There’s endless amounts of iPhone apps that are generating some serious money for big brands, all the way from Pizza Hut ($millions) to eBay ($billions). While ‘mobile strategists’ bang on about ‘mobile web first’, there’s no denying that the right idea mixed with an app at the right time, can drive big revenues.

Check out this iPhone app from Volkswagen to mark the launch of the Golf GTI Mark VI in the states. One thing to note is that there was no paid media surrounding the launch, it was purely off the back off the iPhone app.

Volkswagen, with the help of AKQA, decided to create a car game, but rather than go through the risk and cost of building one from scratch they decided to reskin a already established racer on the market. So they took the popular racing game called Real Racing (retailing at $4.99) and created a sponsored version of the game, calling it “Real Racing GTI”, then gave it away for free.

As you can imagine the game features the Golf GTI as the selectable car and features VW branding throughtout.

The clever bit is that users were invited to use the iPhones GPS functionality to locate their nearest dealer. This data enabled AKQA to directly trace purchases of the GTI Mark VI directly back to the app.

On top of all that, VW added incentive by challenging players with the reward of winning one of 6 real Golf GTI. Spot on.

So what were the results -

175 cars sold to registered players of the application, 50% of those sales to new customers.

The car retailed for $23,000, making at least $4 million in revenue.

Clickz.com makes a very valid point in that those are only the sales directly linked with the application. Once you look at the huge amount of ratings the app received (50,000) as well as it hitting number one in the download charts, the brand awareness must have also been sky high.

Congrats AQKA on a wicked exection and VW for putting promotional muscle behind the app.

  • http://blog.the-bods.co.uk Bod

    Wow – not sure I could have said it better than @sky force games…!

    Undoubtedly a great (and certainly a clever) piece of work on the part of AKQA and V-dub. I would question the $4 million that is “directly linked with the application” though.

    With a brand and product image as strong as VW Golf has, they have the collateral to be able to get away with an iPhone only launch, knowing that news would very soon spread – initially amongst enthusiasts but soon to the wider audience.

    I would certainly not want to think that consumers that would not have otherwise bought the car, did so directly because of a branded game. The more plausible explanation is that most of these would have ended up with a GTI anyway but in the process of looking around about it, found the app and downloaded it…

    So I’ll take the fact that the app generated $4m in revenue with a pinch of salt but certainly pay great credit to the guys that put the activity together and are continuing to make media-credit out of it!

    • Murat

      I knoooow I know, you’re right, but I was in quite a happy mood and I gave it the benefit of the doubt.

      So it’s like saying everyone who used the Pizza Hut iPhone app (which generated $1,000,000 in 3 months) was probably going to buy one from Pizza Hut by web/phone anyway so that is not a new revenue stream and doesn’t count.

      Or you could look at it like this – those people were in the market to buy ‘something’, it’s just whoever caught their eye first. Whether they might have got a Dominos pizza, or in Volkswagons case, a cheaper model of VW or a different car entirely, whatever, we’ll never know.

      But what you do know is that those test drives were tracked back to the application so I think we should let AKQA milk it on this occasion. God knows I would.

      • http://blog.the-bods.co.uk Bod

        Absolutely right.

        And in addition, if nothing else, the activity has given them an insight into their customers – they know that a given number of people who drive their car play iPhone games and so can use this channel as a way of engaging with them in the future.

        You know how I feel about apps, so it’s nice to see a news story about an iPhone app in which the results justify the buzz – so like we say, idea + execution = great results!

  • http://mobithinking.com mobiThinking

    Are you suggesting that companies invest in an iPhone app before doing mobile Web or instead of mobile Web? But this is this actually true for the examples you provide?
    Like most mobile app success stories, VW, eBay and Pizza Hut did mobile Web first. Well, they probably actually did SMS first, then mobile Web, then mobile apps. Cover the mass market before going for niche markets.
    I don’t mean to take anything away from the VW iPhone app, it’s very good. It was a good game and it also allowed people to find a dealer, book a test drive and most importantly enabled VW to track the sales to those who had played the game. But I think it’s a bit much to suggest that those 175 bought the car because they liked the mobile game.
    It worked really well as a marketing tool, as many mobile apps from the biggest brands, VW received lots of free publicity from journalists that are – or were – going through an Apple/app love affair.
    It won a well deserved Silver Lion at Cannes. There’s a full description and an excellent case study video here: http://mobithinking.com/mobile-awards/Cannes
    But this iPhone app was not VW’s first foray into mobile – if you check back into their mobile history, you will probably find they’ve been doing mobile for nearly a decade, starting with SMS and Wap. I’d suggest this app wouldn’t have been as good if VW didn’t have substantial previous mobile expertise.

    • Murat

      Yes I am suggesting they do apps first IF that best suits what they are trying to achieve. Without knowing anything about objectives, budget, existing analytics and demographics how is mobile web first the best solution? Of course you should do both but budgets don’t normally stretch that far.

      But again it all comes down to what you are aiming to do with mobile (sell stuff, brand awareness etc), once you have the idea you then find the best way of executing based on objectives. If an app is the best way to execute your idea, great, use apps. If mobile web/sms/mms works best, then beautiful, use that.

      I’m across everything eBay and Pizza Hut have done in the past. My point about wasn’t that they didn’t do mobile web first, it was they are making more money from their iPhone apps then their already established mobile web properties. The CEO of Pizza Hut said that the iPhone app had already supassed their other channels within 3 months, What does that tell you? The same with eBay, if you look at what their CEO has said, the majority of their mobile revenue is the iPhone app.

      Reach and engagement are totally different. I have access to a number of ecommerce and mcommerce mobile analytics for my clients and I can safety tell you that even though the brands all have different demographics as their customers (from teens to oldies), the bulk of hits and orders are always consistent – iPhone 70-80%. And what about the orders from all those other phones? Tiny. HTC and RIM battle for what’s left and Nokia barely gets a sniff.

      It doesn’t take a genius to figure out that people with shit phones don’t spend money. Either the experience is crap and painful, or simply they just aren’t as comfortable as a iPhone user who is primed by iTunes and the app store. So if 80% of your users are iPhone, who are you going to try on capatlise on more when you get your mobile marketing budget? That 20% who won’t spend fuck all, or perfecting the experience for that 80% and get them spending more?

      At Nokia, they spent millions on segmentation data, they build up scarily accurate personas for customers with huge amounts of research into who buys what phone and what they are likely to do with it. They actually have profiles for phones that tell you the likely salary of the owner, spending habits etc. So yes it is possible to make assumptions about someone based on what handset they own.

      If you can tell me the brands who are making more money with their mobile web stores than their app equivalent then I’ll be eager to hear but from where I sit with leading retailers and brands, it’s all iPhone.

      A shit idea is always going to be a shit idea, if some lame arse app gets released, everyone seems to blame ‘iPhone app mania’, when it’s actually the brand/agencies fault for not thinking it through.

      A good idea which is well executed can make you millions or a shit one can waste a lot of money, but isn’t that the same thing with everything in business?

  • diego

    Take a look at the text, it says volkswagOn every time you want to say volkswagen

  • Mark F

    It was a fantastic piece of marketing for AKQA.

  • Mark F

    To your point that people with shit phones don’t spend money, do you mean that they don’t spend money on their phones?

    I guess there is more to life than m-commerce, though.

    Yes, people spend more money through their smartphones than their Nokia 3310s.

    However, getting people to spend, spend, spend, money, money, money is the endgame for all our mobile marketing efforts. Orange Wednesdays is a classic example of where mobile has been used for that purpose regardless of platform outside of m-commerce.

    What I’m trying to say is there’s more to life than m-commerce. It’s become the new-old buzzword (again).

  • Mark F

    I think if you read my previous post, you’ll understand that I’m trying to say that there is more to life than m-commerce.

  • Murat

    Interesting, but is there more to life than m-commerce Mark?

    I think the point is both – people on bad phones don’t spend money – it could be either:

    a) they don’t have much money
    b) their phone is so god damn shit they can’t even attempt to go through any checkouts (bad UI, slow browser, a Blackberry Curve)

    I agree with you, like I said it depends what you wanna do selling stuff isn’t always the primary goal, but if you want to shift a 20k car, it defo isn’t worth showing it to someone with a £19.99 phone that tops up £10 every 3 weeks.

    It really has become a new buzzword hasn’t it?

  • http://mobithinking.com mobiThinking

    Could you give me the source for your eBay and PizzaHut stats and/or comments, please? I’d like to follow them up, but I’m struggling to find them on their sites.
    To respond to your response above (thanks for taking the time). My understanding is that m-commerce is still a small part of what companies do with mobile. I’d suspect that the vast majority of companies – most retailers even – still don’t do any m-commerce at all.
    The majority of mobile activity today is communications/marketing/CRM/engagement, which will drive revenues, but not through m-commerce. In the real world all people buy things whatever handset they have and all people can be reached through mobile whatever handset they have… even the 98% of your customers that don’t have iPhones. That’s why the biggest success stories in mobile marketing to date, use the channel with the most reach of all good old SMS.
    The VW campaign in this story drove sales through the showroom not through m-commerce. Not meaning to criticize the VW campaign, but what proportion of total cars sold were sold to people that didn’t have iPhones. Could people with ‘crap’ phones (as you call them) also have been targeted via mobile?
    But sticking to m-commerce, I believe that Taobao is considered the world’s number 1, not Amazon or eBay. This isn’t really surprising when you consider that within 6 months there will be more mobile Web users in China than people live in the US and more people who exclusively access the Web via mobile in China than live in the UK. And how many iPhones are there in China?
    All the stats are here: http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats
    Also I’m intrigued by the numbers your clients are experiencing, can you tell us more? Assuming that these are normal businesses with a full cross-section of the population as customers, then perhaps they should also consider the conundrum the other way round. If they are making 70-80% of their mobile revenue from the 2% of their customers that have iPhones, then shouldn’t they be asking why they are failing to reach the other 98%? Perhaps it’s a bit early for them to be buying things by m-commerce. There are dozen’s of other ways to do mobile-led sales, perhaps the other customers might respond better to an m-voucher to be redeemed at POS or a click-to-call link to the direct to the call centre? I’m not sure it makes sense to right them off just because they don’t do m-commerce –customers with ‘crap’ phones still buy stuff.

    • Murat

      They won’t be on their actual sites, just need to do a bit of Googling:

      CEO John Donahoe said Shoppers to spend $400million on eBay using iPhone app in 2009 and then in another interview he says eBay revenue from mobile will be $500 million in 2009. That of course means that even though eBay Wap and SMS had been around for aaagges before the iPhone, it suddenly makes 4 times as much within its first year.

      Pizza Hut director of marketing Bernad Acoca – “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

      The biggest success stories were SMS but now they are also iPhone apps. I could list the number of apps, games, services, brand awareness campaigns that have either made millions or been downloaded hundreds of thousands of times.

      This isn’t just about m-commerce, you mention that the VW drove sales through the showroom, but my point wasn’t that these cars were purchased on device, it is that they were marketed to iPhone users who were more likely to buy the car than other phone owners.

      I can’t tell you more about my clients due to NDAs but they are experiencing the same thing, both in terms of sales and website hits from device. Yes there are other channels like vouchers, mobile web etc but like most retailers, the cost of reconfiguring EPOS terminals to support mobile vouchers would probably cost far, far, far more than an iPhone app.

      You can’t deny that there is a direct correlation between the type of handset and the way those people spend and browse the mobile web. You have to look at this from a business perspective, supporting lower-end/mid-range handsets cost money – there is a direct cost to the business. If those users barely make purchases or even browse the site at all, then what is case for continuing that support or not making an iPhone app from the off?

      I get briefs from brands (not just retail) and I get to see all their Omniture/Web Trends stats, I take a look and looking at 80% iPhone + some iPod in their too and I’m thinking that’s the opportunity right there, I can exploit the hell out of that segment and get some real good results. Mobile marketers shouldn’t feel restricted by some absurd obligation to reach every single phone in the world.

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