The Application Economy

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by: David Armano

Over at Forrester’s Groundswell blog, Josh Bernoff recently wrote this in the context of social applications doing well in a recession:

“I say social applications and not social media for a reason. People
will want to boost word of mouth in a recession. This is great news if
you’re selling community apps to companies. It’s also good news for
Facebook community applications and groups. You’re a company and you want to charge up your citizen marketers about your product — you can build your own application or climb on board an existing network and work within it.”

think he’s right.  But I want to take a step back even further–I don’t
think it’s just about social applications doing well in a recession as
much as it is that useful online applications (not just social) could
really be the biggest threat to both traditional advertising and what I
like to call traditional digital advertising.  I owe this
post to my wife, who’s online behavior inspired it.  As a stay at home
mom and “middle of the road” internet user, here’s how she typically
spends a day online:

Check e-mail on Hotmail
Searches on Google
Spend time responding to and e-mailing friends + family
Checks out links from friends (recommendations)
Browses real estate sites (it’s a hobby)

Checks e-mail
Searches on Google
Watches a video on YouTube
Browses Ebay
Browses travel deals on Expedia
Books flights for parents on Southwest
Browses Craigslist

Late Afternoon
Plays with kids on Webkinz, Noggin etc.
Checks e-mail
Searches on Google
Browses real-estate sites

Checks e-mail
Browses Ebay/Checks status
Watches TV on DVR

It’s The Application Economy, Stupid.
My wife
never clicks on an Ad banner.  She gets annoyed by talking people who
pop up on her screen and she only watches shows on our DVR and skips
commercials.  While she doesn’t use Facebook, Flickr, Twitter, Myspace
or other social applications–she does spend the majority of her time on
sites, or “web applications”.  For advertisers, the enemy isn’t social
media as much as it is that she chooses to spend her time on
applications she finds useful.  Everything else is noise.  Everything
else is something to be ignored.

The biggest threat to advertising is useful.  It’s that simple. 
Useful is a time and attention grabber.  It takes away from most forms
of marketing.  Useful as Webkinz shows us can also entertain–but to my
wife, it’s useful because it’s quality time spent with the boys. 

It’s truly the application economy.  Social applications
included–but as my wife’s scenario indicates, it’s the application part
that really matters as many internet users are still not active
participants in social media.  So marketers are indeed faced with a
challenge.  Continue to cram Ads (noise) into multiple digital
platforms (phones, web, GPS–anything with a screen)–or they can try to
figure out how to be useful.   Right now–the marketing industry is at
war with the people who create useful experiences.  These experiences
“distract” us–more accurately, they reward us.  The application economy
is as “un-sexy” as it sounds–and that’s exactly why advertising needs
to take it seriously.

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