Mobile, Apps, and QR codes

There is no doubt that Mobile Marketing is where the coming action will be.  Just look at the billions of dollars invested by Google, Bing, Apple, AT&T and others. These giants are supremely confident on the forthcoming rise of mobile in the Internet space.  Google has recently shared some insight as to the rapid growth in mobile search, and we’re seeing some substantial increases in visitor traffic to dealers’ mobile sites.  This all indicates, without any naysayers, that mobile will be a very high growth area in digital marketing over the next couple of years.  While all agree that mobile will grow dramatically, there are a number of elements in mobile marketing that are still open for some debate.

iPhone from AppleThere is much buzz in the automotive industry around Apps and QR codes, and there is room for some serious discussions around consumer use, benefits, and returns. Apps are all the rage and everyone wants one, but to do what exactly?  Shop for a car?  Well this might be an app that a consumer would use, but for how long?  Does it offer any more benefit to the consumer than a well-designed mobile site?   If an App does provide functionality over the long term, will it deliver ROI to the dealership?  Today smart phones only comprise around 30% of all web enabled phones.  Also, in developing an app, you’ll need to develop it for a number of operating systems to make sure that you maximize your penetration in the 30% of smart phone users because according to Nielsen, as of December 2010, the iPhone made up only 8.28% of the web capable mobile devices.

According to a post on appmuse.com, the cost range of developing “small apps” is $3,000 to $8,000.   You can go cheaper, but then you’re giving up functionality and consumer appeal, which will hurt adoption and use.  There will also be additional development costs for an app to work on all smart phone operating systems.  And while there are agencies that charge lower upfront app development prices, they make up for it by re-occurring monthly fees.  Not to mention that a large percentage of apps are downloaded but not used.

According to a post on ReadWriteMobile about the use of mobile apps, 26% of Mobile Apps are downloaded and used just once at the initial download.  The good news is that 74% of Apps are used at least once more after initial download, but is that really what you are looking for when you go to the trouble and expense of creating an App?  It gets worse, according to Scott Kvelon of Urban Airship, there is only a 5% retention rate on free apps after 30 days.  This means that 95% of the people who download a free app stop using it after 30 days.  This is such a commonplace occurrence that Apple has reacted to it and has reportedly changed its App ranking algorithm on iTunes to take App use and reviews into heavier consideration over download rates for App ranking purposes.  Google recently published stats from a mobile study where 79% of mobile users surveyed claimed to prefer a mobile browser to a mobile app for product reviews, and 81% preferred mobile browser over apps for researching prices.  These facts indicate that it is not a good idea to rush out and build an App, especially when quite a bit, if not all, of the same functionality can be done with a mobile site.

QR Codes are another item getting a lot of push by vendors.  But the same questions persist for QR Codes.  What functionality do they deliver and will consumers continue to use them?  Right now they are a novelty and consumers like the idea of testing them, but does that have long term play?  In order to use a QR Code, a consumer must have a smart phone and a QR App, and we’re back to those 30% of smart phone users. They have to open the App and then click on the QR Code.  In many instances, the same functionality of a QR Code can be done with simple short and go codes (text marketing), and better yet, it will work with all web enabled phones, not just smart phones.

AGBeat has a great post about potential issues arising for QR Codes, and one of their items is Google Goggles, which is a very interesting alternative. Finally, while QR Codes are relatively new here in the United States, they have been used in practice in Japan since 1994, and they are seemingly posted on everything and everywhere.  But, according to a study by NetAsia Research done in 2009, 76% of Japanese know they have the ability to access QR Codes, however the average user scans per week for those surveyed was only 1.24 times.

I am not suggesting that QR Codes and Apps are generally bad.  Like anything, they are tools and have their place.  I am suggesting though that before you go out and spend a sizable amount of money on them you should ask yourself “Can I get this functionality from something else? Is this the best tool for the job?  What will the return be?”

For further reading, there is an excellent article on Hype Cycles, which speaks directly to the hype phase of QR Codes.