Mobile : Look Before You Leap

Good direct marketing leads to better mobile marketing ROI

June 2009 By Jay B. Wilson

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When then presidential candidate Barack Obama used text messaging to announce his selection of a running mate, the event signaled a coming of age for mobile, particularly short message service (SMS), as a direct marketing channel. That the content of the SMS announcement—Joe Biden of Delaware was Obama’s choice—was trumped by leaks to the traditional media made the method of delivery no less significant. The campaign successfully used a promotion to build an opt-in mobile database of more than 3 million supporters with whom to communicate and motivate for the longer haul.

This approach—leveraging promotions to build express opt-in databases of customers and prospects—is an effective way to harness the power of mobile and integrate it into your direct marketing communications.

With more than 213 million SMS users in the U.S., and mobile penetration expected to reach 93 percent by next year, mobile marketing has begun to play a key role in acquiring and retaining customers across industries.

Major retailers successfully have used the mobile channel for several years, building databases through sweepstakes and promotions and then generating significant ROI through ongoing couponing and drive-to-retail campaigns.

The results, within the framework of direct marketing metrics, have been impressive. Mike Romano, co-founder, managing partner and EVP of SmartReply, a mobile marketing provider, reports that clients have seen open rates exceeding 95 percent and coupon redemption rates of as much as 26 percent. With a cost per delivered message around 10 cents, the ROI can be significant.

It’s easy to blindly jump into mobile marketing simply because you want to get into the game—and to do so is ripe with pitfalls. Following best practices, rooted in direct marketing principles, increases your odds of success.

Building a Direct Mobile Marketing Database
How best to integrate mobile into your communications stream? Gaining express consent from your existing customers is a good starting point. Assuming you have an accurate database of your current customers, those individuals should be the foundation of your initial mobile efforts.

A good way to do this follows the Obama model: Offer a tangible, short-term benefit of providing content, and then leverage that interest to obtain opt-in for your ongoing mobile communications. If presented with a tangible benefit, consumer SMS opt-in rates can approach 80 percent, particularly now that more people are joining unlimited data and text plans.

Additionally, you can acquire new opt-ins through targeted SMS ad network buys. This involves buying space—usually a 40-character “ad tag”—on subscription-based SMS services. Targeting can be done based on traditional direct marketing demographics and is a cost-effective way to expand the size and range of your mobile marketing database.