The ABCs of Mobile Marketing, Part 1

ClickZ
BY Laura Marriott | February 9, 2006

View Direct Link to Article HERE

Mobile marketing has experienced enormous growth over the past year because technology innovations have allowed us marketers here in North America to conduct campaigns across carriers. The industry also smartly created the means for brands to monetize the mobile channel and to make it fun for consumers, while enabling those brands to create and solidify their position with consumers -- and to make money. It's win-win.

U.S. mobile penetration now exceeds the similar penetration metrics for home Internet, cable, and computers. With wireless penetration reaching upwards of 70 percent in most major metro areas, wireless devices have become a ubiquitous communications tool and a channel for marketers ignore at their peril. Mobile allows brands to track campaign success, so-called brand interactivity. By including a mobile call to action in a given campaign (broadcast, print, outdoor, etc.), marketers can more accurately track response rates for specific campaigns or channels.

Mobile allows a brand or content provider to target subscribers with anytime, anywhere marketing. A consumer's mobile device is always on and always connected. That means always available. Brands can now access consumers when they're at home, at work, in the car, traveling, and so on. These consumers are in complete control of their mobile experience. When they choose to be engaged, they're more likely to want to buy. When integrated into a cross-media marketing communications campaign, mobile provides consumers with a flexible new medium to target.

For the non-mobile savvy, however, the terms and perceived complexity of the industry appear daunting. With abbreviations like "SMS," "PSMS," "WAP," and "MMS" and terms such as "mobile video" and "mobile advertising," how does a brand begin to launch a mobile marketing campaign? In fact, it's very simple. The key terms:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

• SMS (short message service): This is often referred to as "text" or "text messaging." It's the ability to send text-based messages person to person (P2P); from person to application, such as a voting application (P2A); or application to person, as with an acknowledgement or information (A2P).
• PSMS (premium SMS): Premium means the service user will be charged an incremental fee instead of the basic text charge. The transaction usually involves participation in a program, purchase of a ring tone or wallpaper, or something similar.
• WAP (wireless application protocol): WAP is simply the wireless Web. When you access an Internet session on your mobile device, you access via a WAP session.
• MMS (multimedia messaging service): Ever taken pictures with your phone and sent them to friends or e-mailed them? That's MMS.
• Mobile video: It's exactly what it sounds like: watching TV, music videos, commercials, and so on from your mobile device.
• Mobile advertising: Like Internet or TV advertising initiatives, this is the ability to offer a call to action or brand banner within the mobile application, whether it's mobile Web (WAP), text messaging (SMS), pictures (MMS), or video.

Consumers strongly fear being inundated with spam. Should you worry? No. The mobile industry has learned from the Internet; it's instituted guidelines and best practices that not only protect consumer experience and privacy, but also ensure the integrity of a publisher's data.

The time is right to get engaged in mobile marketing. The industry has experienced near-hockey-stick vertical growth. In the U.S. alone, text campaigns (SMS) have experienced approximately 200 percent growth (extrapolating from H1 2005 growth numbers) in adoption in the last year. No other marketing medium, not the Internet, out of home, or print, has experienced this level of adoption. And this is only beginning (text messaging is only one aspect of the mix).

Mobile allows brands that have relied on traditional channels to create a more direct, sustained relationship with consumers. Mobile Accord targets its mobile marketing business toward nonprofits (NPO). They now have a more cost-effective means to target subscribers.

"Mobile provides a far more cost-effective channel than direct mail or telemarketing campaigns, which have traditionally been used by the nonprofits," said Mike Ricci, VP of marketing at Mobile Accord. "More importantly, it creates an environment where donors are empowered to instantly respond the moment their empathy intersects with the NPO's call to action."

Mobile marketing is here. Entertainment brands know it; consumer packaged goods brands are on it; quick service restaurants and media companies are active. When are you going to take the plunge and add mobile to your mix? You can start slow, but start now.

Next: what we've learned from mobile marketing campaigns thus far and how to choose the right partner for your campaign and your business.

The Coming Year in Online Marketing
By Zachary Rodgers | December 19, 2005
ClickZ

View Direct Link to Article HERE

'Tis the season for weighty predictions. Each year around this time, ClickZ asks big brains in interactive marketing to gaze into the crystal ball and forecast what's ahead.

What follows are seven prognostications for creative, video, search and other important segments.

Creative :: John Rich, Interactive Creative Director at TM
Over 50 percent of all pages on the Web are consumer generated. I think what we'll see in '06 is less of the traditional linear marketing messages. The best ideas are going to be powerful ideas that we allow consumers to execute against. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Technology and the digital medium are allowing this to happen. The benefit from the advertiser's standpoint is the level of interaction with the brand. It's becoming part of your life.

A technology I think will have a huge impact this year is Flash 8. It's got some wonderful things going on. Its video compression is amazing. It's got transparent layers. What that means is we're going to have live video in a translucent layer interacting with people.

And then, this may be more like '07, another development creatively is going to be when all the DVRs are IP addressable. That's going to allow for some amazing creative delivery.

RSS :: Dick Costolo, CEO of FeedBurner
First, the tools for managing and measuring RSS subscription and reach will get far more sophisticated, providing marketers with a more detailed understanding of feed consumption.

Second, 2006 will be the year that RSS subscription gets shoved "down the stack". That is, more and more subscribers will not have to know that they are subscribing to something specific called an RSS feed. They'll just say "I want to subscribe to this thing with one of the apps I normally use everyday" and it will just work. People who subscribe to feeds will no longer need to know to look for the little orange button and right click.

Third, marketers will continue to trial a number of podcast efforts in an attempt to embrace this more immersive and high-bandwidth customer experience, and a breakout marketer will emerge that "gets" the time-shifted and subscribed nature of this new medium. This breakout campaign or approach will change the way marketers perceive what can be accomplished with podcasts.

Video :: Chris Young, Klipmart CEO
With the May 2006 TV upfront, we're going to see a shift of the media mix from television to interactive. Back in 2002 we had two percent [of budgets]. In 2005, I think we can honestly say we have five percent. I think we're going to see it bump up to eight percent. There's going to be a major shift.

We're going to see a lot of video assets move online. We're doing a lot with original video, and that's going to increase.

ClickZ: Do you think the shortage of in-stream video ad inventory will continue to be a large problem in 2006?

Yeah, I do. There's so much demand for in-stream advertising. We've got to put good content out there, and get people viewing that content. A lot of the big players are putting their content online. That's going to create a lot of eyeballs. But video's got to get cleaner, it's got to get easier, it's got to get more routine. [Video content owners] need to be technology agnostic.

Search :: John Lustina, Chairman of IntraPromote
PPC just keeps getting bigger. The budgets, which a couple years ago were difficult to come by, are now opening up, no questions asked. The onrush took some of the focus away from natural optimization for a while. People are realizing there's so much traffic to be had by natural, but also that if you're going to spend so much on PPC, you should invest some money to make sure you're getting the whole picture.

A big problem I see are the scraper sites. They really muck up organic results. It's not something that's going to be solved in '06, because that incentive is always going to be there.

ClickZ: Do you expect local advertisers to get much deeper into search?

I think it's going to take a little more time. Local most often means small business. One of the biggest budget expenditures for small business has been the phone book. I always think of that basic atomic element: the small businessperson who is terrified to move his money from the ad in the phonebook to spending it online. It's a real leap of faith.

Abuse :: Trevor Hughes, Executive Director of the ESPC
I think 2005 has been a warning shot across the bow for the marketing industry that third party relationships will come under greater scrutiny. In 2006, it will become absolutely imperative for marketers to understand how their offers, brands and products are being presented, wherever they're presented.

One of the things that's striking to me is that tiered marketing structures, and we could probably call them affiliate marketing structures, are fraught with risk.

In the case of Hypertouch media and Gevalia coffee, Gevalia had set up a relationship with some affiliate marketers... who were doing a lot of spamming. What ended up happening was that not the affiliate marketer but Gevalia was sued. Under the CAN-SPAM Act, it is the advertiser who is responsible. Affiliate marketers created real challenges for an otherwise upstanding brand.

In the telemarketing world, the FTC announced their largest fine ever against DIRECTV. DIRECTV had gone out and told their telemarketers: We will pay you per conversion. It was nothing DIRECTV was doing directly. They were not watching their affiliate enough.

We've seen it in online advertising, with Intermix.

E-mail :: Al DiGuido, CEO of Epsilon Interactive
One of the big ones I talk a lot about is customer optimization management replacing customer relationship management. The whole idea is leveraging the power of customer data to build more relevant communications with customers. 2006 is going to be the year the top-tier players leverage what they have in their customer databases.

It's kind of a segment-of-one communication, as opposed to geographic or psychographic segmentation.

Spam continues to be redefined as irrelevant messaging. In '06, this is all going to come home to roost. Unless you're relevant, you're going into the spam folder.

Mobile :: Nihal Mehta, ipsh! CEO
Integrated campaigns will be the future, mixing print, online, radio, street marketing, events, and the like. Time sensitive campaigns will also thrive, where users would have to text in to win within a certain period.

Direct response is taking off. Users text in to receive quick information on products, albums, movies and video games. Mobile coupons will continue to expand.

2006 will also be the year when small to medium sized enterprises will be able to use mobile marketing.

ClickZ: After years of hype, most of us have learned to expect less from mobile than its boosters promise. In terms of marketer adoption, what do you think is the worst case for mobile in 2006?

I would kindly disagree with your assessment. 2005 was a breakthrough year for mobile marketing. Many major brands experimented with the medium and many saw tremendous results, like Starburst and McDonalds. Even major agencies recognized the opportunity, resulting in key acquisitions such as ours by Omnicom.

The worst case for mobile in 2006 would have to be from some external forces or trends outside of the core conversions and commerce of the medium. For example, if a major mobile spam lawsuit broke the industry then that could be a worst case, but thanks to guidelines from the MMA and carriers, there is a low chance of this.

First Brazilian Mobile Marketing Book Released in English & Portuguese<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Last December 2005 was released in Brazil the first mobile marketing book written in portuguese by braziliam mobile marketers <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Paco Torras and Tatiana Albuquerque. Mobile Marketing – SMS as marketing tool is aimed to general marketing and advertising professionals still not familiarized with the possibilities and characteris­tics of the mobile marketing.

Paco and Tatiana run m-Direct, the first mobile marketing agency of the country, and put into the book all their experience in campaigns using mainly SMS as a marketing tool. As mobile marketing is stil begining in Brazil, they also quote international cases in order to illustrate the many formats and objectives of mobile actions and how it best integrate with others medias.

The book is completed with a glossary of terms, useful links and general information about the mobile industry.

------------------------------------------------------

Em dezembro de 2005 foi lançado no Brasil o primeiro livro sobre mobile marketing escrito em português pelos profissionais Paco Torras e Tatiana Albuquerque. Mobile Marketing – SMS como ferramenta de marketing tem como publico alvo profissionais de marketing e propaganda ainda não familiarizados com as possibilidades e características do mobile marketing.

Paco e Tatiana são sócios na m-Direct, primeira agência brasileira de mobile marketing, e colocaram no livro todas sua experiência em campanhas usando principalmente o SMS como ferramenta de marketing. Como o mobile marketing está apenas começando no Brasil, eles também citam diversos cases internacionais para ilustrar os diversos formatos e objetivos que podem ter as ações deste novo marketing e como ele se integra com outras mídias.

O livro se completa com um glossário de termos, links úteis e informações gerais sobre a indústria mobile.

Open Deck Prospects
Carriers are starting to resuscitate their mobile Web browsing with better user interfaces and easier navigation.

Wireless Week
By Sue Marek
December 15, 2005

View Direct Link to Article HERE

It's been more than six years since the industry began tossing around the phrases "wireless Web" and "mobile Internet." When the wireless Web was in its infancy, many companies focused their development dollars on designing wireless Web portals because they thought consumers would be spending time browsing the Web on their mobile phones. That concept was quickly stalled by slow network speeds, complicated user interfaces and platforms such as WAP 1.0.

Instead, carriers decided to make mobile content more accessible by designing decks where popular content would be listed and categorized, and consumers could access the content through a series of scrolls and clicks. Now, that top-deck philosophy is starting to change, and mobile browsing is experiencing renewed interest. Cingular Wireless recently relaunched its Media Net service, giving the company's approximately 30 million customers with Media Net-capable phones faster, easier access to information and entertainment services. The company touts the consumer's ability to access content in only one or two clicks.

Verizon Wireless also enhanced its Mobile Web 2.0 offering in November by adding more content to its lineup. Mobile Web 2.0 can be self-provisioned; customers simply register for Mobile Web 2.0 on their Mobile Web-capable handset and get access to information and content right from their wireless handsets. Mobile Web 2.0 is available for $5 monthly access, plus airtime.
Efforts to improve the user experience are getting noticed. "Operators are still trying to figure out how to get their consumers to access data content via the user interface," says Suzzana Ellyn, senior analyst, wireless services for Current Analysis. "The Cingular announcement is a step in the right direction."

Eliminating Silos According to Jim Ryan, vice president of consumer data products at Cingular, the carrier realizes it has limited its subscribers by trying to structure content and drive users to certain silos of content with menus. With the new Media Net approach, Cingular is treating the mobile phone like a personal computer. Similar to how consumers have their favorite applications and Web pages on their desktop, Media Net lets users create their own top deck of content. If someone wants to put Google or Yahoo! on their top deck, they can.

Eliminating those silos of content is a sign that operators are making the mobile Web experience more consistent with the PC experience. "Although this is rudimentary compared to Web standards, I haven't seen any other carriers with a willingness to let subscribers customize their experience," says Mark Donovan, vice president of products, senior analyst at M:Metrics.
Not only does this give consumers more freedom to find the content that they want, it also opens the door to more specialized and even local content. The local angle is key because most people want local news or local sports team scores. For now, Cingular is using its billing records to upload subscriber's ZIP code information, or users can key in a ZIP code if they are in a different city. However, Ryan says, the company envisions being able to tie in this application with location-based information so that subscribers can get specific city information when they travel.

Media Net uses a backward-compatible WAP 2. 0-based platform developed by InfoSpace. According to Steve Elfman, executive vice president technology and operations at InfoSpace, working with Cingular on Media Net was a huge endeavor for the company. "It's a WAP-based platform that we have made as easy as possible for the consumer," Elfman says.

More Opportunities Not only is Media Net a plus for consumers, it also may be a boost for content providers because it gives consumers better access to a wide variety of content, not just that which resides on the operator's top deck. Game publishers or content aggregators that have content with a niche appeal now will be able to find an audience for their content without having to worry about whether they can secure top-deck placement. "Content providers can offer more specialized content," Ryan says. "As long as it's good content that is relevant and can find an audience.:

”Opening up the opportunities is important because content providers without access to the top deck haven't had much success with their content. "Deck placement has been the whole enchilada," Donovan says. "Consumers that have a trusted provider of content that isn't on the carriers' top deck could not put it on their deck."

The time is right for Cingular to make this move because traditional operators soon may face increasing competition from high-profile MVNOs such as Amp'd Mobile and Helio that may embrace a more open approach to mobile content, Donovan notes. "Based on the markets these MVNOs are going after and their philosophical approach, they may give consumers more freedom with content. This is a good move for Cingular to get ahead of that curve."

Unraveling the wireless Web is no small feat for operators. Although the current iterations such as Media Net and Mobile Web 2.0 are steps in the right direction, figuring out exactly how to structure content so that consumers get the information and entertainment in an easy manner no doubt will be an ongoing endeavor.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Mobile Viral Marketing: An Event Waiting to Happen
By Tony Davis, Executive Chairman, Cascada Mobile<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

The explosive growth of mobile devices from niche to mainstream in recent years has resulted in increasing interest by marketers in this lucrative market.

Mainstream marketers are only beginning to explore options in mobile. While the most common mobile marketing campaigns use SMS, in Europe and Asia numerous brands are also known to provide mobile content and applications to customers. This encourages customers to interact directly with traditional marketing campaigns and extends brand reach. SMS and MMS coupons, logos, ringtones and branded games and applications are all used to various degrees depending on the campaign and desired result.

As the capabilities of devices in the market increases, it makes sense to take a more serious look at branded games and applications as a marketing vehicle. The improved user experience and interactivity provided encourages a much more engaging relationship.

However, running a mobile campaign is not an easy task for anyone used to the openness and general homogeneity of the browser-based Internet. The fragmentation of devices and the closed nature of the carrier networks, at least in North America, requires a considerable learning curve for the uninitiated. Carrier, industry association and government-instituted restrictions on marketing campaigns can create roadblocks and hoops through which marketers must jump. From the consumer perspective, these restrictions are not a bad thing - unlike the Internet, every activity in mobile costs subscribers money and protecting the market from unwanted charges has merit.

Viral marketing has considerable value in the mobile market as it takes advantage of the inherent nature of cell phones as communication vehicles, enabling people to share information and content within circles of friends and colleagues. By adding a viral component to branded applications, marketers can significantly expand campaign reach.

An Untapped Market

The opportunity presented by mobile marketing is exceptional – especially when considering analysts estimates that by 2009 the global wireless market will top 2.3 billion subscribers [source: In-Stat].

For brand managers, reaching a fraction of those global users is a dream come true, especially since the majority are consumers with disposable income and comfortable sharing information of interest with friends and business colleagues.

A survey by SKOPOS on behalf of I-Play however, reveals that only five percent of consumers have downloaded any game to a handset, while only thirty percent of mobile subscribers are aware games can be downloaded to mobile phones.  The same research also states that the majority of subscribers that have never used a mobile application would download content if a friend recommended it. 

With this type of research, it is clear to see that consumers require simplicity when deciding to embrace new technology for the first time.  It also illustrates the tremendous potential for mobile viral marketing. 

Mobile devices represent a potential gold mine for marketers with an opportunity to engage both customers and prospects on an ongoing basis. Marketers are just beginning to explore the opportunities that are available to them. Mobile coupons, branded games and shortcode contests are only the beginning.

Roadblocks on the Path to Revenue Generation

The advantages of direct access to something as intimate and connected as a consumer’s cell phone are great.  There are, however, a few regulatory and carrier imposed hurdles to rolling out viral marketing programs. These hurdles range from incompatibility of devices to licensing fees and geographical limitations for content delivery. There are also concerns that ‘cross-pollination’ between various carriers and the devices that each offers would entail costly infrastructure upgrades, to which few are willing to commit.

Mobile viral marketing does, however, have the potential to overcome one key challenge that marketers faced when embracing the Internet as a marketing channel for the first time in the mid to late 1990s.  Companies that tried to use e-mail with any level of success were constantly challenged to find the appropriate balance between value to the recipient and pure marketing (or spam). While carriers and government bodies have already created strong policies against mobile spam, information that is referred by a colleague or acquaintance through viral mobile marketing may not fall into this category.  Customer privacy is however, a critical consideration and must be taken into account by marketers to ensure that mobile viral marketing does not run the risk of an early demise as the result of a few ill-considered missteps.

Delivering on the Opportunity

The mobile world remains a virtually untapped marketing territory. And although downloading of mobile content has been slow so far, this promises to change in the near future. 

When the technology becomes available to enable the seamless sharing of content across devices and carrier boundaries, marketers will be able to push product and/or messaging to an unprecedented number of users, at relatively little overall cost.  This will create opportunities for limitless exposure of a product or brand across consumer networks.

In addition, organizations such as the MMA and others are taking a proactive approach in finding business and technology models that address such critical areas as consumer privacy and protection, monetization of carrier networks and access to customers by marketers, among other regulatory/logistical hurdles.

The Bottom Line

The concept of viral or peer-to-peer marketing has been proven to be highly effective in achieving a critical mass for top selling brands. With the right technologies and systems in place, there are no limits as to the revenue this type of model can generate in the mobile world.  

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About the Author

Tony Davis is a serial entrepreneur with more than 20 years of software engineering and product design experience, and an early pioneer in the mobile Java application space.  He is Executive Chairman of Cascada Mobile, a company that enables wireless carriers and content publishers to grow revenues through the viral distribution of mobile games and other applications. For additional information, visit www.cascadamobile.com.

How To Make Money With Mobile Marketing?
<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Michael Becker, iLoop Mobile CTO
December 18, 2005

Since the launch of the first SMS in 1992 and its initial commercial use for marketing purposes on/around 1997 many marketers began asking the question, “So, how can one make money with mobile marketing?” This is a very good question with many general answers; for example, it is easy to come up with an off-the-cuff response like “money is made from the sales of mobile content (ringtones, logos, images, video), premium SMS subscription (joke of the day, horoscope, sports scores, etc.), or micro-payments for physical goods and services”; however, responses like these are not actually answering the question above, rather they are answering the question “how does one make money through the mobile channel”. The mobile channel (a child born of the digital age) is used not only for distribution and commerce transactions, but also for communications, entertainment, as well as marketing. Future articles can help illuminate the myriad ways of making money through the mobile channel, but this article will specifically focus on the topic of doing so through the lens of the marketing function. 

 

In order to provide a precise answer to the question about making money with mobile marketing one must break the question down into its parts and define what is meant by “mobile marketing” and “make money.”

Marketing is the function that helps a company tell the market what it does and explain the company’s products and services, and in this role marketing directly helps a corporation make money. But again, this is a very simplistic answer to the question of how marketing makes money, marketers develop channels, educate customers, and stimulate customer response and mobile marketing is a very effective mode of marketing. As Kavassalis comments “SMS marketing [aka mobile marketing] has interesting properties: high-speed message delivery, interactivity, great customer reach, and a response rate five times higher than direct mail” (Kavassalis et al. 2003, p56). A campaign sponsor (Brand, Content Owner, Media, or Retail Property) will work with their Marketing Agency and Mobile Applications-Network partner to run Mobile or Mobile Enhanced Traditional Media marketing campaigns to stimulate a positive consumer response (see Figure 1). For instance, respondents just learning about the product or service may be encouraged to search for additional information by contacting the company through the mobile web, instant voice response (IVR), messaging, online, or at a bricks ‘n mortar store. Once the consumer responds to a mobile program and completes the information gathering step, if they are so inclined, the next step in the consumer lifecycle is to purchase. A mobile marketing campaign can directly influence a consumer to purchase a product or service via Mobile, Online, or Offline channels, or indirectly influence future purchases through any of these channels by engendering brand trust with the consumer, as shown by Nysveen and Merisavo (Nysveen et al. 2005, Merisavo et al. 2005).

Marketing on the Revenue Side
A consumer responding to a marketing campaign or purchasing a product based on that campaign does not necessarily guarantee that a corporation will make money. A company is “making money” when it generates profits. Simply put, profits occur when revenues exceed costs. Traditionally, marketing helps in-directly on the revenue generation side by effectively communicating the value of the corporation’s products or services, pricing them inline with market demand, and making various payment methods available to facilitate a purchase, such as Premium SMS, Credit Card, Pay Pal, Debit Card, etc. Marketers do not actually produce the goods or services or make the final sales. However, with mobile marketing, in some instance, the marketing campaign itself can generate revenue directly since the campaign can be an experience the users find valuable enough to pay for. Marketers can use Premium SMS, loyalty point programs, or other billing methods to charge the consumer for participating in the marketing program; they can also sell sponsorship and ad placement within the campaign experience. For example, TV viewers may be charged to vote, such as for the Big Brother in the UK, or the concert attendee may be charged to receive a ringtone and be entered to win a seat upgrade during the event. Also, marketers can sell and embed sponsorship or advertising directly into the campaign, including in the body of an SMS message, in an inline or interstitial ad on the mobile web or in an IVR based exchange, or by embedding messages within a mobile game for example. In fact, given certain situations, such as with sports related games, consumers are demanding these ad placements since it adds a more real-world experience to the game play.

Marketing on the Cost Side
Within the cost component of the profit formula, mobile marketing helps by creating cost efficient programs that establish brand awareness, generate leads, convert leads to customers, and enhance customer loyalty; mobile marketing can be very cost efficient. The ability to generate higher response rates than traditional standalone media is just one of the many unique characteristics of mobile marketing, and is an important piece to the marketing effectiveness puzzle. With increased response, total cost per lead decreases; moreover, mobile marketing respondents tend to be more qualified given that they are actively vs. passively initiating the interaction with the brand after seeing a call-to-action, thus making for a more effective program.  Finally, the variable cost for standard rate non-premium mobile initiatives is miniscule compared to traditional methods. In the case of high volume SMS programs delivering a message to a prospect can be as little as $0.00 per interaction with certain aggregators and channels but on average it is around $0.02~$0.05/message for moderate volumes, with commercial email services the cost per transaction can be as low as $0.01, while IVR services the cost per minute is around $0.07 and often higher, and the costs are even higher with traditional direct mail. Even Pay Per Click ads on the web are significantly higher than the mobile interaction, without the added time and location independent benefits of mobile.

In addition to recurring message traffic fees and application maintenance fees, marketers looking to use mobile should consider a few one-time costs, such as application access fees/licensing and possible professional service fees if the mobile application partner selected does not have standard templated solutions or if the requested campaign requires tailored message flow. In the short-term there will be some additional systemic costs that marketers must consider, such as industry regulations oversight and consumer education on the use of mobile, but these will abate over time as the industry matures. The costs of mobile marketing, however, when compared to regional or nationwide traditional media campaigns are often inconsequential to the overall program budget. 

A Phenomenally Valuable Channel
Mobile Marketing has one of the lowest variable cost per message, it is personal, and it affords the highest response rate. Moreover, we should not ignore the fact that mobile can turn any traditional channel into an interactive medium, thus enhancing the marketers ability to establish a long lasting and fruitful relationship with customers. This relationship, when properly managed, will increase customer revenue and value to the firm over time. The use of the mobile channel for marketing is just now coming to light in the U.S. and is maturing in other areas around the world. The benefits of mobile marketing have been recognized and not missed by leading brands. In fact, Pearse reports that according to Coca-Cola’s marketing Manager James Eadie "mobile marketing could be phenomenally important, when you look at the penetration of handsets and the passion the audience has for mobile…as a way of connection, it ought to be phenomenally powerful and more important than TV. So we should be spending 50% of our marketing budget within decades" (Pearse 2005). 

The stage is set for marketers to significantly add value to their organization more so than at any time in history. Marketers use mobile marketing for enabling unique and engaging one-to-one relationships with their customers. To be successful with mobile, and to make money, marketers need to be creative, invest the time to learn and experiment with different mobile and traditional media mobile enhanced campaign configurations, and apply their creativity to this immensely powerful new medium.

References
Kavassalis, P., Spyropoulou, N., Drossos, D., Mitrokostas, E., Gikas, G., & Hatzistamatiou, A. (2003, Fall). Mobile Permission Marketing: Framing the Market Inquiry. International Journal of Electronic Commerce, 8(1), 55~79.

Merisavo, M., Vesanen, J., Arponen, A., & Kajalo, S. (2005). The effectiveness of targeted mobile advertising in selling mobile services: An empirical study.

Nysveen, H., Pedersen, P., Thorbjornsen, H., & Berthon, P. (2005, February). Mobilizing the Brand. Journal of Service Research, 7(3).

Pearse, Justin. 2005       Coca-Cola Believes Mobile Ads Have Potential to Upstage TV. Electronic document. NWA. http://www.nma.co.uk/Document.aspx?did=da845be8-0ac0-49d9-8232-b5632ab552b4.

Rettie, Ruth, Ursula Grandcolas, and Bethan Deakins Text Message Advertising:  Dramatic Effect on Purchase Intension. Kingston University & BT.

<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Mobile – A channel not a strategy
By Troy Norcross, CEO Founder – Pocket Reach Solutions
http://www.pocketreach.com<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

In the recent article submitted by Mike Grenville on Wed, 13 Jul 2005 18:33, Big Brands Still Won’t Use Mobile it is discussed how many of the UK’s largest brands are unwilling to use mobile as a communication channel in spite of multiple case studies showing the true benefits.  What differentiates those who are reluctant to try from those enjoying success in mobile marketing is a fundamental shift in their traditional marketing paradigm.

The answer is in the objection
The top three reasons given for not taking up mobile as a channel were: 

·          Lack of consumer trust

·          Cost

·          Good-sized database of mobile numbers

To put this another way, “We want to send a message to as many customers as possible but we’re afraid they won’t like it (might think it is SPAM), it costs too much per message and there aren’t very many opt-in lists of numbers to buy.” 

Consumers don’t trust mobile because of they fear the problems of e-mail SPAM will be paralleled on their mobile.  Some early players in the mobile space took advantage of consumers who didn’t read all the fine print and made some of those fears very real.  Even now ICSTIS is investigating complaints about our friend the Crazy Frog. 

For these reasons, consumers are cautious in giving out their valuable opt-in permission. This is especially true consumers give permission to hear from other trusted 3^rd parties. This is how a database of numbers is created that is subsequently rented or sold.  In short, it’s the lack of consumer trust that causes there to be, at present, no good database of mobile numbers.

Many businesses are focused on the mass communications marketing paradigm. i.e. get the message to the biggest number of people possible.  Mass communications is the underlying strategy for most of today’s traditional marketing such as telemarketing, direct-mail, television, radio, print and out-of-home.  A common element of these channels is that each consumer is automatically opt-in unless they take some action to opt-out such as listing themselves with one of the preference services at the DMA.  Each of these mediums can stand alone and have an entire marketing program built around it. 

In contrast, mobile marketing requires permission to be obtained prior to sending the first communication (in the UK and EU – not in the US).  This one key difference applies to both mobile marketing and e-mail marketing and thus makes them poorly suited to standalone mass marketing campaigns.  Fortunately, mobile marketing can be used for more than just mass marketing strategies.

Mobile as part of the communications strategy

While mobile marketing may not be suited for a stand alone mass communications strategy, its role does have significant value.  As Ben King from WIN points out, “Businesses need to look beyond these barriers and really focus on how mobile can work as part of their overall communications strategy.” 

Where mobile has been most successful it has been integrated as part of traditional marketing campaigns.  Using traditional marketing, brands and marketers can communicate directly with the consumer and solicit opt-in permission to use mobile as a channel – and not just as an outbound channel.

Consumer Response Channel

Mobile is an ideal medium for consumer response.  In lieu of traditional post card or response mail, mobile allows a consumer to respond to the campaign instantly from wherever they happen to be.  No more manual data entry.  No more delays from postal mail.  Higher response rates because it is immediate and simple to do.  And with mobile users sending 86.7 Million messages /day and phone penetration rates exceeding 101% (more than 1 phone per person) in the UK it is practically ubiquitous.

With mobile as the response channel, brands can build a relationship with both new consumers and current customers.  Mobile can capture the same types of data as from a post card, from e-mail addresses to post codes.  And mobile can provide consumers instant feedback that their response has been received.  If offering mobile content as an incentive, this can be delivered immediately.  Mobile works as an excellent channel for consumer response.

Personalized dialogue

Developing a relationship with a customer is one of the most valuable – and challenging – tasks around.  Running a television or print media campaign offers only one way communication, whereas mobile offers consumers a means of responding instantly.  Mobile also offers consumers a new way to initiate communication for service, support, comment or other factors.  Messages sent to consumers can be personalized on the fly and communications can easily be directed to either automated or live customer response agents.  For consumers it’s better than waiting on hold and for service centres it is an easier way to manage call volumes.

The overarching theme is that mobile is a channel for personalized dialogue, not just one-way but two-way communication with a single unique consumer.

Timely, Relevant, Valuable and Requested (TRVR)

If a business is going to communicate with a consumer in a non-response way – unscheduled communication or communication not as a result from an inbound SMS from the consumer – there are three key elements to making this communication successful in the eyes of the consumer.  Ensure the content is: 

·          Timely

·          Relevant

·          Valuable

·          Requested

Timely
Make sure that the communication comes at a time when it is of most value to the consumer.  If sending sport updates, they should be during the game.  If sending out real estate information they should go out on Sunday afternoons as that is peak time for the property market.

Relevant
Make sure that the content is relevant to the consumer.  This implies that the business knows more than just the phone number for the message.  It is of little use to send a coupon for an oil change to a consumer who owns only a push bike. 

Valuable

Content can be valuable in the literal sense such as a coupon or digital content that the consumer can use on their phone – or it can be inherent in the fact that it’s information that is already timely and relevant.  Keeping up with your favourite sports team can have significant value.

Requested

It is vital that the campaign adheres to current legislation and regulation regarding opt-in and communications with consumers via their mobile phone.  The Mobile Marketing Association (MMA-UK) has its own code of practice and the Direct Marketing Association (DMA-UK) has a current working group – Mobile Marketing Strategy committee working to outline best practices for mobile marketing.  

The location factor

One further challenge in meeting the Timely, Relevant, Valuable and Requested model is the location factor.  It is of no use to me to know that my tube line is closed for repairs if it is 2:00 AM and I’m in Seattle.  Today, mobile technology will allow for broad based location information such as whether or not the consumer is roaming at the time of attempted delivery.  And more detailed location information can be made available (also permission based) to the point that you could send offers that were unique to a given event, such as free ring tones for everyone attending a concert at Wembley stadium.  Location is a key element to successful mobile marketing programs of the future.

Mobile is a channel, not a strategy

Italians raise €11M in Tsunami aid via SMS Scheme (684M UK Texts)

Live 8 generated 2.8 Million texts in the UK (28 Million globally)

The AA saves £30,000/month using text messaging to help reduce call centre load

Mobile marketing works…

When businesses change the focus from developing a strategy for mobile mass marketing to one of understanding how mobile can enhance existing marketing by adding a dynamic and interactive consumer response mechanism and then continuing the communication offering consumers a personalized dialogue – only then will the objections fall away and businesses start to reap the rewards of mobile marketing. 

Mobile Marketing Entrepreneur

Don Peppers:<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

1:1 Marketing Goes <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Mobile

As an influential thought-leader whose groundbreaking books include, Enterprise One-to-One: Tools for Competing in the Interactive Age, and Return on Customer: The Revolutionary New Way to Maximize the Value of Your Customers, Don Peppers advises a Who's Who of international marketers – AT&T, Ford and 3M, among others – who count on him for insight on using technology to build unbreakable customer loyalty.

But that proposition is about to become increasingly complex – and powerful – he says, as the convergence of wireless technologies and global positioning systems transform the notion of reaching customers where they live.

Author Rick Mathieson interviewed Peppers as part of a series of exclusive, Q&A-style interviews with some of today’s top marketing and business strategists for the book, BRANDING UNBOUND: The Future of Advertising, Sales, And The Brand Experience In The Wireless Age (AMACOM Books, July 2005). The following is an edited excerpt of that interview.

Rick Mathieson: How will mobility change our idea of what constitutes the “brand experience?”

Don Peppers: The most compelling aspect of mobility is the continuous management of evolving relationships with individual consumers. You can be continuously connected with a customer, not just when he's sitting in front of a computer. You can actually get feedback, and real transactions, on a real-time basis – it’s as if you're tethered to your customer's life. And that means there is tremendous opportunity in using mobility to increase the value of each customer, and your value to him or her.

Today, most of us can barely imagine life without a cell phone. Consumers are getting used to always-on communications, and those communications are gaining utility. As a result, companies that provide services and maintain relationships with customers are going to have to participate in this channel. And yet, companies are going to have to do it in a way that is non-intrusive, because nothing will give a customer a bigger red face with respect to a company than if that company begins to interrupt him or her in order to try to sell them stuff.

Our central mission becomes finding ways to increase short-term profits, while promoting behavior that increases the long-term value of that customer. It happens when we earn the customer’s trust, treat the customer the way they’d like to be treated, and actually act in their best interests in a way that’s mutually beneficial.

For instance, if I'm AmeriTrade, and I have a customer who trades three or four times a day when he's in his office, but he doesn't trade when he's traveling, I'd strongly consider giving him a Black Berry and a wireless trading account. It's win/win for both of us. The customer gets convenience, and the company gains potential new revenues.

RM: Many think mobility will enable further disintermediation of services. But you envision the rise of ‘Digital Aggregation Agents’ that enable companies to deliver 1:1 services based on my needs and location – as long as they play by my rules. What's the business model for these DAAs?

DP: Instead of giving out personal information to every vendor that I might deal with in the mobile medium – my news service, my broker, my concierge, my travel agent – I'm going to want one entity that remembers my preferences and needs, but that provides me anonymity.

One entity that knows my account numbers for all the different companies I deal with, across a lot of different platforms and different mobile media. And that entity is something we call the ‘Data Aggregation Agent.’

The DAA is going to simplify the consumer's life because it will save them a great deal of time and energy. I'm not going to want to fill in my speed dial numbers, my friends’ names and email addresses, my credit card numbers, my social security numbers, my everything, for everybody. The DAA will store all that information for me in one place, and then partition out data to companies as I see fit. It's just a hypothetical, science fiction possibility, of course. But I think it's a compelling new business model for the future, and could have a tremendous impact on the nature of competition in this medium.

RM: You’re talking about some pretty valuable information. Seems like a lot of companies would fight over playing the role of DAA.

DP: You bet they will. Already, there are a lot of infantile battles going on among businesses that all think that they can be Data Aggregation Agents.

But in the end, everybody can't win. The most compelling business model is one where the consumer gets the value. And the value I'm getting if I'm a consumer is convenience, relevance, and not having to fill out the same form or keep track of different account numbers. So there are a lot of reasons why the Data Aggregation Agent model is going to work. That role could be filled by a wireless carrier like Verizon. It could be filled by an airline. It could be AOL or Yahoo. Or it could be filled by completely new

players.

RM: As wireless moves into the in-store experience, what opportunities will there be to maximize the experience for customers?

DP: I think RFID technology, in particular, has a great deal of potential for that. The future of RFID is that I have my credit card in my wallet, I walk into the grocery store, I put a bunch of shopping products in my bags and I walk out the door and take them home, and I’m automatically billed for them. I don’t need to stop at the check out counter, and I don’t have to do anything but walk out with my products. I think that will be highly desirable for consumers. But there is a big-brother aspect to the technology that is awakening some of the Luddites in the business, who say, gee, I don’t know if I want companies tracking every movement that I make, and so forth. But I think on balance, consumer convenience is going to be the trump card. That said, whether it’s in-store, our out in the world via [RFID or] consumer cell phones, companies will have to be very careful about how they apply wireless technologies.

In this medium, you're playing with fire when it comes to privacy. It's impossible to architect the regulatory structure in such a way to ensure that you're not going to get hit with some kind of privacy problem.

The best defense is to adopt a holistic view of your business. In my conception, every business would visualize their service in terms of treating their customers the way you'd want to be treated. The golden rule of marketing, if you will. With that in mind, you simply can't go wrong.

RM: The same applies to 1:1 mobile marketing, no doubt.

DP: If you're driving down the street and an ad comes on because you're a block away from McDonald's, you're going to be extremely irritated.

But unlike a lot of folks, I don't think that means push is going to always be excluded from people's requirements – as long as it's pushed at the customer's initiation and doesn't trespass on the legitimate use of their time.

For instance, if I execute a trade on my cell phone, and you're my online brokerage, I don't mind you piggybacking an ad for an offer I might be interested in at the bottom of an order confirmation. Or if you're Amazon, you might recommend an additional book based on my profile. Or American Airlines might send an email about cheap tickets I can buy because they haven't sold enough seats to the locations on my preferred destination list.

I can see a lot of potential for that kind of push message – as long as the customer say's it's okay to send them. Because whether we're talking about an ad message, a service, or a transaction, it's all about using mobile technologies to add value to our customers' lives based on what they want, where – and when – they want it.

If you get it right, you win big. If you get it wrong, you're history.

For the complete Don Peppers interview, and other exclusive Q&As featuring Seth Godin, author of Permission Marketing and All Marketers Are Liars; Tom Peters, author of In Search of Excellence and The Brand You 50; Christopher Locke, author of The ClueTrain Manifesto, and Gary Hamel, chairman of Strategos and author of Leading The Revolution – as well as the inside scoop on marketing’s new mobile age – pick up BRANDING UNBOUND today. Wherever books are sold. www.BrandingUnbound.com

“BRANDING UNBOUND is an indispensable guide to the emerging opportunities in wireless marketing. Rick Mathieson has given us a forward-looking perspective that succeeds in being both visionary and grounded in reality.”

– Ingrid Bernstein, Senior Vice President, Director of Creative and Strategy, iDeutsch, NY

“The road map to the right now. Provocative. Up to date, to the last nanosecond.”

– Steve Simpson, Partner & Creative Director, Goodby, Silverstein & Partners, SF

Available wherever books are sold

www.BrandingUnbound.com

Purchase from Amazon.com here

Adapted from BRANDING UNBOUND: The Future of Advertising, Sales and the Brand Experience in the Wireless Age © 2005 Rick Mathieson, Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission. All rights reserved. http://www.amacombooks.org.

Mobile marketing in Russia

At present the Russian mobile marketing is on the rise. As compared to 2000, the number of mobile users has increased by more than 10 times. According to iKS Consulting (http://www.iksconsulting.ru), in July 2005 the number of mobile subscribers exceeded 102 mln persons. This upward mobile trend is being maintained: the country penetration level amounts to 70.8%. In May 2005 the RF cellular operators subscribed over 3.95 million persons.

Russia is a country of a vast range of operators where some regions have two or five parallel mobile networks. The mobile penetration is several times deeper than that of the Internet. The most common mobile communications standard in Russia is GSM 900/1800. According to iKS-Consulting, the share of this standard in the general subscriber base totals 98.2%.

SMS is the most commonly used technology used by 70% of mobile phone owners, according to statistics. In Russia MMS is not regarded as a widely used service. However, Promo Interactive Agency proactively cooperates with certain mobile operators and manufacturers to promote this technology. As of now, the Agency and the LG company are conducting the first national mobile photo contest «PhotoWOW» (http://www.fotowow.ru). Another summer 2005 contest called “My moment of fame” was held together with Megafon, one of the «Big Three» largest federal operators (click here).

Apart from typical SMS-solutions Promo Interactive Agency offers unique and popular services: Bluetooth (Bluetooth is used mostly in BTL-campaigns), WAP (the Agency was the first to commence large-scale advertising WAP campaigns in Russia).

Promo Interactive Agency is incorporated into a multi-media holding Next Media Group (http://www.nextmedia.ru); thus, it has a unique opportunity to offer their clients development of brand-name Java-applications and Java-games. The “Dom-2” (produced for the popular Russian TV reality-show) and “Night Watch” (based on a well-known movie and novel) games released by Next Media Group are especially popular in Russia.

Though mobile marketing is relatively new for Russia, it has attracted its own target audience. The first Russian mobile marketing campaign was conducted by Coca-Cola in 2001. Within the following years the different types of mobile marketing have been applied just by the large international brands.

The actual rise of the mobile marketing services was made in 2004 due to tremendous growth of the mobile penetration and the rise of interest on the part of FMCGs (mainly Russian brands). In 2004 the total mobile content market turnover (including a part of the mobile marketing) amounted to USD 310 million.

At present the Russian mobile marketing is booming with 5-6 large market players (apart from providers and aggregators). In general, over 100 companies offer some types of mobile marketing services. The most typical projects are: instant-win (package code registration), SMS-lotteries, SMS-contests, on-line services for the mass media (polls and contests for TV, radio and print press). The main technology applied is SMS.

Promo Interactive Agency forms part of the Next Media Group holding (http://www.nextmedia.ru) that ranks among first five market leaders of content services provided in the Russian Federation 1 . Besides, the Next Media Group operates everywhere in the RF and covers over 98% mobile subscribers.

Besides Promo Interactive innovation marketing agency, the holding includes:

	Technology and connectivity provider of new mobile technologies, covering 95% mobile subscribers.
	Next Media Entertainment – a production center specializing in creation of online projects for TV, radio, printed press and certain events.
	The largest Russian mobile entertainment products retailer (java games and applications, logos and ring tones).
	The leading producer of mobile games and other entertainment content and services.
	First mobile publisher.