Killer apps – the promises and pitfalls of a smarter world

11 July 2011

• Less than 1% of apps published by global consumer and healthcare brands were downloaded more than a million times.
• Apps using location information through a portability function^[1] (81%) were most likely to be downloaded.
• 45% of consumers with a smartphone download an app at least once a week.

Deloitte, the business advisory firm, predicts that brands will find it even more challenging to ensure their mobile applications (apps) stand out to consumers. Deloitte’s research found that less than 1% of apps published by a selection of global consumer and healthcare brands were downloaded more than a million times and only 20% of the apps were downloaded enough times to appear in Deloitte’s analysis ^[2]. The rapid proliferation of apps has lead to increasingly discerning consumers, as app stores become more popular and users become more mature.

Deloitte's research into mobile consumption found huge appetite for apps with 45% of smartphone users downloading an app at least once a week ^[3].

Deloitte’s analysis shows that the most effective way to cut through the crowded apps market is to make best use of the smartphone technology.

Apps that used the following functions were far more likely to be downloaded:

• Portability– 81%
• Accelerometer ^[4] – 77%
• Sophisticated touch screen use – 61%
• Location-based services ^[5] – 61%
• Camera – 59%

Howard Davies, Deloitte media partner said: “The app market has some way to go before it rivals TV or the web for penetration, but it is of growing importance for brands. Brands view apps as a golden opportunity to communicate directly with consumers and in a more meaningful, long term manner. When brands get it right, the returns can be huge.”

Emergence of location data and targeted advertising
The integration of app functionality and platform features will dominate the next phase of app development by advertisers and brands.

Howard Davies concludes: “Location data is important for the evolution of the app market. If data gathered locally could be exchanged with data from the cloud, whether about location, environment and motion or specific to that individual, then targeted advertising could be developed and this would help brands to make money from their apps.

“Consumers need to see the benefits of receiving more personalised advertising on their smartphones, devices that have previously been advert free. They also need to consent to let their personal data to be used in this manner. Likewise, brands need to co-operate with traditional advertising vendors, companies with similar ambitions in other industries or even competitors. At the moment the feed of data from handsets to media planners is still inconsistent across operators and platforms and as a result, difficult to use on any scale by advertisers. This will need to be resolved in order for brands to make the most from apps.”

The cost of developing for different platforms
Deciding which platform to place your app on is important, the synergies generated by developing apps for multiple platforms are relatively insignificant. Deloitte estimates that the cost of developing the same application for two platforms is 160% of the cost of developing for one.

Ends

Note to editors
^[1] The shrinking size of hardware means that mobile devices can be carried around easily, enabling consumers to use and interact with them in increasingly innovative ways. For example, Petcentric from Purina/Nestle – relies on the portability of the smartphone (and location based services) to find pet-related places, whilst customers are out and about, whether vets, parks, pet stores etc. Another example is Pepsi Loot from Pepsi - where consumers are rewarded with music downloads for visiting Pepsi outlets. This app also relies on both portability and location-based services.

^[2] More than a thousand times.

^[3] Deloitte’s “Addicted to Connectivity” survey of 31,000 global mobile users.

^[4] The accelerometer is a built-in electronic component that measures tilt and motion. It is also capable of detecting rotation and motion gestures such as swinging or shaking. Two examples are MGD Pedometer 64 from Miller Genuine Draft (SABMiller) – pedometer app released to promote fitness/exercise – the accelerometer is used to count the user’s steps. Latin Recipe Shaker from Carnation (Nestle) – recipe app, where users shake the device to choose a recipe at random

^[5] Location-based apps, please note that these also rely on portability. Three examples include:

Tesco finder (from Tesco) – the app allows you to find your nearest Tesco store anywhere in the UK and will direct users to any product on any shelf.

iFood Assistant (from KRAFT) – similar to Tesco finder – a recipe app that directs users to their nearest grocery store, and shows which aisles to go to (US and Canada only).

Petcentric app from Purina (Nestle) – uses location based services to find pet-related places, whilst customers are out and about, whether vets, parks, pet stores etc.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities.

Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited

Last Updated: