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As smartphones continue to gain popularity and more companies release branded applications to add value and increase brand awareness it is important that they fully research and understand exactly how the app will affect their brand. Blockbuster, in an attempt to stay competitive as Netflix and Redbox devour their market share, decided a new strategy that involves offering new services and products and releasing an innovative iPhone app could increase brand awareness and relevancy. Unfortunately, they did not realize the implications of their actions. The Wall Street Journal reported that their iPhone application would allow customers to check and see if a rental is in stock before going to the store. This sounds like a great idea; it takes advantage of new technology and adds value for the customer by saving them time. However, it seems that Blockbuster has overlooked the fact that the application ultimately gives their customers a reason to not come to their stores. If someone who still uses Blockbuster to rent movies goes into the store looking for a particular movie and if they discover it is not in stock they will typically pick out a different movie because they are already in the store. This situation is ideal because it gives Blockbuster two rental sales, the current rental and then another when the customer comes back in for the movie they originally wanted to watch. Their new strategy involving the new iPhone app will result in fewer sales because the customer will not step foot in the store until it is convenient and the movie they want to watch is available. Also, depending on availability, customers using this app can get tired of waiting for a particular movie to become available and now be more inclined to switch over to Blockbuster’s more convenient competitors. Hopefully their other strategies can help them weather the storm but I predict the new iPhone app will spell disaster for the struggling rental chain. Blockbuster’s current mobile application strategy is a good example of how brands need to a well thought strategy before adopting new technology.

As more and more people adopt Smartphone technology it is being utilized as a successful medium for advertising. Sponsored mobile applications and web advertisements delivered through mobile devices have proven to be an effective way for brands to communicate their message to a targeted market by placing the ad literally in the hands of the consumer.

Last week, Greystripe mobile advertising network and Adgregate Markets advertising firm have introduced the newest platform to deliver advertisments through mobile devices; M-Commerce. As part of a full integrated marketing campaign, M-Commerce ads are rich media-enabled banner ads that allow the consumer to purchase the product directly through the ad effectively combining the point of discovery with the point of purchase. This new medium was introduced as part of the multichannel campaign for the DVD release of Quentin Tarantino’s film Inglorious Basterds. According to DM News, This new technology allows customers to use their phones to input credit card information and order the DVD through the e-commerce enabled banner ads. Adgregate Markets is confident this new platform will be a success as more people are expected to make purchases this holiday season via mobile phones but it is still unclear how many people will trust submitting their credit card information to a banner ad. Time will tell how effective this new medium will be but it is a good example of how brands are utilizing new mobile technology to reach the customer like never before. Although it may take a while to catch on with skeptical shoppers I believe calling the consumer to purchase the DVD on the spot through the ad will ultimately be successful. An estimated 53% of purchases made in the stores are impulse buys and this new technology allows for impulse buys virtually anywhere.