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  |  October 12, 2012   |  Comments

Why the iPhone 4S may be the world's best marketing giveaway.

Since the September 12 announcement of Apple's iPhone 5, we've heard plenty about this new wonder device. And for good reason - it's a great new top-of-the-line phone that the digerati are, as expected, flocking to. Lost in the flurry of the new, however, is the former star of the iPhone lineup, the very good iPhone 4S. You know, the one we're all very quickly turning our backs on.

But rather than simply consign the 4S to oblivion, I want to focus on how marketers can take advantage of its now much lower price - and existing wide availability - to strategically use in their brand-building efforts. Specifically, the iPhone 4S can serve as a fantastic way to connect with consumers. The lure of "open a checking account, get a toaster" may no longer apply, but consumers still love getting something for free, and it's a great way to get them to learn about your product, improve a service, or build a relationship.

Smartphones are getting cheap. How cheap? Well, Entertainment Weekly (a client of my company) just featured a print ad for the CW Network in its magazines that is an actual working smartphone that displays constantly updating live tweets. Even iPhones are affected by the ability to build cheaply. Apple has worked with the carriers to set the price of the iPhone 4 to $0 with contract. That's an amazing phone with a price that is impossible to argue. But it's not a great giveaway - there is no way to use something that's already free as a premium (an "unlocked" iPhone 4 is a hefty $450, so businesses interested in providing a wireless device for the home would be much better off with an iPod touch or Nano).

But with the 4S at only $99 (again, with contract), it becomes easy for a marketer to subsidize that cost. Suddenly "open a bank account and get an iPhone 4S" is a much more compelling proposition than anything involving appliances. There are a huge number of iPhone 4 and even iPhone 3GS out there - and who wouldn't want a new (nearly) state-of-the art 4S for free? This means targeting two distinct audiences; existing smartphone users looking to get a better phone, and the customers that are new to smartphones.

If you think the smartphone market is saturated, look at the data from earlier this month below (the "News" aspect is incidental; I've included this chart because the data was published so recently). Only 44 percent of U.S. adults (18+) currently have a smartphone. Sure, the existing smartphone population is the most desirable group from a HHI and buying habits standpoint, but there is a tremendous amount of room for mobile growth.

emarketer-us-consumers-smartphone

There are obviously no shortages of ways to get iPhones - it's pretty frictionless to buy directly from Apple or through the carriers. But there can be an emotional connection with whoever sold you your phone, and with a little work that bond can be much stronger. The purpose is to keep consumers thinking about your brand as one that provides a value exchange. One simple but effective move is to create a custom case for the phone that is stylish and functional, but also has a subtle product reminder. Most people go for the path of least resistance; in the same way that they don't tend to change the start-up home page of their browser, if you give them a phone with a decent case, they are unlikely to change it out.

Here are two examples of how the free phones could be used in different verticals:

Automotive

The pitch: Buy or lease a vehicle, get a free iPhone 4S.

How to maximize it: Create an app that is your one-stop guide to that car. It contains a full manual for the car, with the incredible benefit of being able to search the manual for text (something that anyone who has ever flipped through a paper manual has wished for). Then add in alerts for regularly scheduled maintenance complete with one-touch calling to your dealer or online appointments. This drives the highest margin repair traffic back into the dealer network. Finally, add in a social network so that all Audi drivers, Quattro owners, or A3 owners (depending on how thinly you'd like to slice the audience) with the app can discuss the car, crowd-source issues, and share the enjoyment of driving it.

Sure, the app would be available in the App Store as well, but when it came pre-loaded on your phone with a slick (in this example) Audi case and beautiful Audi wallpaper, it's going to build incredible long-term enthusiasm for the car.

Cable/Satellite

The pitch: Free iPhone 4S to every new subscriber at a particular tier/contract or free with set-top box upgrade.

How to maximize it: MSOs (or multiple system operators, the official name for cable and satellite companies) have been waging a cold war with the OTT (or "over-the-top") upstarts like Netflix, Vudu, Hulu, Roku, Boxee, and many others. The MSOs have the customers, and they're trying to keep them from making a switch. Well, it's time to enlist smartphones in the fight. MSOs try hard to keep consumers from thinking that they're old-fashioned and out of date, and when you look at most set-top boxes and guides, it's a hard argument to win. If, however, you can give customers a free iPhone and tell them "this is your new remote," you've got a whole new message. This dovetails well with existing strategies, as MSOs are trying to drive adoption of their iOS and Android apps. As an added advantage, the MSO can push out new features or new remote software for its smartphone app any time without having to replace hardware.

Needless to say, any of these strategies are just as sound with Android or other phones, but there is a certain cachet to the iPhone that makes it an exceptional brand for marketers to associate with. When a piece of hardware this good becomes available cheaply, it means opportunity.

Toaster image on home page via Shutterstock.

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ABOUT THE AUTHOR

Andrew Solmssen

Andrew Solmssen serves as managing director of Possible's Los Angeles office, leading the firm's West Coast client teams and determining best practices for engagement management.

He previously served as managing director at digital firm Schematic, where he played a key role in developing some of the earliest advertising models for delivering broadcast content via the Internet. Andrew was also responsible for providing strategic guidance to clients such as Comcast, ABC Television, and NBC Universal in the areas of digital strategy, content distribution, mobile entertainment, and Internet TV. Before Schematic, Andrew served as executive producer at Web design and consulting firm Kaufman Patricof Enterprises.

A frequent speaker at industry events such as Digital Hollywood and CES, Andrew is also regularly quoted by business and trade media on the topics of digital advertising and technology innovation. Prior to his involvement in digital media, Andrew lived in Namibia as part of the Harvard Institute for International Development.

Follow Andrew on Twitter @asolmssen.

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