Catch-(20)22: Where Do Mobile Apps Go from Here?

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Anagog is a Street Fight Thought Leader.

Catch-22, the title of a 1960s novel, famously describes “an impossible situation because you cannot do one thing until you do another thing, but you cannot do the second thing until you do the first thing.” Initially coined to capture the absurdity of war, the term can also be applied to some of the realities of mobile app development as we approach 2022.

The role and importance of mobile apps have grown exponentially. Universal adoption of mobile phones has driven waves of innovation leading to almost unlimited possibilities and almost impossible expectations. Meeting those expectations means that apps need to offer feature-rich experiences that are super-relevant, personalized, and timely. This requires the collection of large quantities of data that is often private. However, users today hesitate to grant permission to apps to use such data, especially on Day 1. Without the data, how can apps generate the personalized experiences that, for example, will keep users engaged on Day 2? 

That’s the impossible situation apps are facing. In 2022, they will find their way out. 

Mobile phones and business: An evolution in 3 stages

Stage 1: The phones became smarter and the consumers more connected

Mobile phones started to get smarter, then people got smarter at using them so they used them more, and then the phones got even smarter and so on. Today’s phones are smarter than the computers that first sent men to the moon, and they can even support Artificial Intelligence onboard (Edge AI). Mobile networks support faster data, so consumers are “Always On.” The bulk of progress in the overall user experience has boiled down to the experience on mobile, due to the fast pace of innovation and the increasing penetration of apps.

Stage 2: Companies realize that a successful mobile strategy is good business

Once companies saw that their customers’ mobile devices were always with them and always connected, they quickly recognized the opportunity. They wanted needed to get closer to their customers, so their mobile strategy had to evolve and leverage their entire company. Once users experienced the combination of convenience (a phone always at their side) and function (apps that gave them a wide range of capabilities), usage went off the charts (aided recently by pandemic-induced lockdowns). And that is precisely the reason that mobile apps became such a key part of any business’ relationship with its customers and the reason they command a bigger chunk of the overall digital commerce pie. 

Stage 3: A Feeding Frenzy for Data

This spurred an aggressive push to know more about faceless mobile users for the purpose of creating more targeted messaging. Mobile phones, especially, could deliver a lot of information, which inspired a market frenzy for more data. Which data? Any type of data, from demographics to online browsing history to digital purchase behavior to app response times. Companies began to engage in “data hoarding” (storing data for far longer than it could possibly be useful), compulsively collecting data in the belief that if they only had enough of it, there would be a “big data enlightenment” that would reveal business-altering insights. The market value of this data was so high that some companies built an entire business model on sharing it with third parties. 

So, where’s the catch?

As mobile apps started to occupy a bigger space in our daily lives (and as app-centric companies grew in valuation), they received more attention and also came under a great deal more scrutiny. Researchers raised red -flags about the long-term impacts on kids and young adults from overuse of their mobile devices. Psychologists pointed out that the most successful experiences manipulated users with features that were scientifically-proven to drive addictive behavior. But the number one concern for consumers and regulators alike was the threat to their personal privacy. 

High Expectations (a.k.a. “The first thing”)

As a result of this evolution, B2C mobile apps (as well as the overall mobile strategy) have become saddled with more responsibility for a company’s overall commercial success. For the most part, the apps have been up to the task. First of all, devices have more capabilities and sensors to deliver more accurate readings that are sent to cloud servers that crunch petabytes of data. Thanks to the previous wave of digitization driven by e-commerce, mobile users can use their apps to perform almost any task they need, from shopping to paying bills to signing contracts, whether they are at home, on the bus, or at a party, with a few swipes of their fingers. And business models have also evolved to introduce more sophisticated monetization possibilities. 

So with access to past app and purchase behavior, combined with location and activity data and external databases, apps can devise multi-layered experiences that can be personalized and contextual. Cloud data processing can use location data to lure customers into shops, purchase history to offer the right complementary products for each and every one of them, and app analytics to determine the right time to send a message. It’s experiences like these that have marketers so excited about marketing technology.

Consumer Data Privacy (a.k.a. “The second thing”)

The problem is that regulators all over the world started to address data privacy concerns. New regulations defined privacy boundaries and mandated specific data-handling practices, backed by sanctions that can be enforced upon individuals that stand at the helm of offending companies. The industry started to take notice, realizing the need to make serious changes. The biggest players were naturally the ones carrying the largest target on their backs. Google and Apple, recognizing that a significant chunk of revenue was on the table, weighed in quickly to introduce technology changes to their mobile OS and policy changes to their app stores that were aimed at quelling the noise from consumers with minimal impact to the golden goose.

Many changes focused on declarative aspects; apps could continue doing what they were doing, just as long as they could point to consumer consent. ‘Permissions’ started to dominate the discussion around app development, and legal teams started to weigh in on which features could be developed. For the app stores, this tactic successfully deflected responsibility onto the apps, but created a backlash by making this a public issue. Consumers reacted predictably, rejecting new permission requests more often than not. Unfortunately, this has caused companies to run for the hills in order to avoid what looks like a public relations disaster waiting to happen. Potential exposure to privacy regulations has led to marketing paralysis, freezing innovations in personalization, location-based services, and the use of third-party data. 

The Catch-(20)22 casualties

It is the app developers who are finding themselves stuck in the middle. Customers value convenience and demand personalization. Moreover, they have demonstrated they are willing to accept the trade-off, sharing data with trusted companies and brands in exchange for value. But marketers must be able to show value and earn trust. With companies hesitating to provide an advanced, personalized experience out of concern for bad press and potential new regulations, there is small chance of that. Without getting value, customers are not likely to cooperate. Without the cooperation of customers, engaging personalized experiences cannot be created.

App developers are now expected to provide the most engaging user experience possible while dealing with frequent, often dramatic changes to personal data practices.

Below are a few examples of the high expectations app developers face and the constraints they face in trying to implement them. 

Expectations vs. Constraints

App needs to provide a beautiful, fast, device and OS-agnostic experience App must be optimized to avoid consuming too much data, bandwidth, or power.
App needs to provide a personalized, seamless user experience so marketing can promote specific content and offers to highly targeted audiencesApp cannot require the user to give up personal data because the legal team is afraid of the backlash.
App needs to offer hybrid, omni-experiences that bring together digital and brick-and-mortar points of saleApp cannot require location or activity permissions due to concerns about takeup and OS ‘warning’ pop-ups
App must hook users within 15 minutes of download, or none of it will matter and the app will be uninstalled within 30 days.Mandatory app store requirements complicate the onboarding, while revealing less information upfront.

Eluding the Catch: What to expect in 2022

Companies are discovering that the long-term solution out of this paradox is to reimagine mobile customer engagement and adjust their data practices to avoid collecting personal data. The complexity and risk of personal data compliance is too high, and the future is uncertain. It is better to keep the data out of their hands. How will such a solution provide a personalized experience without data? 

The solution is sitting right in front of their faces. Shifting data analysis onto the mobile device of each user is the path out of this impossible situation. Not only does it solve the privacy issue, it also makes it possible to enrich previously available data with much richer datasets, some of which are available immediately upon download. The stage has already been set in 2021 with advances in Edge AI that enable apps to run complex machine learning models on the device, generating personalized insights about the only individual that matters, the user of that phone. 

The race for mobile user engagement in 2022 is on, and there will be no compromise, either on privacy or on the quality of the mobile user experience. App developers cannot be left hobbled on the starting line with their shoelaces tied. The solution to elude this Catch-22 is to reimagine the parameters of the situation and make the impossible possible.

Sefy Ariely is head of marketing at Anagog.