So, what’s with the apps arms race?
By now everyone knows that mobile is the new desktop and then some. People sleep with their smartphones, pee with their smartphones and date with their smartphones. Smart marketers know to go where the people are, and so do the tech giants. Tools that assist with navigation, recommendations, organization, and news reading are ripe for everyday adoption, and once users make them a habit (this is where engagement and loyalty-building marketing tactics matter), that’s when advertising is the most effective. Facebook waited over a year before introducing advertising into the Instagram mix, and even now remains cautious about allowing full-on access, keeping its advertising partners to a small list (most notably, adidas, General Electric, Macy’s, PayPal and Michael Kors).
There are a few parallels between startup acquisition and mobile advertising, namely:
- Culture fit. Startups are all about dynamic personality and intense drive. When a large company eats a small one, there are often clashes of philosophy.
Correlation: When you advertise to a new social media channel, you have to take your audience into account. Are you interrupting their day with content that doesn’t fit their lives and interests, or adding value to their mobile experience?
- Brand integrity. When Facebook acquired Oculus VR, the Internet freaked out, fearing the company would lose its identity.
Correlation: Mobile advertising isn’t just about how your brand appears on the surface; it’s about communicating your company’s values — not only what you do, but why you do it. Consumers, especially millennials, have been shown to respond more positively to products with a social purpose.
- Targeting. Major media companies acquire apps to gain and market to audiences they might not have been able to reach on their own.
Correlation: Instagram’s addition of sponsored content means brands can use parent company Facebook’s information on user interests and behavior to inform and optimize ad campaigns. Targeting users with relevant ads = happier users, happier users = higher ROI, and higher ROI = happier advertisers.