New research shows that tablet computer owners buy and use more functional apps to help them with business and finance than they do gaming and social apps. They are also likely to use their devices at the same time as they watch TV.
Tablet computer owners are more inclined to use functional, rather than social apps, on their devices. Checking out friends’ photos or status and ‘liking’ other people’s actions are almost an addiction for some people, but Facebook is not the app that is used most frequently on tablet computers, according to research seen exclusively by Marketing Week.
Business, finance and entertainment apps are used every day by about 60% of tablet owners, whereas only 32% check social networking sites on a daily basis, according to a study by Lightspeed Research.
Although Facebook makes it into Lightspeed’s list of favourite apps, Angry Birds comes out on top, with 64% of tablet owners playing the game every day. The Kindle reading app is third-favourite, with 46% of respondents saying they read books on their iPad or another brand of tablet computer every day.
For Ralph Risk, marketing director at Lightspeed Research, the use of the Kindle app is a sign of things to come. “People sometimes find themselves with too many devices. They might have their own mobile phone, a work phone and a tablet or an ereader. So maybe having them all on one device - where you can read a book, do your social networking and play games - will become more pleasant and desirable for them,” he says.
“This research does not include dedicated ereaders. People are now accessing the Amazon store and getting books on [other] devices. Amazon is quite clever at understanding that [demand], whereas some other providers haven’t allowed open access yet.”
But not everyone owns all these devices, which is why Penguin has created different versions of Stephen Fry’s latest book, including an iPhone app called MyFry, to work in different ways depending on whether it is being read in print or on a smartphone, tablet or ereader.
Anna Rafferty, managing director of Penguin Digital, explains: “We fragmented the text into segments that were tagged, and then made a ‘data visualisation’ in the form of a flower that people could navigate.
“That is a small-screen experience of the book, specifically for the iPhone, not the iPad. With the app, we had to create a specific reason why someone might want it, such as when you are standing on the tube for five minutes and want to read something funny.” (See the Frontline, below.)
Penguin has also published the book via ereader and created an enhanced version for that platform, where Fry narrates the stories behind some of the photos in it.
When it comes to smartphones, Sky, eBay and the BBC join Angry Birds and Facebook in the list of owners’ favourite apps. And it is not just younger consumers who download gaming and social apps. While 83% of 18to 34-year-olds have both of these types of app on their phones, nearly 60% of those aged 55-64 also have them.
News apps are popular with all age groups, with about 55% of the 1,000 responding to the survey downloading them to their phones. What stands out is that finance and banking apps are more popular with younger consumers - 36% of people aged 34 or younger have them on their phones, compared with 28% of those aged 35 and over.
Risk says this might be because younger people are more trusting of financial services in the digital world in general. “This shows that the technology is crossing the existing stereotypes of financial products and younger people are quite willing and accepting of these and use them more. For the older generation, it is not just about the app working, but also being sure that it is secure. There is an educational role there.”
Another phenomenon for marketers to consider is the number of people who are using apps on their tablet or smartphone while watching TV. About a third of tablet owners say they are less likely to be concentrating on what is on TV while they are using apps.
“That is a challenge, certainly for advertisers on TV or any media, in trying to get people’s attention. We already have the challenge of people skipping through adverts,” says Risk.
“Even if they are watching live TV, they might be tweeting about the programme or other things and brands need to consider how to grab their attention.”
But the good news for marketers is that device owners are willing to pay for apps, with 20% of iPad owners spending more than £30 on apps in the past six months. Smaller payments are more popular among smartphone owners, with about a third spending more than £3 on a single app.
“It’s quite an interesting model for marketers - how they get people to commit to brands or make money through apps,” says Risk.
This is an objective that Penguin considers when designing apps. Those that are free are likely to offer sample chapters, which might encourage later purchase of the whole book.
Risk adds: “Do they have to provide free apps and use advertising around them, or encourage in-game purchases, for example? The research shows that people with Android phones are more likely to download an app that is free to start with. So maybe that helps the brand to gain awareness and engagement, rather than just straight purchasing.”
Consumers’ appetite for useful apps is strong and it is worth bearing in mind that apps are not just for casual gamers and those who want to catch up with friends via social networks. There is plenty of scope to make money from apps that will help to make life easier.
56% of tablet computer owners access business and finance apps daily
55% of smartphone users across all age groups use news apps
32% of tablet owners use apps to check in to social networks every day
83% of 18to 34-year-old smartphone users have gaming and social apps on their device
We ask marketers on the frontline whether our ‘trends’ research matches their experience on the ground
Anna Rafferty, managing director, Penguin Digital
In terms of pricing our apps, we are still experimenting. Apps are a completely different market and pricing has been more aggressively downwards because of free apps in the market, which is why this research is interesting. It is good to have it confirmed that people are prepared to pay for something on an iPad, for example.
We don’t charge for all our apps. The Land of Me (a children’s create-your-own-story adventure) is free, and was nominated for a BAFTA last year. Percy Jackson, a range of books for 9to 12-year-olds, is a sampler app, where young people get access to a sample of each of those books.
The child-to-adult ratio of our apps is about 70-30, but that wasn’t necessarily a strategic decision - it is about what we decided to do first. So we have apps for Peter Rabbit, Jamie Oliver, Ladybird, Moshi Monsters and Peppa Pig, for example.
Spot Goes to School has been in print for 30 years, but the Spot app takes the book and amplifies it for the digital experience. For example, children can now make Spot play the piano or tidy up the nature table.
Darryl Bowman, head of marketing, Wonga
One thing that jumps out in this research is that use of finance apps seems more frequent than the overall average.
Good gaming and social apps are a bit of a no-brainer - if they are fun, they will engage people. For financial companies, it is clearly about providing a utility that actually lends itself well to mobile.
Wonga has an app because its customers want flexibility, simplicity and transparency around how they deal with financial companies and they are very used to dealing with mobile.
Our apps are free because they are an additional utility for customers, who like the flexibility we provide. Over the next few years, the use of mobile is going to increase, so it is really important that we invest in making sure customers can use the service as and when they need it.
Mobile certainly seems to be more readily adopted by a slightly younger audience and we are working on making sure the older audience also see the benefits of mobile when they are more concerned about security and responsibility.
Chris McManus, group manager, customer relations, Highways Agency
I agree with the research that the device market is changing rapidly. We started off with an iPhone traffic information app and there is no doubt that Android now dominates.
The app probably makes up about 15% of our total traffic information uptake and has about 550,000 users a month. We get about 850,000 people on our website each month.
We don’t collect demographics from the app, but we knew from our research that we should aim this primarily at the business market because those people need to be at meetings on time, for example. We also have some students using it, so it is relevant at both ends of the spectrum.
Instead of developing apps for iPhone, BlackBerry and all the other devices, our approach led us to redesign our website and make it almost an app-style format [for any device]. That means we are not managing multiplatform apps.
James Frost, marketing director, Nectar
Nectar has generally been a brand for families, but we are finding that the app delivers much younger users.
Two-thirds of our cardholders are female, but users of the app tend to be more evenly split. That is quite a benefit because one of the big questions for loyalty programmes is how to engage a new generation of customers. We have seen that apps are a really good tool for that.
The main thing the app does is send people money-off vouchers. Instead of just posting out personalised coupons, we can now send them to cardholders’ smartphones.
For our clients, such as Homebase, Sainsbury’s and BP, we can help to deliver new customers. If they want to reward loyalty, for example, we will give different types of offers. They can then send those offers to points collectors to try to influence their purchasing behaviour.
People can browse through the coupons and click ‘I want it’. Then, when they go into Sainsbury’s and swipe their Nectar card, we know that they have undertaken that transaction and opted into that offer. There is no need to scan barcodes at the till.
We are exploring ways of making the offers more interactive than just being a coupon, so that cardholders might see a product and there might be an embedded video linked to the product.
Gary Kakoulli, digital development manager for EMEA, Financial Times
Our app [for iPhone, iPad and Android] has about 340,000 unique users per month, but the fact that it is on 200,000 smartphones and 200,000 tablets shows there are a number of people who have both devices and access the app depending on whether they are standing up or sitting down.
We know from our data that about 37% of our iPad audience are C-level executives. We developed the app ourselves as we needed to retain the one-to-one relationship with our audience. To lose that to Apple would not have been acceptable to us.
It is a paid-for app, and we run advertising on it, using the same ad-serving technology for iPad and iPhone as we do for our desktop FT.com site, so we are able to report to advertisers how many ads have been seen and clicked on.
We will potentially roll it out to Kindle Fire and BlackBerry this year. We are constantly trying to evolve in the mobile space.
This research is the kind of thing I see every day and sometimes there are conflicting sources. Nielsen, for example, recently said that iPads are more effective for advertising than smartphones, but then I will read something else that says the opposite. There is certainly a huge amount going on.