[ press Release ]

SMARTPHONE APPS GUIDE PURCHASES: 40% OF APP OWNERS TURN TO THEM WHEN MAKING SHOPPING DECISIONS – NEW KNOWLEDGE NETWORKS STUDY

One-third say they are more likely to purchase from app advertisers; report shows differences among iPhone, Android, Blackberry owners

Menlo Park, CA; June 30, 2010: Among those who use a smartphone with applications ("apps"), 40% refer to apps at least "sometimes" when making decisions while shopping; and, with iAd poised to bring app advertising to a new level, 32% already say they are more inclined to buy from companies that advertise in apps – a much higher proportion than for other emerging platforms.

These are among the findings of Smartphone Apps: General and TV-Related Usage, a new How People Use® Media report from Knowledge Networks. Produced as part of The Home Technology Monitor™, the study also shows that, among app owners ages 13 to 54

• 40% say the ads are "usually relevant to my needs and interests,"
• 46% report that the ads generally fit well with the ad context, and
• 70% say ads are a fair price to pay for getting a free app – even though an equal proportion feel that ads interfere with their enjoyment of apps.

One notable finding from the report is that likelihood to purchase from app advertisers is roughly twice as high as the equivalent level for advertisers in two other emerging media previously surveyed by KN: HDTV and social media. (See table below.)

Inclination to purchase from advertisers in emerging media   Among users age 13-54 of each medium   Smartphone app users1 HDTV viewers2 Social media users3 I am more inclined to purchase from companies that advertise on [medium] 32% 19% 16%         1: Those who use smartphones with apps 2: Those who watch HD programming on HDTV sets (source: How People Use® HDTV, 2009) 3: Those who use social media sites or features (source: How People Use® Social Media, 2009)

"The portability of apps means that they can travel with people as they shop, and the proportion of smartphone users – particularly iPhone users – already using them while shopping is eye-opening," said David Tice, Vice President and Group Account Director at Knowledge Networks. "We also found that, even before iAd has launched, advertising in an app is an effective way to take advantage of this symbiosis. Taking the opportunity further by creating a custom app is another, potentially more powerful approach."

The new report also reveals significant differences among users of the different types of smartphones; for example, people with iPhones

• typically have 29 apps on their phones – compared to 19 for Android users and 4 for Blackberry users,
• are about three times more likely to have paid apps compared with non-iPhone users, and
• are much more likely to be receptive to advertising in apps.

The study was conducted in April 2010 among 1,004 smartphone owners (ages 13 to 54) who are members of KnowledgePanel® – the only online panel based on a representative sample of the full U.S. population. The report is part of The Home Technology Monitor™, an ongoing program that tracks ownership and use of new and traditional media devices and services. The margin of error for questions asked of the full study sample is +/- 3%.

Knowledge Networks specializes in solving complex, high-impact problems, providing extraordinary quality and service to leaders in government, academia, and business. We work closely with clients to create sound public policies, accurate social science research, healthy consumer-brand connections, and effective marketing and advertising. We have established respected practices in government & academic studies, media, marketing, and advertising. KN excels in study design, analytics, and custom panel creation; we deliver affordable, statistically valid online research through KnowledgePanel® – the only available probability selected, nationally representative Internet panel.