Apple IOS5 And The Power Of The Push

Today, we expect that Apple will offer more insight into its new “Notifications Center” that will be baked into iOS5. We expect a lot more app developers will want to get smart about the best way to incorporate push notifications into their app, and so I wrote up some thoughts for our friends over at Adotas. Please feel free to share it around and we’d really like to see other thoughts and ideas in the comments if you have them.

Apple iOS5 And The Power Of The Push

Push notifications are about to really take off, and make a lot more sense. That is the power of Apple. But what will happen first?

The medium will gain momentum with the debut Apple’s iOS5, because the system’s new notification center makes push messaging more consumer friendly on iOS devices. Next, I think the real value of push notifications will become glaringly apparent as businesses realize its ability to get customers actively engaged with mobile content and applications.

This is also an enormous, and welcomed, shift for developers. It gives them another mechanism and medium for driving customers to interact with their brand while creating additional touchpoints, or engagement, with those customers. This is the new holy grail for mobile.

A Growing Push for Businesses

The expanding market for push notifications is timely and reflects its increasing relevance to businesses. The industry has learned that obsession with driving downloads is ineffective as a long-term strategy: Despite the money invested in developing mobile applications, only about 5% of mobile apps are used 30 days after they’re downloaded by customers.

Focusing on downloads is also becoming passé: It’s akin to the first waves of web marketing, when driving page views was the goal. In today’s mobile environment, businesses want people actively engaging, better yet, spending money while they’re at it. And do this on a continued basis, which is what success is all about.

Push notifications serve these business objectives because they can reach mobile customers, stimulate interactions with them, even if they are not using the app or their device at the time. Customers are responding. For example, according to a recent study by comScore, 14% of consumers representing Groupon and LivingSocial users said they engage with the app after receiving an offer sent via push notification to their phones. This is not surprising and the engagement rates are certain to grow as push matures and businesses become more familiar with it.

Push works because it takes advantage of mobile as an intent-driven platform. It focuses on the customer’s reasons and motivations for using a device, such as shopping, following sports scores, or playing a game, and it creates conversations with the users around those activities. But it’s also about real-time social sharing of content, like music, pictures, and video.

In addition, when you consider that most devices now are location aware, messages in real time become even more compelling. Finally, apps can be designed to include rich media such as video, audio, maps or actionable content like coupons or voter polls to a message, which enriches the entire experience and strengthens the overall appeal.

Businesses like push notifications because they generate a wealth of metrics that can be used to analyze the success of their ads, get to know their customers better and create one to one relationships that are more effective. The technology can generate quantifiable statistics on many variables that indicate, among other things:

•    how often customers return to an app;

•    how much time they spend with it;

•    if they take an action requested by an ad;

•    if they unsubscribe; and

•    most important, how the app performs against others in its category.

A company will be able to tell, for example, if it is losing subscribers in a category that other firms are excelling in, and if this is the case, it can adjust its approach accordingly to better compete.

The SMS Angle

General trends in the mobile industry favor increased use of push notifications. For example, numerous research firms are projecting that app-to-device messaging will become a much more significant part of the SMS market.

A2P promotions delivered via push notifications should do even better than that. Push-based A2P notifications are easier to respond to, because the notification takes the customer straight to the app without requiring clicking through to a URL. The analytics that push notifications generate give it value that SMS can’t provide. And push is less costly and more valuable to brands, carriers and consumers than SMS.

Companies have of course embraced messaging via SMS because it can reach almost all handsets. But it is short-sighted to focus all of a company’s campaigns on SMS. It is not particularly easy to build programs and services around SMS, for one thing, but also the margins for SMS-based campaigns are razor-thin. SMS fees are assessed on a per-message basis, and depending on the type of message used and its destination, SMS messaging can cost an company up to 3 cents per message.

Push notifications, which travel over the mobile data network, are easier to build and distribute and as more and more mobile data networks are deployed around the world, the addressable market for push notifications will increase. Nor are push notifications limited to mobile. They can target any device that is connected to the Internet and the more screens the customer engages with, including connected TVs, set-top boxes and gaming platforms in the home, the more opportunity this will bring.

Finally, push services do not incur SMS fees and they can be purchased according to a variety of flexible pricing schemes that can be friendly to any business. Prices can be based strictly on the number of devices or the number of installed apps receiving the notifications, which can allow distribution of unlimited messages to those devices or apps.

So we look forward to seeing what Apple and iOS5 can do to bring more mobile innovation to the market, and are prepared to make that easy to take advantage of when designing and launching apps.

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