Why your ad agency likes mobile appswhy that might not deliver the best ROI for you

Industry awards tell you a lot about a business. In recent years, the trends at Cannes Lions – the biggest date in the advertising world’s calendar – show a growing appetite from ad agencies for mobile campaigns. The latest plat du jour is mobile apps for niche audiences, displacing messaging, mobile Web, mobile ads, QR codes, Bluetooth and all the other tools in mobile’s box. It seems the trend is away from campaigns that integrate mobile with other media such as outdoor or magazines, towards mobile app-only campaigns. There are exceptions, such as the Homeplus Subway Virtual Store, which notably was the only mobile campaign to win a Grand Prix Lion, but the trend is towards mobile apps. So why have ad agencies become so focused on apps? Is this new love affair a good thing for their clients? mobiThinking asks the experts.

• 2011 mobile winners at Cannes • 2010 mobile winners at Cannes

“When I saw the mobile winners at Cannes Lions, I immediately tweeted how the majority of the advertising festivals tend to think of mobile marketing only in terms of iPhone apps,” comments Leo Xavier, CEO, Pontomobi, the Brazilian mobile agency that built the official Cannes Lions mobile apps. “Obviously, it is a disappointing to see that four Gold mobile winners are nothing but an iPhone app. I really like the Heineken Starplayer app, though, because it is based on the new concept of co-viewing. And, yes, the best option to deliver that experience is an app. The problem here is that it is only for iPhone.” (Apple devices were about 3.5 percent of handset sales in 2010, so focusing on iPhone-only will exclude the vast majority of the client’s customers).

The more you explore the subject, the clearer it becomes that mobile agencies and ad agencies are on a different wavelength. Ad agencies treat mobile as they do other media, billboards, TV or magazines, i.e. ideal for short-term attention-grabbing campaigns – the only surprising thing is that they have made the app the ad, rather than running a mobile advertising campaign (which is more akin to their other media business). This approach jars with those mobile agencies that have been pushing mobile as a channel for long-term customer engagement.

“It makes me happy that Cannes and the ad world are excited about mobile, but sad at what is deemed as examples of global excellence. The app myopia is so boring. It’s not so much the fact it’s an app – it’s the fact that it’s a single native app for a slice of the audience. This is the bigger issue,” explains Geoffrey Handley, co-founder of mobile agency, The Hyperfactory. “When you see this, you know mobile is not being understood or treated seriously by the agency or client… and its not the client’s fault in most cases… it’s the lack of depth and experience on the agency side to understand why its NOT OK to just build an iPhone app and tick off the mobile strategy box.”

The thing that really adds to the frustration for mobile agencies is that most brands still take their advice on mobile from their ad agency, rather than consulting a mobile specialist. Once the decision has made to develop an ad app, the ad agency often ends up outsourcing the technology work to a mobile agency, but the opportunity for the mobile experts to provide creative input is limited and there’s no chance of influencing the long-term mobile strategy of the client. This year, however, there are fewer mobile agencies included in the credits of the award-winning campaigns compared with previous years at Cannes – this suggests that either ad agencies are starting to do mobile development in-house or they’re not giving fair credit to their partners.

The importance of Cannes on the ad business should not be underrated. Not only is it a signpost to what has been happening, it is a signpost to what will happen in the business, as Cannes winners spawn me-too campaigns from ad agencies worldwide. Cannes juries are very conscious of this legacy, according to Tom Eslinger, digital creative director, Saatchi & Saatchi, who ran the Cannes Cyber Jury in 2007.

“When we were in the final rounds of my Jury, I was conscious that what we were awarding would not only change the lives of the creators, but creates ripples in our business: Lions are famously sign-posts for what the industry makes a lot of the following year and usually badly resurrected versions. Think ‘ Pet Semetary with horribly deformed versions of beloved ideas coming back and not leaving. The beauty of Homeplus, Mini Countryman and Starplayer is that they are terrific flashpoints on a journey of a really young and developing medium, all building on a set of ideas and familiar activities with a fresh twist,” says Eslinger.

“Inevitably the debates in the final days dissect the channel/execution/idea on the work that was up for Lions. Looking at the winners and shortlists this year, I can almost hear the debates now. I think that part of the chat would be around ‘did this need to be mobile and why?’ Homeplus, Mini Countryman and Starplayer, regardless of app v Web-app debate, had to be mobile and being application-based makes sense: it only needs to do one or two things and they did it well. The place where we all need to be careful is not building ‘Websites in apps’ when just being on the mobile Web makes the most sense.”

No advocate of mobile Web is going to dispute that logic. After all, surveys of smartphone customers suggest most consumers prefer browser access to in-app access for all popular mobile activities except games, mapping, social networking, and music. But if you remove all native apps that duplicate the role of a mobile site, then what does that leave? A few situations where native apps do – or are perceived to do – a better job than Web apps and at the other extreme a lot of ad apps – i.e. branded games, and other novelties for niche smartphone customers that will be deleted when the campaign ends.

To get a perspective on the appeal of apps to ad agencies, it helps to look at the TV, radio and billboard campaigns that ad agencies enter at Cannes. The advertising creative – the beautifully-shot TV ad or the radio ad with the addictive jingle – is the ad agency’s product. Mobile apps fit this bill: they are neat package of visually-appealing creative material, with a limited lifespan and once expired you need to do another one. Unlike traditional media ads, apps are also interactive and results are measurable – assuming you consider downloads as a measure of success. And yes, it might win you an award at Cannes – unless, of course, your competitors have raised the bar.

From the client’s perspective, the question is: if the purpose of the app is advertising, then is this the most effective form of advertising? For example, when you add up the cost of consultancy and development of the app, plus the cost of promoting it, will it deliver the same reach or ROI for the client as spending the same money on mobile search ads to drive visitors to your mobile site (where they can enter the competition, play the free game, sign up to the loyalty program, browse the catalogue and buy the product)?

What distinguishes the Homeplus Subway Shop is the goal wasn’t advertising, though it made excellent use of advertising media. It combined outdoor media with mobile QR codes to create a virtual shop in the subway. This enables South Korean commuters to purchase groceries pictured on a billboard, by photographing the QR code with their mobile phone, which are later delivered to their home. It delivered real results – on-line sales increased 130 percent. This is mobile strategy in action, not advertising, potentially these virtual stores could continue in perpetuity. There’s no surprise that this campaign appeals to mobile agencies.

“When you take a look at the Homeplus case study, you can find a great idea that is only possible through mobile activation. It is not about the technology, but the creative use of it. And that’s what we have tried to explain a thousand times to agencies and clients,” explains Pontomobi’s Xavier.

The reassuring message from Cannes is that the advertising world also appreciates the excellence of Homeplus, awarding it the only Grand Prix in the Media category – out of 2,800 entrants from TV, radio, online, outdoor and mobile. Due to the number of mobile-related campaigns in 2011, the organizers of Cannes are considering starting a dedicated mobile category in 2012. And, we hope that Homeplus is the yard stick by which ad agencies approach mobile this year.

Video case study: Homeplus Subway Virtual Store.

Related materials
• 2011 mobile winners at Cannes, with video case studies
• Profile of Pontomobi
• Five-minute interview: Tom Eslinger, Saatchi & Saatchi Worldwide

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