Brands, in association with mobile internet service providers, can use the growing ‘app’ culture to connect with their target audience, says this article.
India is a broadband deprived country, going by the low penetration of services in the country. There are about 20 million broadband subscriptions and over 100 million internet users, of which 40 per cent come from mobile internet users.
With third generation mobile services, or 3G, now launched in the country, there is a certain amount of excitement, hype and curiosity surrounding how the user experience will change. Reactions are mixed mostly because the networks are still evolving to a robustness that can deliver high-speed internet to hundreds of millions of people.
In markets where 3G services have matured, we have seen a strong uptake of both smartphones and heavy usage of applications (apps). There are all kinds of data but one thing is overwhelmingly common: An appetite for apps cuts across age, gender and social strata. These apps range from entertainment to utilities to games to maps etc in well over 20 categories. About 60 per cent of the half a million-odd apps are free and the overall downloads number in billions. Since these apps have become a consumer habit, brands have also invested in apps — yet, in a cluttered market their presence is not dominant.
In India, we are at the cusp of something special. A culture of apps and high-speed internet access on phones is only starting to evolve. One cannot deny that mobile telephony is one of the few modern infrastructures that work well in a country that is splitting at its seams. But the moot point is, how dependent are we on the phone for our business, social and entertainment needs?
At this juncture, brands in India can play a huge part in driving an ecosytem that is nascent. In this time and age, brands want to continuously engage their customers or potential customers, as a happy customer often means a good bottom line. With an app, a brand can connect with its customer anytime, anywhere. For example, as a car owner, wouldn’t you want an app for your smartphone that gives you a list of fuel stations on your route? I would. What this means is that a brand now has a channel to engage with its customers or potential customers by adding value through simplicity and fun.
A brand can aim at its target group with a category that would be most relevant based on demographic interests. For an FMCG brand targeting the youth, it could just be a jukebox app with a music collection that can be updated as and when a new release is available. An app never dies once it starts residing in a device, unless deleted. This gives a brand the capability to offer downloads or updates to refresh it.
How does the economics work? Today 3G data tariffs are at about Rs 100 per 100MB (megabyte) or Rs 1 per MB at its peak level. For higher data packages, the cost per MB is much lower. A reasonable app that can make an impact will be about 5MB. There are apps that consume as high as 30MB too. So the affordability quotient is high relative to its relevance. In India, with an app culture yet to concretise, a brand can partner with a 3G service provider who is the custodian of this target group. Based on commercial handshakes, brands can offer free apps and pay a hypothetical introductory fee of about Rs 1/download to the operator. If an app production cost is, say, Rs 20 lakh and 5 million downloads are given away at Rs 1/download, then you have a cost structure of Rs 1.4 per person for a total spend of Rs 70 lakh. This is not counting the additional downloads that will get triggered by word of mouth and paid for by the consumer directly. This touch-point is not fleeting like a web banner or a TV ad but embedded in the most important tool of our daily lives.
Today 3G penetration has only touched the tip of the iceberg. Smartphone adoption is rising. However, the app ecosystem is still untapped with respect to the 3G potential. In India, consumers generally look forward to something free. Brands, with their huge marketing budgets, are in a unique position to take charge. For brands to dominate the app mindshare and command a good share of all the app categories, they need to lead the ecosystem. For 3G service providers who want their subscribers to adopt an app culture, collaboration between a brand and the 3G ecosystem is a win-win idea. The consumers who need an added buzz on their phone will be the ultimate winners.
The author is director, marketing & strategy, Ericsson India