Posts Tagged ‘luxury marketing’
By Mike Truskowski
The honeymoon of the mobile application industry is over. The fight for users – and the challenge of building a sustainable flow of money from them – has arrived. And it will only get tougher.
Raise your hand if you have a smartphone. Now think about your friends, family and colleagues. More hands up, right?
The popularity of these devices has ballooned from 9 percent of mobile phone sales in 2009 to a projected 50 percent by 2013, according to Gartner.
Hardware manufacturers and service providers are having a great time trading up their users to higher-margin handsets and contracts.
But perhaps the greatest untapped opportunity afforded by the smartphone revolution belongs to a third party: the providers of mobile apps and mobile content.
In the balance
With only one small screen to navigate, the mobile user is a captive audience. However, as the number of competing platforms, channels and applications grows, and the fight for consumers’ attention intensifies, turning a mobile app into a sustainable, profitable venture will become increasingly difficult.
Will ad revenues alone be enough for app backers to achieve this sustainability?
For apps built around the freemium model, how will developers know and establish the right balance between paid and ad-supported users?
Where firms do decide to charge for their software, content and other features, what will the most successful pricing models look like?
Those are just a few of the fundamental questions facing someone who wants to make money with apps.
In 2001, our firm explored the challenges of selling content online. Back then, those who were brave enough to put a price tag on their offering based their decisions more on “gut feeling and guesswork than hard data.”
Mobile is introducing greater complexity than marketers have seen, faster than they are ready to handle it.
While the “mobile media matrix” is not as sinister as the matrix of film legend, I predict it will become a disruptive enemy of businesses that do not choose to be its friend.
Luxury brands know better than anyone that affluent consumers are highly particular about the things that they purchase.
Whether it is this season’s new Christian Louboutin pumps or that straight-off-the-showroom-floor M Series BMW, affluent customers usually know exactly what they want. The same can be said for the ways in which they shop.
As early adopters who place value in being among the first to have a coveted item, affluent U.S. consumers are more likely to carry a smartphone or tablet.
When historians look back on this commercial and cultural period, they will likely describe it as a time when the barriers between the physical and digital experience began to erode.
One of the hallmarks of this period will be the blurring of the lines between marketing channels, and the convergence and evolution into something new.
Today, location awareness and mobility have added context to even the most ordinary actions, while social media and the mobile Web have added a layer of immediate human connection to seemingly straightforward commercial transactions.