Fortune 500 brands: Killer apps are more important than advertising

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Fortune 500 companies are spending big on mobile, but its not to buy ads.

As mobile ad blockers surge in popularity, the advertising industry has been forced to concede that a lot of people really don’t like their product.

The evidence is too clear to ignore: The minute Apple started allowing ad-blocking apps into its App Store, millions of people who hate ads enough to download a special app that blocks them did exactly that. This is remarkable when you consider how hard it is to get people to download new apps at all. (The average number of new apps Americans downloads each month is zero.)

During its Advertising Week event this month, the ad industry spent many a panel, presentation and party wringing its hangs over this troubling new existential crisis. How will advertisers reach their customers on mobile if their customers are blocking them?

But this was the wrong question to ask. Agencies, publishers and ad-tech execs should have focused on a different troubling reality: Brands don’t really want to buy their lousy mobile ads to begin with.

I witnessed this firsthand at a panel of Fortune 500 executives I moderated at the Tap Conference during Advertising Week. When I asked panelists fromWalgreens, Citi, 7-11, and Wal-Mart about their top mobile priorities, they said user experience trumps mobile advertising any day. Agencies and ad platforms might want to take note. They won’t have to worry about their mobile ads being blocked if they can’t sell any to begin with.

Here are their answers (slightly condensed). The full video is below.

Adam Kmiec, Sr. Director, Mobile, Social And Content Marketing, Walgreens: There is no greater in marketing in mobile than the actual product itself. And there’s nothing worse in marketing than the product itself. A horrible app experience, a horrible mobile web experience … is something that frustrates you, you uninstall the app, you won’t trust it again when there’s another release that addresses all the changes or fixes in there.

But a really, purely enjoyable experience — one that actually works the way it’s supposed to work — is, in and of itself, some of best marketing that is there.

Given a choice about where I’d put my next dollar, I’d put my next dollar into enhancing the actual mobile experience itself before I’d put it into another ad that’s going to tell someone about how great it is.

Maja Lapcevic, SVP at Citi Ventures: Our whole company was restructured under an amazing woman named Heather Cox, and it’s all about customer experience and the products that are driving it. As we said earlier, who goes to a bank anymore? You really need to be able to deliver on the experience. [We were among the] first apps that launched on the Apple Watch. That got us probably more attention than the billion or more [dollars] that we spend on marketing.

Raja Doddala, Vice President, Omnichannel & Ventures at 7-11: Product and experience is marketing. Using technology to make our experience more convenient is where we should spend our efforts.

Ojonimi Bako, Director CTO, Strategy and Operations, WalmartLabs: One of the luxuries you have in terms of being at a large company [is] there’s traction. So how do you direct and capture that traction and leverage it to provide a really good experience with the customer? That’s something we continue to work on, especially on mobile, to figure out how do we want to use ads in a way that is not intrusive but can also enhance the experience with the customer.

TAP Conference 2015 (#TAPCON) --Connecting Fortune 500s to the Mobile Economy from Button
Now read: The eyeballs business has a big mobile challenge.