Branded iPhone apps too risky, say ad execs

Tue Mar 10 2009, 17:05 PM UTC

Ad execs are urging companies to avoid creating their own branded iPhone apps because they are too costly and come with a high risk of failure. Instead, firms should advertise around existing apps with established communities of users, experts claim.

The advice comes from a panel of digital advertising execs, which told delegates at the Financial Times Digital Media conference in London that only big companies with a range of their own content should attempt to make branded apps.

The advice is timely as the success of Apple’s App Store is prompting a number of firms to consider creating branded mobile apps. Companies hope to use the branded apps as marketing tools.

But mobile apps are costly to develop and competition is fierce, leading a number of speakers to identify a “Darwinism of apps” that will eliminate weaker players. Another problem is increasing apps’ reach beyond one device. According to Mike Parsons, managing director of UK ad firm Tribal DBB: “Building apps for all platforms is ... a huge negative in terms of deployment.”

Chris Cunningham, CEO of appssavvy, which sells ad space on apps for social media sites, says the race to build mobile apps parallels the growth of branded apps for social networks such as Facebook. According to Cunningham, 95% of branded Facebook apps fail within a year.

The panellists agreed that mobile advertising is a significant area of growth, but said marketers must not view branded apps as a “shiny new toy.”

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