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iPhone Apps--No Longer Just For Productivity and Fun--Now a Real, Viable Marketing Platform

When the iPhone launched two years ago, the media (and pretty much everyone else) called it a game-changer among mobile devices. But the potential impact on advertising dollars and how they are spent is swiftly becoming the larger story. The Wall Street Journal reports industry execs expect the iPhone to push overall mobile-ad spending to $200 million this year (doubling last year's $100 million), excluding search ads and ads sent via text. Remove search and text, and essentially apps are where the money is, at least if you're Madison Avenue. But will disruptive marketing energize mobile advertising or simply annoy users to the point of avoiding some apps altogether?

Several companies are now offering ads thinly disguised as apps (what iPhone user doesn't have the Virtual Zippo Lighter?) that go beyond a simple brand message by adding some kind of amusing function. Burger King launched a full-screen, interactive Valentine's-themed ad in February that had a mini-game embedded, and users interacted with the ad 14% of the time, compared with the average 1% for a Web banner ad. CKE Restaurants Inc., owner of Hardee's fast-food chain, recently launched a similarly scrumptious iBurger application; users can take virtual bites from an on-screen burger by making lip-smacking sounds into the iPhone's mic.

While apps are a relatively cheap medium—CKE said it spent only $12,000 to create iBurger—finding a niche among tens of thousands of available apps presents a challenge. But companies are now hitching their brands to already-rising stars, a win-win for marketers and app developers. Lionsgate Entertainment recently bought the rights to a popular app called Stun-o-matic and hired media-strategy firm Initiative to retool the game to tie in with the release of Crank: High Voltage. The result: 2 million downloads and 800,000 trailer views from an app that took less than a month to redesign.

But while marketers have taken advantage of the iPhone's touchscreen and video streaming capabilities, other facets of the phone have yet to be exploited to a large degree (location function, motion sensor, etc.) NYC-based Medialets has crafted the first-ever "shakeable" ad for Levi's Dockers, taking advantage of the iPhone's gyro to set an ad in motion (in this case, to set a model into fits of breakdancing) when the user shakes the device. Silicon Alley Insider reports these "disruptive multimedia" ads can fetch a premium rate of $20-30 CPM (cost per 1,000 impressions) because of their high-degree of interaction with the viewer.

Medialets just closed a $4 million dollar financing deal to help it expand its platform, which not only helps its clients deploy ads on next-gen mobile devices but also provides analytics that help customers track users' behaviors. With Apple's App Store rolling out 5,000 new apps each month and Google's Android mobile OS expected to grow 900% this year, there's no question the growing smartphone market is a ripe target for marketers. The lingering question is, how many ads can one shake (or smack at) before the novelty wears off? Dockers' "shakeable" ad and Hardee's iBurger both debuted at the end of April, too recently for the advertisers to extract meaningful data regarding their effectiveness. Certainly full-page interactive ads embedded within games (or in the case of the iBurger, ads that are games) will grab viewers' attention. But can they hold it?

[Via Walls Street Journal, Silicon Alley Insider]

Related: Android Smartphone Sales Predicted to Explode: 900% Growth in '09
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