In a market glutted with free cell phone applications, and as advertising budgets dive along with the rest of the economy, what’s a mobile-media company to do? Seattle’s Zumobi has a few tricks up its sleeve. Namely, don’t charge your sponsors anything upfront, and find innovative ways to drive users of one of your applications to your others. Ken Willner, Zumobi’s CEO, described these strategies to me in an interview yesterday.
The company spun off from Microsoft Research in 2006 to create a widget-based mobile platform. In the last year or so, however, it has changed its focus from cell phone platforms to mobile-media applications for “superphones” (iPhone, Android G1, BlackBerry, and their ilk). Zumobi currently has five such apps on the market, all free for users to download. The more well-known among them are the REI Ski and Snow Report, which combines ski and weather conditions for more than 1,800 resorts around the country with a targeted REI catalog, and Inside Xbox 360, a news site and forum for Xbox gamers.
In November, Zumobi debuted Ziibii, an iPhone app that Willner calls a “social ticker.” It combines updates from social sites like Facebook, Twitter, Flickr, and YouTube, as well as RSS feeds, and sends them across your iPhone screen in random order as rafts on a virtual river.
With so many companies out there making free iPhone (and other cell phone) applications, I wondered what could make Zumobi stand out to users and advertisers. Willner, who has an extensive background in advertising and wireless media, thinks it’s all about branding the applications, and making them appealing enough to drive repeat usage.
“There are more than 10,000 apps in the iPhone store, most of them free. There’s just a lot of clutter out there,” he said. “There’s a real lack of sustained-usage type of apps that give the user a reason to come back, day after day or month after month.”
To that end, Zumobi is trying to build a network of applications, centered around the “Z-button,” a button on all of their applications that takes the user to a gallery of Zumobi’s other applications. This strategy is driving four to five times more usage of its other applications compared to average click-throughs from Web or mobile advertising, Willner said.
As for making sure people want to use its applications over and over again, that’s a trickier concept. Zumobi is just trying to come up with applications that provide some repeated usefulness for its users, Willner said. And then tie them to a sponsor, like REI.
The branded applications seems like a risky strategy when the ad market is tanking, but Zumobi is absorbing most of that risk itself, Willner said. When approaching a partner such as REI or Lenovo—Zumobi and the laptop-maker released an application tied to the Beijing Olympics for users to follow games on their phones—Zumobi pays for all the initial development and marketing of the application. Sometimes it creates the application for the partner company, sometimes it’s the other way around. Either way, through Zumobi’s performance-based business model, the partner only pays once the app is on the market and being used, said Willner.
“When you meet with a potential partner and tell them that you’re willing to put your skin in the game, willing to take the risk yourself, that’s a great message in this market,” Willner said.