Magazine Winter 2015 Research Feature

The Case for ‘Benevolent’ Mobile Apps

Some companies’ smartphone apps focus on pushing product sales. However, “benevolent” apps that build trust by providing consumers with valuable information can improve users’ image of your brand — and increase their willingness to purchase your products.

Glen L. Urban and Fareena Sultan Reading Time: 19 min 

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Sea Tow Service International
Sea Tow Service International, which provides emergency towing and rescue services for boaters in the United States, the Caribbean and Europe, offers a free mobile app that supports boaters’ navigation needs by including information about tides, weather forecasts, GPS coordinates and speed.

In recent times, perhaps no other consumer electronic device has impacted consumers as much as mobile phones. Mobile devices are everywhere. In the United States, for example, 91% of adults used mobile phones in 2013, and nearly 40% lived in households that had a mobile phone but no landline phone.1 Even among Americans above age 65, 77% reported having mobile phones.2 The total number of unique individual mobile subscribers worldwide is estimated to be around 4.5 billion.3

Smartphones make up an increasing share of mobile devices. Mobile penetration is expected to rise from 61.1% to 69.4% of the global population between 2013 and 2017.4 At a minimum, most phones in the future will be able to use mobile apps, which are among smartphones’ most popular features. The all-time cumulative total number of mobile app downloads stood at 37 billion at the end of 2011, but showed dramatic growth in 2012 — more than doubling in one year to 83 billion all-time total mobile app downloads.5 By July 2014, there were 1.3 million Android apps and 1.2 million Apple apps available.6 On average, smartphone users have about 40 apps on their phones and regularly use about 15.7

For companies, apps provide ample revenue opportunities. Worldwide revenue from apps was approximately $12 billion in 2012 and is estimated to increase to over $60 billion in 2017.8 Yet as free apps become increasingly prevalent, paid app downloads are expected to decline, and advertising and in-app purchases are likely to become the main revenue streams in the coming years. Mobile advertising has seen triple-digit percentage growth each year since 2010, when PricewaterhouseCoopers began capturing this data.9 In coming years, many new capabilities and potential revenue paths are expected to emerge in the mobile app space.

Yet some people have doubts about the effectiveness and viability of mobile advertising and believe that apps are a better medium.

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About the Authors

Glen L. Urban is the David Austin Professor of Marketing at the MIT Sloan School of Management and chairman of the MIT Center for Digital Business. Fareena Sultan is a professor of marketing at Northeastern University’s D’Amore-McKim School of Business in Boston, Massachusetts.

References (13)

1. L. Rainie, “Cell Phone Ownership Hits 91% of Adults,” June 6, 2013, www.pewresearch.org; and S.J. Blumberg and J.V. Luke, “Wireless Substitution: Early Release of Estimates From the National Health Interview Survey, January-June 2013,” December 2013, www.cdc.gov.

2. A. Smith, “Older Adults and Technology Use,” April 3, 2014, www.pewinternet.org.

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Acknowledgments

The authors thank Liberty Mutual and Suruga Bank for funding this study at the MIT Center for Digital Business. The authors offer special thanks to Courtney Quinn and Jane Choi at Liberty Mutual; Shigeto Takei, Takuya Yuge and Kengo Suzuki at Suruga Bank; and the authors’ team of research associates at MIT and Northeastern University.

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Comments (2)
Stanley George
For most business owners, mobile apps are an irrelevant medium or even a distraction. But today, smart brands all around the world are realizing the true value of the app and creating high-quality app experiences that users love. 

Stanley
Makaram Srinivasan
May I know of any illustration/ publication, where Hospital / healthcare Apps have improved delivery of patient care, improved quality of healthcare and saved limited resources.
e.g. A & E attendances, Bed utilisation, Orthopaedic spits & walking aids, orthotics etc.
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