Virginia companies switch to apps and iPads to boost brands and businessOctober 27, 2011 6:00 AM
by Garry Kranz
As Hurricane Irene barreled toward Virginia in August, readers logged on to the Free Lance-Star’s mobile news site at a feverish pace. They used Internet-enabled smart phones and wireless tablets to track the storm’s destructive run up the Eastern seaboard. “We tripled our mobile traffic that weekend,” says Chris Muldrow, chief digital officer for the Fredericksburg-based newspaper.
It may have been a one-time surge of new visitors, but Muldrow says it also illustrates the compelling business potential of mobile technologies. The newspaper company’s local advertisers want to offer mobile coupons to consumers directly on their handsets and are buying online ad space as quickly as it is made available. “Advertisers are always looking at where our audience is. Increasingly, that audience is going mobile,” Muldrow says.
The Free Lance-Star’s experience illustrates just one way that mobile applications are taking hold in the business world. From newspapers to IT firms, railroads and restaurants, Virginia companies realize mobile technologies are an important new tool for doing business.
With increasing frequency, companies see value in offering customized mobile software applications, or “apps,” that people can download to their devices, usually for free. Railroad giant Norfolk Southern Corp. in Norfolk rolled out a downloadable app for iPhone users in August. Train buffs, investors, business partners and others can download the application from Apple Inc.’s iTunes store. (An application for Android users is expected to be released soon). For now, the software is mostly informational in nature. It allows users to access company news, track stock prices and corporate earnings, download images and receive feeds from Norfolk Southern’s Facebook page and Twitter account.
“This is our first application, but we think it could be a springboard for other applications that drive business value,” says company spokesman Rick Harris.
Nationwide, the transition from the personal computer to the “micro” screen is happening at a dizzying pace. Experts say it represents a seismic shift in how companies will market and sell their goods. Most significantly, mobile appears to make it possible for small, local companies to crack a traditionally tough nut: reaching consumers in their own local markets via targeted mobile Web ads.
Advertisers with the Free Lance-Star, for example, are seeking to reach local consumers with coupons that can be displayed for discounts at restaurants and other area businesses. “It’s a huge growth area for our advertisers and for us,” Muldrow says.
Four out of five small and midsize companies plan to launch mobile marketing campaigns in 2011, according to a report in June by Williamsburg-based Borrell Associates, a research firm. By 2016, combined spending on mobile coupons will top $3 billion, a tenfold increase above current levels.
Mobile ads are an emerging subset of online advertising. Of the $49 billion in projected spending on online ads in 2011, $10.2 billion — or 20 cents of every dollar — will be allocated to mobile advertising. “It took online advertising about 10 years to grow from a $500 million industry to $13 billion. We predict that local mobile advertising is going to reach that level in four more years,” says Peter Conti, a vice president with Borrell Associates.
The ubiquity of mobile devices is the driving force, especially the advent of smart phones equipped with Web browsers. Although they’ve been in existence since the 1990s, smart phones didn’t move into the mainstream until 2007, when Apple introduced its first iPhone. Competitors soon followed, most notably Google Inc.’s Android and Microsoft Corp.’s Window Mobile.
By 2012, smart phones will emerge as the computing device of choice, according to a report by New York financial services firm Morgan Stanley. It predicts more than 450 million smart phones will be sold globally next year, overtaking sales of personal computers.
In other words, users don’t want a cell phone solely for telephone calls anymore. Instead, they are demanding phones with features that mimic how desktops and laptops work. That includes the ability to download and install customized software. Downloads of mobile applications are on pace to eclipse 18 billion by the end of 2011, a growth rate of 144 percent, according to Ovum UK, a London-based telecommunications consultant.
In Virginia, many companies are seizing the trend. In September Richmond-based SnagaJob.com, an online job site for hourly workers, rolled out an iPhone app that enables hiring managers to access and review information of job candidates. Once the right candidate is found, the hiring manager also can use the application to directly e-mail or call the person with a job offer.
Commercial real estate firm Cushman & Wakefield | Thalhimer, which has several offices throughout the state, recently adopted two-dimensional bar codes — known as Quick Response Codes, or CRCs — as an aid in marketing retail properties. Interested parties can scan the barcode using their smart phones and view details of the property, including rental rates, square footage and floor plans.
Even as Web-enabled smart phones become commonplace in business, sales of tablet computers, notably the iPad 2 by Apple, are surging. Nearly 63 million tablets are expected to be sold in 2011, according to research firm IDC of Framingham, Mass. That’s up 17 percent from an earlier forecast by IDC.
Fueling the growth are businesspeople like Cathal Armstrong, a chef and owner of Restaurant Eve in Alexandria. Armstrong was among those who waited in long lines to purchase an iPad when it first came out. “I’m always on the go, so I knew it would be a really useful tool,” he says.
Rather than setting time aside at the end of day to answer hundreds of e-mail messages, Armstrong uses the iPad during the day to respond quickly and prevent messages from piling up — a situation he describes as “massively convenient.” But the biggest bonus is the ability to quickly research new recipes. Restaurant Eve changes its menu daily and buys most of its ingredients from individual farmers, who sometimes sell rare or exotic ingredients. That used to mean spending hours doing online research.
With the iPad always connected to the Internet, this enables Armstrong and his staff to research how new ingredients are used in recipes, without interrupting other activities.
“In the old days, if you got a new cheese, you shrugged your shoulders and said: ‘OK, it’s Camembert.’ Now, we can hop online quickly and find out what type of cows were used [to produce the cheese], the type of grass it was fed, when it last had flowers in its diet … and incorporate those ideas into a composed dish,” Armstrong says.
This summer, Armstrong was approached by a farmer selling Pinkerton avocados. “I had never heard of it,” he says. He used his iPad to quickly find several recipes, including a dish that pairs the Pinkerton with a complementary summer corn veloute.
Such minutiae may not be all that important to customers, but Armstrong says it helps the restaurant add interesting new dishes to its eclectic menu. “It’s constantly evolving, all driven completely by what’s available on farms and at the market,” he says.
After buying his iPad, Armstrong says he boxed up his office laptop and brought it home. He’s not the only one. Thirty-eight percent of business owners have ditched their laptops for iPads, according to a November 2010 report by Rockville, Md.-based Changewave Research.
How companies use mobile computing capacity is as varied as the industries themselves. At MicroStrategy Inc., a Tysons Corner-based maker of business software, executives and managers are able to be more productive by approving time-off requests, purchase orders and other routine management tasks via their iPads. Previously, those tasks required managers to sit at their desks completing paperwork.“These are people with significant revenue and budgetary responsibility, so even a 2 percent increase in their productivity has a huge impact on our bottom line,” says MicroStrategy spokesman Hugh Owen.
MicroStrategy has rolled out iPads to nearly 2,000 employees, including management and executive teams. Other users are in sales, consulting, professional services and support. In addition, MicroStrategy is seeing stepped-up interest from customers who want help to develop customized apps for smart phones, particularly the iPhone. These applications wouldn’t have been useful in the old, tethered world of desks and wired networks, says Owen.
The growing interest in mobile apps resembles the early days of the Internet when companies were rushing to create a Web site. The idea’s the same: to get noticed, to promote the brand and to make your business stand out from the competition. These days, customers can even pay by phone at some retail outlets — just another sign of the mobile revolution.
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