worthwhile event to attend?"

In the end it's all about time and timing. No one said creating something unique, profound or interesting in such a short span is easy, but it does force us to be relevant. Twitter user, Janis Krums
hit the social media utility jackpot on January 16th, when the ferry that he was riding on was the first on the scene to rescue passengers from US Airways flight that crash landed (safely) in the Hudson River. Krums was the first person to cover the event and the images he uploaded to Tweetpic were distributed around the world as the story broke.



I am fully aware that even as I write this post that is mainly about relevancy, the irony of using 3 month old posts and news stories is rich. But hey, I am trying. More to come as I further explore how social networking and social media are influencing the way we communicate with each other. In the meantime, if you want to discuss more, you can follow me on Twitter! Shameless....:)

Startup Metrics for Pirates (March 2009)

A Great Resource on Startup Metrics (For Pirates)

Startup Metrics for Pirates (March 2009)

View more presentations from Dave Mcclure.

The Truth Sometimes Hurts....

Will Transit Funding Include Ticketing Innovation?

Harper, McGuinty roll out transit funding

The federal and Ontario governments recently announced they are injecting up to $500-million into the province's GO Transit system as part of a plan to help kick start the ailing economy. The investment is welcome and I will certainly be following this story because it is one of the first concrete examples of the Federal government using public funds to stimulate the ailing Ontario economy. Though details of the GO Transit funding are still scarce, early reports indicate the investment will be put towards twelve GO stations, from Mississauga west of Toronto to Markham in the east, and will improve access to parking as well as upgrade rail lines to improve reliability.

It will be very interesting to see how this project plays out over the next several years in improving the issues that commuters deal with daily. I am specifically interested in how technology will be deployed to improve the commuter experience in areas of mobile ticketing, contacless technology and mobile information portals. Brick and mortar investments in tracks and traffic congestion are essential to a progressive transportation solution, but one only has to look to other major cities such as San Francisco, London and Paris to see that virtually all are investing heavily in technology to improve rider experience and promote public transit.

Though I am not a GO commuter, I do use the TTC frequently and have been following the $6B development plans for new routes and rail lines with interest. Similarly, details have been sparse about how the TTC will embrace technology to improve rider experience and make it easier to use public transit. One does not have to think very hard about the ways mobile ticketing or contactless cards could improve the TTC experience. Being able to go online, via your PC or mobile to top-up your contactless card or mobile wallet would be so sweet! Never having to wait in those huge snaking lines to buy your monthly pass- who doesn't want that?

Torontonians are known for embracing technology. Unfortunately our public works and government institutions are not..

Mobile and e-ticketing solutions would also help to avoid any future issues with outdated and annoying tokens- much less having to prop up sagging TTC buildings that are straining under the weight of all those little slugs.

If you have any info on these issues faced by the TTC, Go Transit or provincial programs in general feel free to participate in the discussion!