With cell phones more commonplace than computers and mobile devices—such as PDAs and smart phones—catching on quickly, it’s no wonder mobile marketing looks attractive to direct marketers. According to the Cellular & Telecommunications Internet Association, there are 203 million wireless subscribers in the United States, with 70 percent or higher penetration in most major metropolitan areas.
On the demographics end, this market trends younger, with most wireless subscribers between the ages of 13 and 34, cites mobile market research firm M:Metrics Inc. But the 35 to 44 age group continues to expand its use of these devices year over year.
“What we are seeing is the majority of users on mobile campaigns are in that 13 to 34 age demographic, but that is starting to skew upwards as campaigns become more and more relevant to consumers. So now you can target a broader age range … depending on what campaigns are being launched,” says Laura Marriott, executive director of the Mobile Marketing Association (MMA) in Boulder, Colo.
Marriott points out that as consumers get more comfortable with mobile marketing, the number of campaigns is beginning to take off; mobile marketing went from a handful of campaigns in 2004 to thousands deployed this past year.
And marketers themselves are beginning to see the value of gearing their marketing efforts to keep up with this increasingly mobile populace. “The idea of time-targeting and place-targeting your message into somebody’s pocket has tremendous [appeal]; the challenge is making your message so relevant that it’s acceptable and welcome to the consumer,” asserts Mike Baker, CEO of Enpocket, a New York City-based global mobile media company.
Marketers may choose from a few different types of mobile marketing formats:
• SMS (short message service): better known as text messaging, which involves a prospect keying a five-digit short code into the texting tool that signals the return of a text marketing message to the sender;
• MMS (multimedia messaging service): allows for both images and text;
• mobile video: allows presentation of video clips; and
• mobile advertising: linkable text or banner ads within other mobile applications.
The attractiveness of SMS or premium SMS—premium, because users are charged an incremental fee instead of a text charge, and the transaction involves the purchase of a ring tone, wallpaper or other service—is that it is the most ubiquitous format in terms of the number of handsets that support texting capability in the U.S. market, says Marriott. Specifically, she says, most research puts the penetration of texting capability at 80 percent.
Further, research and consulting firm Yankee Group estimates that about 15 percent of the 350 billion text messages exchanged worldwide monthly are commercial in nature.
Given that some of the other mobile technologies coming onboard—MMS, video—aren’t supported by the majority of handsets in operation, Marriott explains, their growth has been slowed. She anticipates these formats will see more of a boost next year, although some adventurous companies will give these types of marketing campaigns a try in 2006.
Enpocket’s Baker reports his firm is starting to do more video campaigns with four- to six-minute clips that feature offer screens at the end of the video that look like SMS. Because it’s rich media, he says, these campaigns make more of an impact than text messaging does.
For companies that simply want their ads to show up around content that another non-competitive company has delivered, there are ad insertion opportunities. Mobile search offers marketers the ability to deploy ads on the handset’s Web display. Selling real estate is limited with these ad vehicles, Baker explains, so you’re basically offering a call to action in the form of a text link or simple graphic. But because it’s display media, you’re taking the opt-in requirement out of the equation.
Marriott explains that mobile search still is in its early days, as carriers are evaluating search solutions to offer carrier-branded search. As the MMA and other parties work to develop standard definitions and guidelines for mobile search, she expects this environment to be more of an advertising player in 2007. She also predicts that the model for mobile search will be similar to that of Internet search, where it’s free for users and supported by advertising. According to a recent study conducted by the MMA, financial advisory firm Piper Jaffray puts global search revenues at $11 billion by 2008, a 100 percent leap over 2005 figures.
A New Interaction Mind-set
While well-targeted SMS campaigns can enjoy response rates above 30 percent, says Baker, the trick lies in creating an integrated effort that leverages your existing media buys to develop a list of double opt-in prospects and then following up with a contact approach that continuously resells the audience on the value of mobile communication.
The best example of a value proposition failure in the mobile channel, he offers, is that of a consumer packaged goods company that sent him a daily recipe that used its soup products. “I know people who like soup,” he asserts, “but I don’t think anyone wants a soup recipe a day.” Because the marketer didn’t consider the hassle factor of daily contact or provide the recipient with enough message control, Baker opted out of all further mobile communication from this company.
One way to personalize contact is by creating a contact preference database. For example, says Baker, Sprint subscribers can tell the telecommunications provider what types of mobile marketing messages they want, for instance, alerts on new hip-hop ring tones, delivered once a week and in the morning.
Marketers also are starting to develop profile databases of their mobile prospects to help them better target campaigns to attract more opt-in registrants and to convert more mobile interactions into mobile-driven sales. But Marriott explains this trend is in its infancy. It will take some time to achieve widespread adoption and thus yield any deep insights into the mind-set of the mobile marketing-friendly consumer.
Both Baker and Marriott agree that the best way for direct marketers to test mobile marketing’s effectiveness in reaching their audience is to integrate a mobile component into an existing marketing program. Use your existing spend on print, out-of-home, radio, television and other vehicles to incorporate a short code to entice a request for more information. For instance, an animal rights nonprofit could offer prospects a list of pet adoption centers in their city by texting a particular code. And because the codes are unique, you will be able to determine which channel is most effective at generating mobile contact.
Baker says there are some ad buys available on mobile channels, which offer marketers a chance to more easily test across different demographics and ad models. He notes that it’s important to consider your market characteristics when selecting different mobile marketing formats, since not every company can make its product or service appeal to the SMS-crazy, urban-youth market. But a banner ad for a travel and leisure product on a travel alert service might be just the ticket for reaching the mature, business executive.
Ultimately, mobile is an inexpensive channel, Marriott concludes, which provides marketers with opportunities to test and refine their messaging during and after the campaign to optimize the audience’s experience.