Apps: The Newest Brand Graveyard

NEW YORK Standing before an overflow crowd of the crème de la crème of the advertising world in Cannes this summer, Nike global director of digital media Stefan Olander explained how the brand saw its mission as building community through applications. He highlighted a new initiative: the Ballers Network, a robust Facebook application built by digital shop R/GA for basketball players to find games and manage leagues. On its Web site, Nike promises it will “revolutionize the way players around the world connect online and compete on the court.”

Six months later, Nike is confronting a dilemma familiar to many brands that charged headlong onto Facebook: very few people use Ballers Network. Despite its global ambitions and support in three languages, the application has a mere 3,400 users per month. According to Nike, it’s still testing the application.

Brands, in general, have found Facebook unforgiving terrain for marketing. It’s well known, for instance, that banner ads perform poorly on the site. (A recent IDC report called advertising on social networks “stillborn.”) But the Facebook Platform, launched 18 months ago — which lets developers create social applications for users — was thought to offer the perfect opportunity to move beyond banners to provide “branded utility.” So far, however, Facebook apps from brands like Coca-Cola, Champion, Ford and Microsoft are as popular as desolate Second Life islands.

Mike Murphy, vp of global sales at Facebook, defends the platform by noting success stories would likely involve much broader efforts than they’ve seen so far. “We find that if a brand builds an application as their social strategy and not as a tactic that contributes to their overall strategy, then more than likely they won’t see good results,” he said.

Application experts pointed to several other reasons so many top brands have fallen short. In some cases, they said, brand apps are too complicated. Some provide little worthwhile interactivity and are overly branded. And despite Murphy’s admonition, most exist as one-off experiments, tied to a launch-and-forget campaign approach versus one created with the mind-set of a developer, which leaves room for tinkering. What’s more, many companies build applications on the cheap, frequently relying on “viral” distribution rather than buying media. One overriding criticism: They’re often little more than ads.

These applications, said Adrian Ho, partner at Zeus Jones, a Minneapolis brand consulting shop, are “still about being disruptive and grabbing attention. [But] if you talk to most designers who do things useful, they try to make them as invisible as possible.”

Take Ballers Network. The application, say some developers, is too slick. Unlike the most popular applications, it resembles a Flash microsite with lush photography. And while simple typically wins out in social networks, where users jump from activity to activity, Ballers Network has myriad options. These include finding courts, creating pickup games, managing league results and trash-talking opponents. Nike also hasn’t promoted the application through media buys. Perhaps most important, said Chris Cunningham, CEO of Appssavvy, an ad rep firm for developers: Ballers Network feels all about Nike.

“Marketers want to build something that’s product and marketing first,” he said. “The developer wants to provide utility, functionality and better someone’s life.”

Even Facebook application “success” stories have fleeting appeal. FedEx proudly trumpeted the viral aspect of Launch a Package — an application for the sending of virtual gifts in FedEx packaging — that gained 100,000 installations in three days. In all, FedEx reported, 1 million packages were sent. But many of those users didn’t stick. The numbers indicate that by late September, just 4,000 people were using Launch a Package per month, according to Appdata. Now it attracts just 1,500 monthly users.

One possible reason for the big dip: People were acquired through pay-per-install ad networks, where application makers “guarantee” downloads by inviting users getting another app to add one from an advertiser.

“People are tricked,” said Cunningham. “They have no idea what they’re installing.”

Andreas Combuechen, CEO of FedEx digital shop Atmosphere BBDO, believes the program was a success, if only in the short term. “Do we know what the magic formula is? I don’t think so,” he said.

Success stories seem to involve simple messaging and modest expectations. Anheuser-Busch, for instance, used a Facebook application as part of a Bud Light party cruise. The app was given to 4,600 cruise goers who could use it to see who else would be on the ship, upload photos and keep in touch afterward.

“There’s a social context for the cruise that makes it fundamentally better,” said Michael Lazerow, CEO of Buddy Media, the firm that created it.

For big brands needing mass reach, partnering is easier. Gap reached 7 million users in a little over a month by partnering with RockYou’s Pieces of Flair during the presidential election for an app that distributes virtual campaign-style buttons. Digital shop AKQA considered building a Gap application, but decided against it, according to Scott Symonds, executive media director at AKQA.

While such media buys aren’t revolutionary, they’re probably the best way for brands to participate on social networks, he said. Slide, a top app company, has integrated brands like VitaminWater and Starbucks into their most popular Facebook franchises. Microsoft tried building its own “poking” application to promote Office, but an integration with Slide’s FunSpace app, which has 14 million users, got the same engagement at a tenth of the cost, according to Kevin Freedman, CFO of Slide.

“You can take that same amount of money and spend it to reach the consumers who are going to use your product,” he said. “Just look. It’s pretty clear building [brand] applications isn’t working.”