At the recent Mobile Marketing Forum (MMF) in New York City, June 7th through the 9th some of the most forward thinking advertising executives came to explore ideas on mobile advertising and mobile marketing. The most obvious takeaways were that the mobile phone is going to be an increasingly important tool in marketing to customers and that there is a great deal of uncertainty about the full implications of this media shift. In this posting I will highlight the importance of the mobile phone for marketing, what are currently its advantages, and what it means long term for marketers.
The Smart Phone Wave
It was clear to everyone at the conference that the use of smart phones and high end feature phones is going to be common place. One of the presenter’s forecast was for 50% of the cell phone subscribers in the US to have a smart phone by 3Q2011. That is just over a year away. The need for a smart phone has reached average user as Best Buy has run an advertisement about “Smartphone Shame”. The inflection point for smart phone growth has been reached.
People on average spend a good deal of time on the cell phone. According to the Microsoft presenter of the three major screens PC, TV and mobile phone, mobile phone accounted for 27% of the time spend on the three screens. The PC accounted for 40% and the TV 33%. The phone is also the device of choice for the younger demographics of whom the advertisers want to reach.
Opaque View of Mobile Advertising and Marketing
At the conference it also seemed that advertisers and brands did not have a clear idea of how they were doing to take full advantage of this smart phone opportunity, primarily due to the fragmentation, semi early stage of market adoption, uncertainty around advertising ROI and inexperience with the mobile media vs. other media.
Mobile advertising and marketing has been around for 5 years now so some aspects are clearly understood like the smaller screen means more focus and less clutter, mobile has a good click thru and response rate, the phone is with you all the time so location and time sensitive ads can be sent, and the cell phone is a good way to direct people to stores. Targeting is somewhat problematic because in some cases brand and agencies do not know what they are getting for their ad dollars. A number of companies like Apple, Bango, Openwave, Nielsen, and Millennial Media are working to provide better targeting solutions for brands and advertisers. Beyond straight advertising which is expected to get its kinks ironed out brands, companies and advertisers need to look deeper in terms of what a mobile phone means to consumers and how to use the phone to invigorate company- consumer relationships.
The audience at the MMF voted that personalization will be the most important context aware element in 10 years. The cell phone is clearly a very personal device and this is good and bad for agencies, companies and brands. The good part is that they can target to the individual level and get stronger customer interaction. The bad news is that it is going to take more resources to be relevant to the individual consumer as well as be responsive to that consumer’s needs. It creates a different relationship where the customer expects more but the reward of customer loyalty can be created. In this time of customers requiring control of their virtual relationships, easy opt-in and opt-out capability is required. On the plus side opt-in and opt-in databases also allow for better targeting. In sum the cell phone makes the relationship between the company and customer more involved and possibly more rewarding if done correctly. One of the companies that works in this area of improving customer relationships over all communications channels including mobile is Knotice. (www.knotice.com)
Fragmentation is here to stay. That includes different smart phone operating systems, apps. vs. mobile web, MMS, and SMS. It was a sign of maturity for the mobile advertising industry when companies like Disney and Microsoft mapped the customer segments with phone types so that they could better plan advertising campaigns. It is the companies that can understand the phone technology, what it can do, and who to partner with to reach the audience they want that will best take advantage of the fragmentation issue.
One company which takes advantage of a number of existing technology factors including penetration of MMS phones, unlimited messaging, and viral market is Mogreet (www.mogreet.com). They send MMS movie clips, commercials, and greeting cards which users can forward to their friends. Mogreet also gives users the capability to respond to the ads and are able to create user databases. A couple of other aspects work in their favor, the youth market has unlimited messaging due to the SMS craze and young people prefer video messages. Microsoft claimed that 37% of people who saw a movie trailer on their phone went to see the movie.
One of the aspects that is holding mobile advertising back is the lack of commerce compared with the PC advertising. The tablet will probably be more akin to the PC in this regard. Mobile web sites have to make the shopping experience on the mobile phone easier and more enjoyable. At the end of the day mobile will probably not be used for shopping as much as other devices and it will be used for shopping in a time of urgency or convenience. In addition, the mobile phone will be used more for a communication device with customers rather than a means of commerce. That is why integrating mobile with other forms of advertising is so important. But to encourage people who wish to shop on their phone one click shopping would be a big help in this regard. Billing Revolution has a one click billing service for mobile web sites. www.billingrevolution.com
Brands are salivating to deliver coupons or ads onto a mobile phone when customers are in the store. But the success of in-store mobile campaigns has not been high. How do you get people to be jazzed about this? Under the coupon redemption strategy it is easier for the store and the customer to use the current barcode and loyalty card method. Brands can offer in store coupons for special products to special customers but the best results are likely to be yielded via the store loyality card. The customer sees a coupon while in the store or before going to the store, clicks it on the cell phone, and when the item is scanned and the card is scanned the discount comes up. Working with the store web site also gives the customer a good place to store the coupon information. A company which does this for a number of grocery stores is Zavers (www.zavers.com).
Couponing can also be done on a one off basis via a barcode reader or a camera taking a picture of a number but with multiple items purchased it can become more cumbersome. This type of coupon redemption or ticket reading is better for recording one off redemptions like train tickets or percent discounts off the total bill.
One of the often forgotten elements of customer interaction on a mobile phone is the camera. This can be used as a way to engage the customers via barcode, number reading, photographs or digital watermarks. Once customers become aware of this and some of its benefits companies can use this to initiate relationships with customers and drive sales primarily through other channels. The digital watermark company Digimarc (www.digimarc.com) uses digital watermark technology to show videos of cars to car enthusiasts after they had taken a picture of the advertisement. After viewing the ads the customer could also call for a test drive. This type of interaction with customer has been initiated with short codes and will continue to do so but the camera offers a more elegant and seamless way to start the conversation with potential customers.
Integrating Brands with the Fabric of our Lives
The cell phone is integrated in the fabric of our lives. This becomes even more so when someone is holding a smart phone. How easy it is to use a cell phone to improve our lives and how capable the phone is in terms of providing benefits will determine its success in mobile advertising and mobile marketing.
Currently people use a cell phone to communicate and check messages; kill time and be entertained; find information when it hard to get to other sources, or we are too lazy to get up from the couch; conduct transactions when we are away from a desk and when there is a sense of urgency; and to navigate to different locations. Finding where to fit brand messages and customer interaction into these various activities is where mobile advertising and mobile marketing will be most beneficial.