iTunes Radio: music to advertisers ears?

Today’s announcement that Apple will launch a streaming music service, called iTunes Radio, could be music to the ears of advertisers everywhere. The free, internet radio service will be ad supported, giving advertisers access to a huge potential audience among the roughly 400 million active iTunes accounts.

Before now, Apple’s foray into advertising (from a publisher perspective) has been limited, most notably comprising iAds, its platform for rich-media display advertising on iPhone and iPad.

The new music streaming platform will feature music stations that are curated by Apple, stations that are genre-focused, as well as personalised curation for users based on the music they play and download with iTunes.

However, there is no word yet on whether Apple will open up the vast stores of data that allows it to customise user experience for use by advertisers, although the demand and potential value of doing so must be significant.

The iTunes Radio service will be available ad-free for customers of Apple’s cloud-based  iTunes Match service, there will also be ‘first listen’ premieres, and ‘voice intelligence assistant’ Siri will also feature on the new service. iTunes Radio is set to be released in the US in September, with no notice on launches in further markets as yet.

iTunes Radio was announced on Monday (US time) at Apple’s Worldwide Developer Conference, during which it also announced a raft of updates to its hardware and software offerings, including the next versions of its desktop and mobile operating systems. If you’re into that kind of thing, Marketing‘s sister title Macworld Australia has the coverage.

 

ABC iview becomes child minder as mobile viewership overtakes web

Viewership of ABC’s catch up TV service, iview, via mobile devices has overtaking viewing via PCs and laptops, driven it appears by the use of portable devices as a child minding tool.

Last week, iview streaming on iOS devices, including iPads, iPhones and iPods, represented 45.2% of total iview plays, while the iview website accounted for 45.1%, according to data from Webtrends. Children’s content contributed to the huge growth in popularity of mobile viewership, accounting for 15 of the top 20 programs viewed via iOS.

Despite the trend toward tablets and smartphones, the website recorded its highest ever month of visitation in September, with 1.1 million visitors and 4.1 million visits. In total, more than 11.7 million program were played via the system by Australian audiences in September across smartphones tablets, computers, connected TVs and gaming consoles.

Arul Baskaran Controller Multiplatform ABC TV revealed plans to extend the service, commenting, “We look forward to enabling the service on more devices in the future.”

“We continue to evolve iview to best serve our audience and respond to shifts in how Australians use technology,” Baskaran says.

ABC iview’s iOS app for iPad and iPhone, has been downloaded 1.8 million times to date.

Videographic: Apple by the numbers, after closing at record market high

Apple has become the most valuable public company of all time.

The company’s stock closed at US$665.15 overnight, an all-time high, putting its market value at US$624 billion.

The value exceeded a previous record set by Microsoft of US$620.58 billion in 1999, according to data provided by S&P Dow Jones Indices.

Take a look at this ‘videographic’ created by Wyzowl, from Sortable’s infographic published earlier this year by our sister site Macworld.

Apple’s new Mac operating system aggressively pursues Chinese market

Apple has signalled a desire to encourage the exploding number of Chinese Mac users by including some significant China-specific features in its upcoming desktop operating system dubbed ‘Mountain Lion’, news of which broke late last week with an official announcement on Thursday (US time).

Along with a number of features that will continue to narrow the gap between Apple’s desktop/laptop operating system (OS X) and that for its mobile devices (iOS) comes system-wide, built-in support for popular Chinese email services QQ, 163 and 126, social networks Sina weibo, Youku and Tudou, and search engine Baidu, the country’s top-ranking website and fifth globally.

Apple’s Mountain Lion preview page lists 11 highlights of the upcoming operating system, the last of which is ‘All new features for China’. From Thursday’s release:

“Mountain Lion also has features specifically designed to support Chinese users, including significant enhancements to the Chinese input method and the option to select Baidu search in Safari. Mountain Lion makes it easy to set up Contacts, Mail and Calendar with top email service providers QQ, 126 and 163. Chinese users can also upload video via Share Sheets directly to leading video websites Youku and Tudou, and system-wide support for Sina weibo makes microblogging easy.”

Apple CEO, Tim Cook, says that even with the success of the company’s mobile devices outshining that of the Mac in terms of sales, it is still ‘incredibly important’, especially in markets such as China, where Mac sales doubled last year: ”They love the iPhone and so they then search out and look for the Mac,” Cook told The Wall Street Journal, in an apparent acknowledgement of what analysts have dubbed the ‘halo effect’, where the popularity of the iPhone, iPad and iPod attracts new users to Apple’s desktop PCs.

On a related note, the announcement of Mountain Lion came as a surprise to many in the tech press as Apple, usually the subject of countless rumours around upcoming product launches (type ‘iPad 3′ into any web search), managed to keep this announcement quiet up until its official release on Thursday.


The future of retail

This feature first appeared in the August 2011 issue of Marketing magazine.

 

If you believe the naysayers, the Australian retail industry is hiding under shadows of doom and gloom, but the reality is that sales are booming, just not in the places we used to look. In this special feature Matt Granfield chats to some of the biggest names in the business and discovers the future of retail might well be clicks not bricks.

People are spending more than they ever have before. Despite the global financial crisis, despite the negative news stories, people are reaching into their wallets and purses and pulling out more money than they used to. People are earning more, Australia’s population is growing and retail spending is rising.

Exactly how much retail spending is rising is a matter of debate. Ask the Australian Retailers Association (ARA) about the economic outlook and they’ll paint you a picture of doom and gloom. Bricks and mortar stores are indeed doing it tough. Last Christmas, retail sales were only 2.1 percent better than they were in 2009, but department store sales actually fell by 0.5 percent. When you consider the cost of everything (the inflation rate) went up by about three percent, that’s not good news.

In its August 2010 ‘Consumer Spending Confidence’ report, the ARA found that only one in four respondents (26 percent) believed the coming 12 months would see better financial times ahead for Australia. The majority (61 percent) were uncertain and believed that there would be good and bad times ahead. One in 10 respondents anticipated bad times ahead for Australia financially. One in five (22 percent) respondents believed that now was a good time to spend, while an equal amount (21 percent) believed it to be a bad time.

At best, it could be argued that the future of retail is uncertain. But that’s only half the story.

The amount of money flowing through the economy is watched carefully by the Reserve Bank of Australia and when it wants a clear picture of what’s really going on, one of the most reliable sources of data is the dollar value of what people are putting on their credit cards. If you look at credit card spending since 2005, the figures are remarkably more upbeat.

In fact, every year, for the last six years, people who walk into shops and pay for things with credit cards have spent nine percent more than they did the year before. The inflation rate is about three percent – so by those figures retail spending, at least on credit cards, is growing at a yearly rate of about six percent.

What’s even more interesting is the fact that the value of online purchases has grown at an average of 15 percent a year in the same period. When you factor in inflation, online spending in Australia is growing at exactly double the rate of traditional retail spending.

In short, and according to the nation’s central bank, “The data on domestic spending show rapid growth in online purchases over recent years.” But we’re not just spending more money in Australia, we’re also spending more overseas, and eBay and Amazon account for a huge chunk of those dollars.

Since 2005, the total number of items delivered through the Australia Post network has increased at an average annual rate of around 10 percent, in contrast to an average annual decline of one percent in the total number of domestic and outbound postage flows. In its February 2011 ‘Statement on Monetary Policy’, the Reserve Bank of Australia was unambiguous about what’s going on, stating, “There has also been a steady increase over a number of years in the number of Google searches for ‘Amazon’ and ‘eBay US’, with the number of such searches increasing significantly in the second half of 2010, as the Australian dollar appreciated against the US dollar.”

Ask the futurists and they’re also clear on where online sales are heading. Forrester Research predicts Australian online retail sales will more than double from $16.9 billion in 2009 to $33.3 billion in 2015. Senior analyst Steven Noble cites consumer demand, increased supply and better technology as contributing factors.

“At its core, the development of online retail in Australia requires two factors: increasing consumer demand and retailers that are increasingly able to supply. Australia has both,” says Noble.

“The Federal Government plans to make gigabit broadband available to 93 percent of households, up from almost none in December 2009. And even without this investment, Australian consumers have signalled their willingness to shop online.”

PayPal, which in 2010 processed $92 billion worth of payments (18 percent of global ecommerce) – certainly wouldn’t disagree.

PayPal Australia’s managing director, Frerk-Malte Feller, reckons that getting online isn’t just something retailers should get around to eventually; it’s something they need to do quick smart or they simply won’t be competitive.

“Over eight million Australian consumers now use the internet to make purchases and this, coupled with global consumers, makes the online marketplace a very exciting space to operate in,” he says.

“Operating online is no longer an option for Australian retailers and service providers, but an absolute necessity to gain the momentum they need to stay competitive in today’s changing consumer landscape.”

The times, if you hadn’t already noticed, are a changin’.

 

Who are the biggest online retailers in Australia?

So, which organisations are leading the charge into the bright new digital landscape? You’d think the household names in the traditional retail sector like Myer, David Jones and Harvey Norman would be at the forefront, right? Wrong.

In fact, of the top 15 most popular shopping websites in Australia, only one – Apple – has a physical retail presence. The rest are specialist online stores ranging from the massive (eBay and Amazon) to the relatively unheard of, like etsy.com, which sells handmade and vintage items to hipsters and has a higher visitor share than the Apple store.

Surprisingly, the biggest players in the Australian retail sector are all relative newcomers to the ecommerce game. In 2008, Gerry Harvey famously said that selling online was “a complete waste of time” and it’s taken until 2011 for the Harvey Norman Group to enter the space with a ‘one deal a day’ site called ‘Harvey Norman Big Buys’ (www.harveynormanbigbuys.com.au) and plans for a full online store any moment now.

David Jones set up an online store in 2000, but closed it when the dotcom boom crashed. It only came back online late in 2010 with a web-based version of its stock, although there are plenty of notable absences – you can’t buy an iPod or a suit online for example.

Without doubt the most interesting traditional newcomer to the ecommerce world has been Myer, which launched an offshore online store called myfind.com in March. The site is based in China and customers making purchases from myfind.com avoid paying GST, because it’s not an Australian business.

The site carries only a very limited amount of stock and cynics have accused Myer of using the site to make a point – that if the government doesn’t start charging GST on overseas goods and services bought online, then retailers will have no choice but to set up offshore businesses and there will be a decline in GST revenue for the coffers. Others have said Myer’s move is a sign of things to come – that the smartest way for retailers to compete in Australia will be to stop importing goods from overseas and putting them on shelves, when they could just be shipping products straight from warehouses in China.

Paul Downs, a former chief information officer of City Beach and now head of Hitworks, an ecommerce consultancy, says Myer’s move is a sign of things to come and that, even though the myfind.com store lacks features, the concept is on the right track.

“Myfind.com is a good idea, really badly executed. It’s not an easy site to shop on, it’s not optimised to increase the likelihood of someone buying something from a usability point of view,” says Downs. “But the concept of operating outside of Australia and shipping directly in is a great idea. I think it’s the future. Not just for Australian retailers, but for all retailers. If it’s all made in China, why not just make it, warehouse it somewhere as close as possible to the manufacturing plant to save on transport costs and then dispatch it to the customer from China? Myer doing that clearly makes a lot of sense.”

Research from the Australian Centre for Retail Studies (ACRS) indicates supply chain costs aren’t the only reason local retailers have to keep an eye on foreign shores. ACRS research fellow Sean Sands says research conducted in conjunction with Google and customer communications agency Salmat suggests that UK department stores pose the biggest threat to Australian retailers, followed closely by US retailers.

“Overseas retailers are definitely on the attack,” says Sands. “About 43 percent of local sales online are going offshore. My gut feeling is the penetration rate will be increasing in the next few years. They’ve got the stocks, the brands and the distribution systems in place.”

Sands says that, while Australia is a relatively small market, brands consider it lucrative, given the strength of the Australian dollar and cultural similarities to UK and US consumers, and that the big players in the Australian retail sector need to keep up. “It’s interesting because the innovation has been coming from the smaller players and the bigger guys have been lagging,” he says.

 

What’s working?

Which raises the question: if the big players are lagging behind in the ecommerce game, what then are the leaders doing so differently?

The answer comes down to four things – marketing, products, pricing and online customer experience.

eBay is in a class of its own, of course. The site has been around since 1995 and is so dominant it has few real competitors, at least in Australia and the US. You can buy almost anything you want on eBay and people make a living retailing in eBay stores. eBay has a 21.86 percent share of the shopping and classifieds category. Its marketing strategy covers every channel. It is a marketplace unto itself. But it’s the products and prices on eBay that give the site such an advantage – the auction model means they have more stuff cheaper than anyone else. There’s simply no point in competing with eBay in Australia.

Amazon.com too is proof that when one player is so dominant, competing is almost impossible. Borders and Angus and Robertson went bust in Australia this year because people weren’t buying enough books from them – meanwhile Amazon’s revenues continue to climb. In the US, where Amazon.com is a publicly listed company, the website, which began as a bookstore and now stocks virtually anything you can buy in a department store, has a larger market capitalisation than Target Corporation, Home Depot, Costco, Barnes and Noble, and Best Buy. The only traditional bricks and mortar retailer it isn’t bigger than is Walmart.

Downs says Amazon’s success is due in no small part to its brilliant user experience and its use of detailed user statistics to know what people are interested in buying.

“If I go to Amazon.com, it immediately presents me with products I’m interested in,” he says. “It’s been doing the ‘people who bought this also bought’ thing for years, but what it means is when I go to the site, I’m immediately presented with all these products I might like to buy, based on what I’ve bought before and what similar people to me have bought. Australian retailers just aren’t doing that. They might have a log-in, but they don’t do anything with it.

“The other thing Amazon is doing is tying social networks to give you personalised recommendations. It’s in beta testing at the moment, but what it’s going to do is instead of showing you recommendations based on your personal history, it’ll link in with your Facebook account to show you products your friends recently bought. It’ll also tie in ‘Likes’ on Facebook, so if someone buys a book on Amazon and goes on Facebook saying ‘this is brilliant’, that will be presented to you on Amazon.”

Talk to any expert about the future of online retailing and the words ‘Facebook’ and ‘social media’ will inevitably pop up sooner or later. The applications of these new communication channels are affecting every aspect of the ecommerce environment, none more so than marketing.

Australian electronics retailer Kogan recently launched above the line ads based on recent real-time social media feedback on its business. The TV commercials showed real Twitter and Facebook comments superimposed over images of happy customers receiving and using Kogan products. It’s not necessarily Cannes Lion-winning advertising, but when combined with the kind of direct-from-China prices Downs is talking about and an online store that is fully optimised around the user experience (see the breakout graphic), and designed to sell, it’s no wonder Kogan is the 15th fastest growing company in Australia (according to the 2010 BRW Fast 100 ranking).

While Kogan is making marketing industry headlines for using Facebook on television, there is another new wave of smaller specialist retailers making a big splash by effectively using Facebook as a content-rich catalogue. Scores of upstart new brands have discovered they can use Facebook ads to target fans of competitors and then use the channel to dribble out special deals and related editorial content to their new fans. The fashion industry has been a particularly savvy user of the channel.

Inspired by the success of blogs like The Sartorialist and LookBook, fashion retailers like Mr Porter and Princess Polly have built up hundreds of thousands of Facebook fans by consistently uploading interesting new content to their profiles and blogs – keeping front of mind in consumers heads and inviting fans to ‘shop the story’.

Mr Porter, for example, will run a feature article on the style of Jim Morrison, explain the ‘look’ and then lead people through a sales funnel so they can dress like a rock star.

The process works, and this advertisement > editorial > sales funnel method is one of the reasons why Facebook has become the biggest seller of online display advertisements in the US – topping $2 billion sales in the 2010/2011 financial year. When targeted correctly and combined with content that keeps fans returning, Facebook ads work incredibly well.

Just ask any one of the scores of group buying websites that have appeared, seemingly out of nowhere, in the last 18 months.

 

Group buying

If social media was the hero retail marketing trend of 2010, group buying is undoubtedly the biggest thing to happen in 2011. The concept is simple – you build a website and hire a sales team to convince retailers to give you a ridiculously cheap offer. The offer only goes on sale once a critical mass of people say they’ll buy your product, so the retailer doesn’t lose out, and the rock bottom prices and regularity of the deals means the group buying website is able to attract an audience of people who will check back every day to see what new deals are available. It’s not a new concept, but 2011 has been the year the phenomenon has really taken off, and it shows no sign of slowing.

Matt Glasner, general manager, Experian Marketing Services explains: “Based on the Experian data, we don’t expect to see a peak in group buying right now; it’s continuing to explode in popularity. We are seeing new entrants to the market on a regular basis, with activity on these sites representing additional online activity. Group buying is actually attracting more people onto the web and signifies new internet traffic, rather than taking internet time from existing sites.

“The driver behind this is that Australian consumers are looking to extract better value from retailers and we are witnessing a transformation in consumer behaviour, as people change the way they shop. It represents a fundamental shift in the way that consumers are using the internet to drive value, where they haven’t been able to gain value from traditional channels. Retailers are reluctant to move on the threat posed by these sites, but they will need to follow suit if they are to remain competitive against group buying and discount online retail sites, like Catch of the Day.”

A look at the Google Trends graph, showing the increase in search volume for market leader Scoopon, illustrates the level of interest from the public. In early 2010 the site was unheard of – a year later and search volume has increased 15-fold compared to the average. It is nothing short of a phenomenon.

But does it work?

In a nutshell – yes. As a marketing tool it can put a brand in front of an audience of millions (Scoopon claims more than 500,000 members) and there’s no risk involved because a company only has to go through with the deal if enough people buy it to make it commercially viable. Better still, you only pay the group buying site a commission once you get paid yourself, so unlike almost any other form of marketing, you’re paying purely for performance.

Even traditional publishers are getting in on the concept. In June, Vogue ran an online sale with special time-limited deals from its advertisers and managed to attract 35,000 unique browsers to its website between 5pm and midnight on a Wednesday evening.

Vogue advertisers reported record sales in conjunction with the offer, although a common criticism of group buying and ‘deal of the day’ sites is that people looking for the cheapest possible deal aren’t necessarily the ones you want in your store. Still, the exponential growth of the sector speaks for itself and anyone with a Facebook account would struggle to go a day without seeing an ad for a new group buying website pop up in the feed on the right-hand side.

 

So what’s next?

With the National Broadband Network starting to deliver next-generation internet speeds to Australian homes and technology beginning to make the leap from desktop to the television screen, it’s likely the future of retailing will be a lot more interactive.

Microsoft’s ‘Kinect’ technology for Xbox 360 already allows people to manipulate computer games without the use of traditional controllers, by monitoring the movement and shape of the human body (like Wii, but using your whole body instead of a handheld device). The same principle can be applied to clothes shopping, allowing people to ‘virtually’ try on garments from a store, or their own home. To get an idea of what this would look like, check out Cisco’s YouTube video on The Future of Shopping – it is amazing.

At the same time, Hitworks’ Paul Downs is urging brands not to forget the basics, like search engine marketing campaigns targeting people actively searching for your products, because, at the end of the day, when it comes to shopping online, there are a million choices and a decision on who to buy from inevitably comes down to price.

“Consumers crave great products at a great price and want an awesome retail experience, that is true, but with the power of internet search, shopping comparison sites and smartphone barcode readers such as Red Laser, today’s consumer literally has the power at their fingertips to price compare and purchase instantly online or find the nearest retailer to where they are located,” says Downs.

“Providing the consumer with the best-priced product should be an absolute priority, as consumers become more sophisticated and savvy to price comparisons and the means by which they can purchase become simpler and more convenient.”

Apple dominates SE Asia mobile internet

More than half of South East Asian mobile internet users are doing so via an Apple device, according to new data from digital research firm Effective Measure.

The study examined South East Asia’s ‘emobile population’, or those that use the internet through a mobile device such as a smartphone or tablet (and also including iPod touch), which numbers roughly 22 million people in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.

Of those surveyed, 11.8 million (53%) use an Apple device – 32% iPad, 19.1% iPhone and 1.9% iPod touch. Only in Singapore does iPhone hold a higher share of usage than iPad.

Similar results were found in an equivalent study of Middle East and North African mobile internet users, among whom Apple commands a 55% share of the market, although iPad (24%) trails iPhone (29%) in that region.

In South East Asia, Singapore was found to be the second most ‘Apple crazy’ country, after Thailand where Apple enjoys a whopping four out of every five mobile internet users do so on an Apple device.

Apple share of South East Asian markets

  1. Thailand   79.6%
  2. Singapore   75.8%
  3. Philippines   69.2%
  4. Malaysia   57.1%
  5. Vietnam   33.7%
  6. Indonesia 10.6%

 

Other brands with products in the top 10 most used internet mobile devices were Research In Motion (RIM, makers of the BlackBerry range of devices), Nokia and Samsung.

Top 10 most used mobile devices in South East Asia

  1. Apple iPad   32.0%
  2. Apple iPhone   19.1%
  3. RIM BlackBerry Curve 8520   3.5%
  4. RIM BlackBerry Onyx (aka Bold) 9700   2.2%
  5. Apple iPod touch   1.9%
  6. Nokia C3-00   1.6% $179
  7. Samsung Galaxy Tab P1000   1.4%
  8. Nokia 5130 XpressMusic   1.2%
  9. Samsung Galaxy Mini S5570   1.2%
  10. RIM BlackBerry Curve 9300 3G   1.2%

 

Note that device number three, the BlackBerry Curve 8520, is the cheapest BlackBerry, and among the cheapest smartphones, on the list. A recent subtle change in Apple’s iPhone marketing strategy has seen it keep the three-year-old iPhone 3GS from retirement, some say in order to target emerging markets and the low end of the smartphone market. This points to developing markets such as those in South East Asia as representing a significant opportunity for smartphone brands that have generally only targeted the high end of the market.

Apple launches social networking platform

Apple has announced the launch of Ping, its music-oriented social network platform, available through iTunes.

Ping, coinciding with the release of the latest version of iTunes (version 10), allows users to follow favourite musicians, as well as follow friends to see what music they’re listening to and which musicians they’re downloading. As is common on other social network sites, users can share their thoughts and opinions, but this time largely around their favourite albums, songs, concerts and downloads.

Ping is able to draw from a huge database, as iTunes already has over 160 million users in 23 countries.

“iTunes is the number one music community in the world […] and now we’re adding social networking with Ping,” said Steve Jobs, Apple’s CEO. “With Ping you can follow your favourite artists and friends and join a worldwide conversation with music’s most passionate fans.”

Apple has had a busy week, with the announcement of a few improvements to their range of music listening devices. The new iPod touch has features such as an advanced screen and high definition video recording, while the iPod Nano has also been improved upon with a touch screen and a ‘shake to shuffle’ track choice option and the iPod shuffle has been re-introduced with voiceover options.

Apple falls behind Windows Mobile in ad index

Windows Mobile has edged ahead of Apple in mobile advertising performance, according to the Smaato Worldwide Index.

Smaato, a mobile ad optimiser and advertising agency, has released a global mobile advertising metrics report, which analyses ad network fill rates and click-through rates (CTR) segmented by handset operating system, geography and response times, covering the ad fill rates of the global top 10 advertising networks.

The Index revealed that Symbian continues to lead the pack, with Android a distant second.

The biggest surprise is the lead Windows Mobile has over Apple – the iPhone and iPod Touch show a declining CTR, coming in with a rate of 89.

This is the first time Apple devices have dipped below the average Index of 100, and the first time that Windows Mobile has edged ahead of its rival. In December 2009 the iPhone posted a CTR Index of 119, sliding to 104 in January 2010.

BlackBerry comes in at 51, up from 30 in December 2009, while Symbian – still the dominant operating system – has dropped slightly. It comes in at 147, compared with 173 in December 2009.

The index is based on data collected from 35 mobile ad networks and over four billion ad requests served in the Smaato network of more than 3,000 registered mobile publishers in February 2010.

Steve Chazins insiders look at marketing Apple

In this special edition Marketing magazine podcast we reveal our interview with Steve Chazin, featured in this month’s Apple Superbrand Profile (in March’s Digital Issue – on newsstands now). Chazin is a former Apple marketer and currently CMO for DimDim. For those of you who’ve read the feature and want more – here it is. For those who haven’t, here’s a cruel teaser!

Over 100,000 apps served

Apple has announced developers have created over 100,000 apps for iPhone and iPod touch.

The figures make Apple’s App Store the largest applications store worldwide and indicate the growing dominance of the phone. The news follows research by Millward Brown pointing to the iPhone becoming brand of choice for Australians. In September, Apple celebrated the two billionth app download.

“The App Store, now with over 100,000 applications available, is clearly a major differentiator for millions of iPhone and iPod touch customers around the world,” said Philip Schiller, Apple’s senior vice president of worldwide product marketing. “The iPhone software development kit created the first great platform for mobile applications and our customers are loving all of the amazing apps our developers are creating.”

Pizza Hut has had exceptional success with their US iPhone app generating USD$1 million sales in three months.

“We always saw a steady level of growth with our mobile business via our WAP site, but to be candid it wasn’t the explosive level of growth we’ve seen with the iPhone app. iPhone applications capture consumers’ imagination in a way that WAP sites simply can’t do, so the decision to expand to the iPhone was as good one for us,” said Bernard Acoca, senior director of digital marketing, Pizza Hut.

A recent addition to free app functionality – In App Purchases – allows users to buy content, subscriptions and services which may have wide ranging effects on user behaviour and the perceived purpose of apps.

“The App Store has forever changed the mobile gaming industry and continues to improve,” said Travis Boatman, vice president of worldwide studios, EA Mobile. “With a global reach of over 50 million iPhone and iPod touch users, the App Store has allowed us to develop high quality EA games that have been a huge success with customers.”

Beyond Seiko – defining emotional technology

There isnt a definition for emotional technology, despite it being used as a brand name and scant references in postmodern discourse.

Yet in 2007 Japanese watchmaker Seiko began referring to its watches as using emotional technology. Since then press releases and advertising clips have described how: ‘Seiko’s technological development is focused on the creation of emotional technologies. Emotional technology creates the interaction between the wearer and the product.’

From here it’s easy to deconstruct a definition from Seikos text, set it within a meaningful context and even go beyond. First, technology is the product, not the mechanical or electronic drivers used to build or drive it. Second, emotional technology is defined by the creation of emotional intimacy between a user and the technology. Finally, this is measured by the level of comfort and efficacy derived from the technology and from the experience of closeness with it. For Seiko or any other technology brand, this occurs on between user and brand as well as on a collective basis.

Intimate engagement with technology is gauged by both degree of closeness and time. Technology needs to meet user expectations across the full span of a relationship, not just at purchase. Apple’s high rate of product innovation is not only the commercial imperative of in-built obsolescence but also the emotional commitment by users to its product. There is no better confirmation than hysteria surrounding the iPhone release or the opening of a new Apple Store. Each demonstrates Apple has a much better understanding of its users than most technology makers (think Sony’s Walkman failure and more recently, Motorola’s struggles) and has constructed this with real purpose.

The level of association between user and technology requires constant and increasingly intimate communication. Overt and expressive it includes visual branding, general advertising, promotion and communication. It also occurs by non-direct forms via personal proximity, audio and kinetic branding and technology design. While most technology branding does the former well and most do some form of the latter – the visual ubiquity of Apple’s white iPod headset, audio branding by Sony Ericsson or the distinctive design of a Dyson, all come to mind – few are exemplary in generating a high degree of intimacy.

Like all good relationships the success or failure of an emotional technology is affected by its nature, trust and the culture in which it operates. Mobile phones are more able to build trust and therefore a higher degree of intimacy than a washing machine, simply because the level, degree and type of relationship is different. Culturally, as Seiko notes, this ‘reassuring and emotionally satisfying bond’ with a mobile phone is also going to be different for the 14-year-old Gothic Lolita in Tokyo and the Gossip Girl fan in Manhattan. For each the basis of a more intimate engagement is determined by both usage and degree of customisation.

Importantly, emotional technologies need to ensure brand and product attributes are clearly defined, understood and shared. To see this is linked to brand success take a look at Saatchi’s Love Marks top 50. Without spelling out the obvious, the idiosyncrasy of this list is almost wholly dependent on the degree of intimacy and identification people feel between themselves and brands. Apple, the iPod and Google all occupy top 10 positions, while the Technology top 50 has Sony, TiVo and Sonar top 10 followed by Atari, Nokia, Nintendo, Canon, Blackberry and Nikon.

Seiko, for all its investment in its ownership of ‘emotional technology’ is yet to make the list. Ironically it’s an old technology watch brand that does. No surprises, it’s Rolex.