US Associations Use of Mobile Applications 2012

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1 The ubiquity and improved functionality of mobile devices have made them the preferred information access tool for many executives. Associations are rapidly adapting to this reality by optimizing their Web sites for mobile and by developing mobile applications that enhance the association s mission. In 2012, less than one-fourth of associations with an annual budget of $1 million or more deployed mobile applications. These apps will experience tremendous growth in the next several years as they become ubiquitous at industry events and support an increasingly diverse range of industry-specific activities. US Associations Use of Mobile Applications 2012 Benchmarks and Best Practices Andrew Roscoe, Managing Partner Andrea Knotts Bona, Managing Partner One Orange Feather, Inc.

2 Table of Contents Table of Contents Key Findings..3 The Growing Importance of Mobile Devices in Digital Marketing Study Methodology Key Drivers in Association Use of Mobile Apps... 6 Mobile Apps Represent a Growing Share of Association IT Budgets...7 Large Associations Lead Early Adoption of Mobil Apps. 8-9 Meeting and Event Apps Drive Early Adoption of Mobile Apps ASAE Sets the Mobile App Pace for Associations 11 Case Study: SVU s Mobile Meeting App Spurs Engagement Case Study: APhA Moves from Experiments to Strategic Development Case Study: Texas Credit Union Leagues Studies Custom Vs Off-the-Shelf Development Mobile Apps a Natural Extension for GuideBook 17 a2z Transforms Biz to ebiz Core-Apps Expands Mobile Apps Beyond Events 19 Top Association Mobile App Vendors. 20 Future Association Investment in Mobile Applications Non-Meeting Mobile Apps Forecast Associations and Mobile Apps by Segment: Association Mobile Apps: Key Findings

3 Key Findings Twenty-two percent of the 250 associations surveyed supported a mobile application at mid-year The percentage of associations using mobile apps increases with the size of the association s annual budget. Fifty-seven percent of associations with budgets greater than $100 million use mobile apps, while less than 10 percent of associations with budgets under $5 million use mobile apps. The leading association industries with mobile apps are finance, telecom/e-data and real estate. Associations in the medical/health industry are expected to be leading adopters as well. The most common function for association mobile apps is support for meetings and conventions, accounting for 41 percent of all association mobile apps. Other major mobile app functions include publications, news, information and industry-specific. Over the next several years, mobile development will become a significant line item in association IT budgets. The largest market for mobile apps will be in associations with annual budgets between $25 million and $100 million. US Associations Use of Mobile Applications 2012: Benchmarks and Practices About the Authors Andrea Knotts Bona is a respected association executive with 20 years of strategic marketing, branding and digital publishing experience in the association and B2B sectors. An expert in digital marketing strategies, prior to launching One Orange Feather, Ms. Bona was vice president of Strategic Marketing for the Mortgage Bankers Association, where she spearheaded corporate branding and digital marketing. Previously, she was a consultant with McKinley Marketing Partners, where she led new product launches for pharmaceutical clients and developed strategic digital marketing campaigns for technology companies. Ms. Bona is known for her ability to conceptualize strategic communications direction and orchestrate marketing and communications campaigns that effectively reinforce and build brand images. Ms. Bona has a BA in Communications and Sociology from James Madison University. Andrew Roscoe is a 25-year-plus executive with a track record of building successful businesses using a range of business models. Mr. Roscoe is a recognized thought leader in association digital marketing and is an active member of ASAE s Research Committee. He has experience in executive operations, corporate process, marketing, strategic planning, market research, economic analysis and IT management. Mr. Roscoe's previous positions include executive director Corporate Operations at Technologists, Inc. (a mid-sized international government contractor), CEO Roscoe Consulting (a marketing consultancy serving trade associations), chairman and CEO of O2 Wireless Solutions (a public telecommunications construction company), and Chairman and CEO of The Strategis Group (a global marketing and management consultancy). He has a BA in International Affairs and MA Economics from GWU. One Orange Feather Inc. specializes in providing marketing and management solutions to the trade association, technology and government sectors. From branding, to Web design, to multi-channel marketing campaigns, we create integrated solutions with the broadest reach to create memorable impact. 3

4 The Growing Importance of Mobile Devices in Digital Marketing More Americans than ever are accessing the Internet on mobile devices. Associations are reacting to this trend and focusing more resources on the development of mobile-friendly content. Association executives must determine how aggressively to pursue mobile strategies and what investments will yield the greatest returns. One Orange Feather has found that associations are still in the early stages of mobile application (mobile apps) adoption. Only a minority of associations currently are using mobile apps, although that number will grow dramatically in the next few years. We found that many associations, particularly small- and mid-sized associations, do not fully understand the options available to them and the costs and benefits to implementing mobile applications. This study documents the current status of mobile app adoption and the most popular applications in use. We identify vendor business models, likely investment levels and the benefits of these investments. 4

5 Study Methodology Distribution of Associations in Survey by Annual Budget $1 - $5 Million 39% One Orange Feather Inc. < $1 Million 8% $100 Million+ 5% $25 - $100 Million 17% $5 - $25 Million 31% One Orange Feather undertook a detailed study of 250 associations in mid-2012 to determine their use of mobile apps. Our sample represented a wide range of associations in terms of size and industry group. We deliberately over-sampled larger associations to provide a sufficient sample size to reach conclusions for this group. As a result, the sample statistics are accurate at the sub-group level, but the total industry statistics are skewed toward behavior of associations with an annual budget greater than $1 million. We surveyed a small number of associations at year-end 2011 to determine planned investment in mobile applications. These budget surveys are not statistically significant but provide general indications of budget patterns. In addition, we developed case studies on mobile apps from the perspective of both associations and vendors. 5

6 Key Drivers in Association Use of Mobile Apps The rise of the 3- and the 9-inch screen has created an entirely new app economy, driven largely by the Apple and Android mobile app stores, said Robert Bruce, a writer for Copyblogger Media. Smartphone users represent nearly 42 percent of all U.S. mobile users. The number of U.S. subscribers surpassed the 100-million mark in January 2012, up 13 percent since October 2011 to million, according to comscore in its 2012 Mobile Future in Focus, white paper. With the move toward mobile devices, it is not surprising that associations have taken steps to make their Web sites mobile accessible. According to comscore, more and more professionals are relying on smarphones and other wireless devices to access information; in December 2011, 47.6 percent of the total mobile audience in the United States used apps, an increase of 13.3 percentage points, while 47.5 percent used mobile browsers, up 11.1 points. Along with the growth in smartphone adoption, there were more than 400 smartphone models available in the United States in 2011, investment in mobile applications by publishers has fueled increasing app usage among total mobile users, said comscore. 6

7 Mobile Apps Represent a Growing Share of Association IT Budgets Associations have responded to the demand of constituent audiences to provide critical information accessible via mobile devices. As a result, IT budgets have shifted to provide more resources to mobile-enabled applications. Mobile-enabled applications include providing mobile friendly access to the association s Web sites, as well as dedicated mobile applications. While the majority of associations, both large and small have optimized their content for mobile device consumption, a small percentage have developed separate mobile sites and many associations have developed mobile apps or are driving members to mobile communities. Our survey of association IT budgets indicated that just over half 55 percent of associations will include mobile app or mobile development expenses in the next IT budget. Among those associations that included mobile applications in the IT budget, the average expense level was 13 percent of the budget. One-quarter of associations plan to devote more than 10 percent of the IT budget to mobile applications development. Mobile Applications Share of Association IT Budgets % Budget 15% 25%+ Budget 10% 1-9% of Budget 30% No Mobile Apps 45% 55% of Associations will include mobile apps in next budget. One Orange Feather Inc. 7

8 Percent w/mobile Apps Large Associations Lead Early Adoption of Mobile Apps Most Large Associations Have Mobile Apps <1 1-5 One Orange Feather Inc Annual Budget (Millions of Dollars) % 50% 40% 30% 20% 10% 0% Mobile app development is still in the early stage of adoption in the association industry. Less than one-quarter (22 percent) of associations within our sample currently support a dedicated mobile application. However, more than half of the largest associations, those with budgets greater than $100 million, supported mobile applications in The modest adoption of mobile apps is evident in mid-sized associations, those with an annual budget of between $5 million and $100 million. About a third of these associations currently support mobile apps. Mobile app adoption among associations with annual budgets of less than $5 million is rare. Less than 10 percent of these associations currently support mobile apps. 8

9 Associations in Finance, Real Estate and Telecom have the Most Mobile Apps Agriculture/Food Associations in the Finance, Real Estate and Telecom Industries have the Most Mobile Apps Finance Telecom/E Data Real Estate Transportation Medical Education Business, Other Manufacturing Energy/Power Legal One Orange Feather Inc. 0% 10% 20% 30% 40% 50% Associations in the finance, telecom/e-data, and real estate industries lead the pack when it comes to supporting mobile apps. More than 40 percent of associations in these sectors were supporting mobile apps in Associations in the transportation and medical industries represent the second tier of mobile app adoption with adoption rates of about 30 percent. It is interesting to note that even within mobile-intensive industries, the higher adoption rate among high-budget associations holds true. For example, no firm in the finance sector in our sample that had a budget under $5 million currently supported a mobile application. 9

10 Meeting and Event Apps Drive Early Adoption of Mobile Apps Meetings and events, including conventions, represent the most prevalent association use of mobile apps. Forty-one percent of all association micro sites support this activity. Associations frequently finance meeting and event mobile apps through selling sponsorships. Within our sample, these sponsorships generally cost between $10,000 and $20,000. A number of vendors provide methods of providing visibility to sponsors as a standard functionality of the application. Other popular standard applications include association news and information (9 percent) and publication/journals (13 percent). More difficult to categorize are the industry-specific mobile apps supported by associations. These represent over onethird of all apps. Many of these apps are mapping/gis apps, identifying the locations of key places of interest to the industry. Other industry-specific apps involve manufacturing issues, medical information, financial/mortgage calculations and technical/engineering specifications. A significant issue for associations and vendors is the degree to which applications can be standardized with associated reductions in average cost. Meeting mobile apps tend to be standardized, or modified from a standard set of options. Journals and publications have standard applications available, but may require more extensive customization depending upon the level of graphic support or interactivity required. Industryspecific applications, particularly non-gis applications, are more likely to require custom development. Association Mobile Apps by Function Industry- Specific 35% Other 2% Publication 13% One Orange Feather Inc. Meeting Convention 41% News/Info 9% 10

11 ASAE s Members Drive its Mobile App Development ASAE Sets the Mobile App Pace for Associations The American Society for Association Executives (ASAE) is seeing members move toward the use of mobile applications; I am trying to get them to move faster, said Reggie Henry, ASAE Reggie Henry, ASAE, Chief Information Officer. Part of our mission is to try things so other associations can learn from our experience, Henry said. Unfortunately, what associations tried to do [when it comes to mobile apps] is to shrink their Web site. You cannot shrink, you have to re-think. Reggie Henry, Chief Information Officer, ASAE. With regards to mobile, Henry cautions members to develop a strategy, and the strategy does not have to cost a lot to develop. Unfortunately, what associations tried to do [when it comes to mobile apps] is to shrink their Web site. You cannot shrink, you have to re-think, Henry said. When it comes to mobile apps, ASAE takes a team approach. The team includes the chief of marketing and communications, the head of Web site initiatives and Henry. With regards to mobile apps, we came up with a strategy where we are not going to have a zillion separate mobile apps, Henry said. ASAE has mobile apps to support its events, and it is developing a Mega app that will handle everything else, such as mobile access for members to update their information, access to Collaborate, ASAE s private social network and a calendar function. ASAE does not develop its strategy in a vacuum. We ask people what they need. In addition, we watch people at meetings and events and observe what they are struggling with and [develop solutions], Henry said. In addition to its mobile apps, ASAE developed an ipad-only application, which 45 percent of attendees downloaded. It is a different kind of experience, you can take notes, access event information or access Collaborate, Henry said. 11

12 SVU Uses Mobile Apps as Tools of Engagement Case Study: SVU s Mobile Meeting App Spurs Engagement The Society for Vascular Ultrasound (SVU) represents vascular technologists, physicians, lab managers, nurses and other allied medical ultrasound professionals. Problem: SVU needed a tool to engage more fully the members and attendees at its annual convention. The society does the annual conference in conjunction with the Society for Vascular Surgery (SVS); it has more than 400 attendees and SVS has about 1600 members attending. SVU s membership is generally an older community, but it also includes students. We have found the best way to engage students is through social and mobile, said Francine Hamme, SVU, director, marketing and communications. I thought let s try an app and continue with FaceBook, LinkedIn and Twitter. We needed the app to house information on our program, speakers, breakouts throughout the day, different sessions, maps and exhibitors, Hamme said. I found that people at the show used the app, and those not attending were able to see the programming. It was a way to keep people who were not at the show engaged. Francine Hamme, SVU, Director, Marketing and Communication Solution: I used ASAE resources to research companies that could develop an app to fit our needs; we chose Crowd Source. They gave me examples of what they have done for other medical societies and showed us what we could and couldn t do and the cost. We paid between $5,000 and $6,000 to have the app developed. I also looked at ASAE s mobile app to get some examples of what a mobile app could do, said Hamme. SVU promoted the availability of the conference app via its monthly newsletter, multi-chapter Webinars and FaceBook two months before the event. The plan was to launch the app two weeks before the show. However, it launched just a couple of days before the show. We feel the app was a success. During the show and two weeks after the show the app attracted downloads from 195 iphones, 140 Androids and 5 Blackberries. We had great feedback about the app, and we got positive feedback from board members, Hamme said. 12

13 Case Study: American Pharmacists Association The American Pharmacists Association (APhA) has more than 60,000 members, including practicing pharmacists, pharmaceutical scientists, student pharmacists, pharmacy technicians and others interested in advancing the profession. It provides information, education and advocacy to empower its members to improve medication use and advance patient care. APhA Moves from Experiments to Strategic Development Problem: APhA initially did not approach mobile app deployment as a solution to a problem. One of our partner companies introduced the concept of a mobile app for our conference. There were no upfront costs to us so we thought no harm no foul. Basically it was the mobile version of APhA's Annual Meeting and Exposition program guide, said Irica Cheeky, APhA director of marketing. Mobile apps were fairly new three years ago so the uptake was not great. Only about one-third of the attendees downloaded the app, said Cheeky. Solution: The mobile app started as an electronic version of APhA s annual meeting and exposition program guide, but in the last three years has turned into a full blown conference app that 85 percent of APhA s show attendees download. APhA currently is using Core-Apps for its event app, which offers an off-the-shelf conference app that can be scaled for small to large events. A lot of ASAE members use Core- Apps, we have been pleased with their service, Cheeky said, adding, we use mobile apps for two conferences annually, and it costs us between $6,000 and $8,000. Similar to other organizations, APhA struggles to keep all of its communications channels content up to date with the latest conference information, and the mobile app adds more complexity to the work load. With three years of experience under its belt, APhA continues to expand its mobile app s features. We involve exhibitors. We used the app to push out alerts during the meetings so people who are not attending can see what they are missing, so the mobile app has been a success, said Cheeky. 13

14 Case Study: American Pharmacists Association (Continued) APhA Plans a Big-Picture, Long-Term Approach to App Development The goal this year is to pre-promote the show via the mobile app. However, timing is an issue; it is difficult pulling [all the content] together ahead of time, Cheeky said. Similar to other organizations, APhA struggles to keep all of its communications channels content up to date with the latest conference information, and the mobile app adds more complexity to the work load. We have a micro site for the meeting, but don t populate the mobile app until right before the conference. The question for us is, will the students be more apt to see info on the phone, or will they open their ? Cheeky said. APhA also uses FaceBook and Twitter to push out content about the conference. Cheeky said that the organization will deploy more mobile apps in the future, but it is taking an analytical approach to development. We are trying to think big picture and long term, not getting an app for the sake of having an app, Cheeky added. 14

15 Case Study: Texas Credit Union League Texas Credit Union League Studies Custom Versus Off the Shelf Development The Texas Credit Union League (the League) represents nearly 600 of the state's credit unions, which in turn are owned by more than 7 million members. The League took an analytical approach to mobile application development, evaluating 35 mobile application vendors, and then releasing a RFP for custom development. Rich Grady, vice president of research with the League has a technology background, which enabled him to execute a comprehensive review of application vendors, evaluating products, technology and pricing. The League s goal was to be able to reach out to employees within member organizations. In addition, the League wanted to discover how it could better communicate and understand its members needs through mobile devices. The mobile app has turned into a communications tool that enables the League to reach out to key people in its membership. Problem: Our first step was to put together a small team to evaluate 35 vendors that were already developing apps for conferences and events. We found that they were coming from all over the place; there were all sorts of different flavors of vendors, Grady said. The League put together a punch list of requirements, wanting to see how much it would cost to purchase an event app that was feature rich. For the basis of its research, the League decided to price the use of a mobile app for two conferences a year. We found that if you asked for any functionality not on the vendor s standard app list, it increased the expense. If you want a my schedule as part of the app that was an additional cost, and it typically was very expensive, Grady said. If you wanted mapping for two purposes, one to highlight local attractions, and the second map customized as an exhibit floor app to highlight and map vendors based on topic, that was an additional cost. Solution: Grady recalls concluding that the off-the-shelf app vendor approach was not right for the League, after looking at our requirements, the conclusion was that we would develop our own app. We gathered a bunch of developers together and gave them our requirements; the price to build one application was equal to renting it for a year. 15

16 Case Study: Texas Credit Union League (Continued) Case Study: Texas Credit Union League Studies Custom Versus Off the Shelf Development Grady said his team discovered that app vendor bids for one app cost between $27,000 to $52,000 per event, and he figured the annual cost for two events would be $70,000. Grady said he considers the mobile app a success; 20 percent of attendees downloaded the app and the heads of member companies loved the app. The application is active 60 days before the event and 60 to 90 days after, and we sell advertising to offset the development cost, Grady said. In addition, Grady can make enhancements to the mobile application for minimal investment; to redeploy the app for a new event he can use in house graphic designers to re-skin the way the app looks for a new event. The League spends about $8,000 annually to add enhancements to its app. In addition, the League wanted to discover how it could better communicate and understand its members needs through mobile devices. The mobile app has turned into a communications tool that enables the League to reach out to key people in its membership. 16

17 Mobile Apps a Natural Extension for GuideBook Vendor View: App Developers Sees Steady Growth in Business. We talked to several association application vendors to explore positioning, perceived market direction and business models. These vendors primarily specialized in event apps, developing off-the-shelf solutions in varying levels of sophistication and pricing. The industries we see [the most app development in] are predicable, groups that deal with computer programming and developing, anyone in the tech industry, and we see a ton in financial industry conferences using mobile apps. Alan Blank, GuideBook, Director of Marketing Developing mobile apps was a natural growth path for GuideBook. We do guides to events and spaces where you need a guide, we specialize in that niche. We see the most development in conventions and trade shows, we specialize in the event space so we are biased in that sense, said Alan Blank, GuideBook director of marketing. Guidebook provides three packages for the development of mobile guides/event mobile apps. The packages range from free to $5,000 per event depending on level of support. The three tiers of services enable customers to obtain a mobile app with limited capabilities for free. We are seeing a lot more small associations using our apps. I think that this is in large part because companies like us have made it much more affordable for associations that don't have millions of members and huge conventions, Blank said. Associations can spend between $10,000 and $30,000 for a custom app that has a limited shelf life. If used for an event, most users delete the app once the event is over they no longer need access to the information, Blank said. Guidebook delivers off-the-shelf options that have some of the same features as custom apps. We are at least as flexible as those who develop custom apps, Blank said, adding, It is amazing that some developers charge $20,000 for an app and still limit feature sets. They limit section types and how many sections you can add. GuideBook does not limit features, our business model is different. We save money by developing the features once and applying the code across the apps. Guidebook s clients benefit each time the company enhances an application. 17

18 Mobile App Development Leads to Rapid Growth for a2z Vendor View: a2z Transforms Biz to ebiz a2z delivers marketing and management solutions for expos and conferences; it provides software and services to 350 clients that manage 750 large size shows annually. The company launched its mobile applications three and a half years ago, since then it has added more than 650 events to its portfolio. The association market accounts for about two-thirds of a2z s clients, and it sees the use of mobile apps in the conference space growing. We transform biz to e-biz, and mobile apps are one way of distributing the content. Clients use us for a complete management system, real-time info publishing, running the show Web site, onsite kiosks and rich content publishing, said Rajiv Jain, a2z president and CEO. a2z does mostly off-the-shelf apps for conferences across many different industries; Jain said that some industries are already using mobile applications as a part of their day-to-day business so using a mobile app at a conference is natural. Some progressive organizations are marketing their apps better and are finding better traction. Surprisingly their events don t have to be in the tech space, Jain said. Some progressive organizations are marketing their apps better and are finding better traction. Surprisingly their events don t have to be in the tech space. Rajiv Jain, a2z, President and CEO The medical industry is already using mobile devices to update patient records, and that behavior is extending to the trade show floor of some medicaloriented conferences. However, I would not treat the medical and healthcare as an outlier in the area of mobile. We are seeing heavy equipment machinery and manufacturing trade shows gaining traction in mobile and tablet usage, Jain said. Similar to other mobile application developers, a2z s conference mobile app is purchased to use for one year. However, Jain said, The shelf life [of the mobile app] is short; it is synchronized with the event. The relevance is right before and after the show. The pricing of a2z s product depends on the size of the event; the mobile app costs between $5,000 and $15,000, which includes event promotion before and on-site at the event. There is a good return on investment, and often you can find a sponsor for the mobile app, Jain said. 18

19 Core-Apps Expands Mobile Apps Beyond Events Vendor View: Core-Apps Helps Associations Drive New Business In three short years Core-Apps has gained a lot of traction with its trade show mobile application business; the company has 150 corporate clients and provides mobile apps to 500 trade shows run by 270 clients. Jay Tokosch, Core-Apps president said a key to being a mobile apps provider in the association space is to take time to talk to clients about their goals. For example, a trade association client said show exhibitors want to engage more with attendees. To address the need, Core-Apps added an exhibitor module to its mobile app. The module publishes booth staff schedules and enables attendees to set up meetings with booth staff via the app. From an event standpoint, we are trying to engage exhibitors and attendees, and enhance attendee-to-attendee interaction through the mobile app. Clients want a long-lasting mobile app, and they want it to be loved beyond the show, said Tokosch. We wanted the Member Direct app to be a membership driver. Jay Tokosch, Core- Apps President Continuing to generate interest for a mobile app after the event is over is a challenge; most association staffs take a break when the event is over, and then they go directly into planning the next event, said Tokosch. While trade show producers tend to forget about the mobile app once the event is over, attendees continue to use the app. We continue to track mobile app usage after the event and on average, our events only see 7 percent of the apps being deleted off of phones, Tokosch said. There is a trend among associations using mobile apps to create additional apps to enhance member engagement in other programs. Core-Apps saw the demand and developed the Member Direct mobile app to support associations other member products. The Member Direct app is tied into the event app and Core-Apps can secure the app for member-only access. Core-Apps focus is on off-the-shelf products. I think most associations cannot afford a custombuilt mobile app; custom can cost up to $50,000. There are people like us who do a great template that make the app look like the client s own, Tokosch said. We have two off-the-shelf apps, Follow Me, our flagship, built around large expos and conferences; it runs between $12,000 and $18,000. Our Event Link app is geared more toward smaller trade shows and conferences. It costs from $2,500 - $5,000 and runs on all platforms, Apple, Android, Blackberry and Web, Tokosch said. 19

20 Top Association Mobile App Vendors Three vendors were most frequently identified with existing association mobile applications. Collectively, these three vendors represented 25 percent of applications in our sample: Mobile App Developers Come in all Shapes and Sizes» Core-Apps LLC, Boopsie, Inc., ChirpE (a2z Inc., Core-Apps represented the plurality of applications within the sample. All three of these vendors were primarily associated with meeting and event-oriented applications. Other vendors identified in our sample as providing mobile applications to associations were (alphabetical order): Arctouch Blue Toad Dub Labs Epro Direct Guidebook iengineering Mediasite/Sonic Foundry MeetSmart Mobile Medica/Digital Acumen Multibriefs/Multi View Inc. Shearwater Marketing Shuffle Labs Siteworx Vivastream Copyright 2012 One Orange Feather Inc. 20

21 Future Association Investment in Mobile Applications Forecast in Mobile App Development Market One Orange Feather projected the future value of mobile applications within the association marketplace. As a first step, the number of associations by budget level is estimated. We started with the ASAE figure of 1.3 million trade associations, professional associations, philanthropic and charitable organizations. We divided these non-profits into budget categories based on form 990 data compiled by GuideStar. The vast majority of nonprofits are small organizations with budgets of less than $1 million. Our methodology assumes that the market for commercial mobile apps will come almost exclusively from associations with annual budgets of at least $1 million. This approach yields a non-profit marketplace of about 111,000 organizations (for simplicity, we will refer to these organizations as associations ). We forecast meeting apps and non-meeting apps separately. Association Meeting Mobile Apps Forecast Based on our survey sample, we estimate the percentage of associations with meetings by budget level, the number of meetings per association by budget level, and the existing number of meeting apps in 2012 per association with meetings. [meeting defined] A U.S.-located event (foreign located events were excluded) Small committee meetings and council meetings were excluded We generally only included meetings that were large enough to support some type of Web presence. When calculating the number of meetings from our sample, we used a definition that we believed to be most applicable to the use of mobile meeting apps. We defined a meeting as: A U.S.-located event (foreign located events were excluded); small committee meetings and council meetings were excluded; and we generally only included meetings that were large enough to support some type of Web presence. 21

22 Meeting App Development Costs will Decline Future Association Investment in Mobile Apps Investment in Mobile Apps by 2015 By 2015 the market for meeting application development is estimated at $319 Million Associations with budgets >$100M will have 2.5 mobile apps. Associations with budgets from $1M - $5M will have.15 mobile apps. App Development Cost Associations with budgets >$100M will spend $10,000 per app. Associations with budgets of $1M-$5M will spend $4,000. We generally only included meetings that were large enough to support some type of Web presence. We applied a non-linear growth rate to the growth of the past three years to derive the growth in meeting apps per association with meeting by budget level. This methodology results in a 2015 forecast of about 2.5 meetings apps per association with meetings in the group of associations with budgets of more than $100 million. By contrast, associations with budgets from $1 million to $5 million will have about.15 apps per association with meetings. This reflects the lower revenue and meeting size in this group. We forecast average meeting application cost to decline over the next several years, particularly for the smaller-budget associations. This reduced cost will be driven by the increased use of standard module-based meeting apps at low entry-level prices. Accordingly, we base our revenue calculations on a sliding scale of cost/meeting app ranging from $10,000/app for associations with budgets of over $100 million, down to $4,000/app for associations with budgets between $1 million and $5 million. This methodology results in an association meeting application market of about $319 million by

23 Non-Meeting Mobile App Forecast Investment in Non-Meeting Mobile Apps Investment in Non-Mobile Apps by 2015 The estimated market for non-meeting mobile apps is $487 million by To forecast non-meeting mobile apps, we determine the current penetration of non-meeting apps by association size based on our sample, and then apply the same non-linear growth rate that was used for meeting apps growth. We apply the average applications per association with apps based on our sample. While the number of applications per association with apps should grow over time (associations with nonmeeting apps will add additional apps over time), we have forecast this ratio to be relatively stable, because of the large number of single app associations added to the base during the forecast period. Projecting cost per app is particularly difficult for non-meeting apps. To the extent that these apps are custom-developed, industry-oriented apps, the cost per app will be high likely over $20,000. However, to the extent that the apps deployed are off-the-shelf GIS apps, the cost will be very low under $5,000. We have applied a sliding scale of cost per application ranging from $20,000 per app for the largest associations down to $5,000 per app for the smallest associations. However, an adjustment to cost must be made to non-meeting apps to account for the fact that many non-meeting apps are single-year investments, or initial investment and modest maintenance cost. Non-meeting apps are in a period of very rapid growth, so most single-year investments will be in their initial cost year. We estimate that 22 percent of non-meeting apps will be in their first (investment) year of use in 2015, and assume that 50 percent of apps are investments without recurring fees. 23

24 Associations and Mobile Apps by Segment: 2015 Investment in Mobile Apps by 2015 Investment in Non- Mobile Apps by 2015 Meeting Apps will account for 40 percent of mobile app expenditures. Associations with budgets between $25 million and $100 million will represent an overwhelming portion of mobile app expenditures. Our methodology results in a market for non-meeting mobile apps of $487 million by In aggregate, the association mobile apps market should become an $800 million business, still in a rapid growth stage by Meeting apps, which benefit by a compelling ROI, declining prices due to standard offerings and recurring annual fees, are projected to reach $319 million annually. For associations with greater than $5 million annual budgets, most of their primary shows, including annual conventions, will be supported by mobile apps. For the largest associations, those with budgets greater than $100 million, mobile apps will support multiple shows per association. Meetings apps will represent approximately 40 percent of all association mobile app expenditures. Non-meeting apps are composed of high-cost, custom apps, low-cost, standardized apps and recurring cost apps that will often be sold as an extension to meeting apps (see discussion of Core-Apps business offerings). Collectively, this mix of apps will represent 60 percent of association mobile app expenditures. 24

25 Associations and Mobile Apps by Segment: 2015 Investment in Mobile Apps by Association Segment Share of Mobile App Market by Association Budget, 2015 One Orange Feather Inc. $1-5 Mil. 6% $5-25 Mil. 8% $100+ Mil. 11% $ Mil. 75% Associations with budgets between $25 million and $100 million will represent an overwhelming portion of mobile app expenditures. These associations are fertile ground for mobile apps for several reasons: There are a relatively large number of these associations, particularly in comparison to the largest associations which have annual budgets greater than $100 million. The $25 million to $100 million category represents more than 40 percent of associations with budgets greater than $1 million. They have a large number of meetings per association, making them a prime candidate for multiple meeting apps. They already have started making significant investments in mobile apps. The apps sold to these associations will be deeper apps and relatively more expensive than those of smaller associations. We project that approximately three-quarters of all mobile app expenditures will be made within this group of associations. 25

26 Association Mobile Apps: Key Findings Association Mobile Apps: Key Finding Associations are in the early, high-growth stage of mobile apps: Mobile apps have become common in the association market only since A number of the leading vendors in the association mobile app market have only been in existence for three years. Penetration of associations is still relatively small only 22 percent of our sample. Only among associations with budgets greater than $100 million do the majority of associations support mobile apps today. Mobile apps for associations will go through a period of rapid growth and innovation. New functionality and pricing models will be introduced each quarter. Association executives need to stay current on app functionality and pricing models. Meeting apps lead adoption, but there is a growing diversity of mobile app functions: Mobile apps supporting meetings and conventions are the leading application today, although they represent less than half of total apps in use. However, a range of other functions are already commonly implemented, including news and information, publications and journals, and industryspecific apps. These apps may be marketed as membership apps, or advocacy and public relations apps. Business models range from single payment to annual contracts. The buy or build decision: Associations can buy an off-the-shelf product, hire a development company, or develop an app in house. Hiring a developing company and developing an in house app requires the ability to develop functional and technical specifications and manage technology development (see discussion in Developing a Custom Application). Many associations will not staff this capability in house. To program the app in house also requires appropriate IT staff. While many larger associations will find the in-house option provides greater flexibility and control over cost, most associations will find they can meet most, if not all functional needs, through off-the-shelf and modular products. Investment in mobile apps is more than initial cost. It would be a mistake for associations to assume that purchasing an annual subscription for a meeting app at $6,000 per year means that the cost is $6,000 per year. Other variables include customization costs, costs to promote the app and data porting. Many associations are finding that they need to be more cognizant of the content needs of mobile apps in staffing, particularly when multiple mobile apps are supported. On the positive side, mobile apps can provide important sponsorship opportunities. Our research found that many meeting apps are sponsored for $10,000 to $20,000, often covering the cost of the annual subscription. 26

27 Association Mobile Apps: Key Findings Association Mobile Apps: Key Finding Mobile apps will grow to be a significant IT line item for most associations in the next few years. In our survey of association budgets, we found that 55 percent of associations intended to include mobile development as part of their next IT budget. Twenty-five percent of our respondents indicated that mobile development would account for at least 10 percent of the next IT budget. While our budget survey is not statistically significant, it does indicate that many associations already are including mobile as part of the IT budget. Our forecasts of mobile app penetration indicate that most associations will include mobile apps as a significant IT budget line item over the next several years. Relatively large associations and certain industries will lead mobile app adoption. Large associations have clearly been early adopters of mobile apps. In 2012, over half of the largest associations already implemented mobile apps. However, the bulk of mobile apps will be implemented eventually in the second tier of large associations, those with annual budgets between $25 million and $100 million. Finance, Telecom/E-data, and Real Estate have all demonstrated early adoption of mobile apps. In addition, the Health/Medical industry is ripe for heavy mobile app investment due to their adoption of mobile technologies by industry members and the large number of associations and meetings in this sector. Association executives will face challenges keeping up with changes in mobile technology. Some of the association executives interviewed expressed concern about the speed at which technology is driving innovation. They are worried about investing in one technology today only to discover that in a year s time the market will be supporting another technology or device. The best way to avoid technology decision paralysis is to keep a focus on meeting member needs. Association executives should evaluate membership demographics and deliver technology options, such as mobile apps, in a form that members are familiar with, understand and will embrace. Want to learn more? We have a lot more data and case studies where this came from. Contact Andrew Roscoe at: [email protected]

28 One Orange Feather Inc. Marketing and Management Solutions for the Trade Association, Technology and Government Sectors One Orange Feather 1100 North Glebe Road Suite 1010 Arlington VA, Additional Studies by One Orange Feather: Sub Brands and Micro Web sites Use by US Associations 2012: Benchmarks and Best Practices» Social Media Use by Associations» Web Site Benchmarks and Best Practices for Small and Disadvantaged Government IT Contractors» 28