Inside Mobile Marketing

While these numbers are impressive and attest to the impact smartphones sales have had on various players within the Mobile Ecosystem, it is important for Mobile Marketers to remember that smartphones (especially Blackberries and iPhones) still represent a small percentage of the overall handset market in the U.S. and especially the World. Recent figures from M:Metrics/comScore peg overall smartphone penetration within the U.S. at around 6-7% of the total wireless subscriber base. On a global basis, RIM and APPLE combined only make up at best 1+% of the overall wireless subscriber market.

According to Gartner, Nokia is still king of the global smartphone market with 45% share of market and RIM follows second with 13.4% and Apple comes in third with 5.3% as of Q1 2008.

That said, marketers can certainly build campaigns that are targeted to and optimized for the Blackberry and iPhone toting crowd, however the greatest reach - especially with a younger demographic - still resides in targeting the lower to mid-range handsets in the U.S. from Motorola, LG and Samsung.

 

This should prove to be an interesting development within the Mobile Marketing community especially as premium off-deck revenue continues to decline and the demand for Standard rated messaging programs continues to increase. There’s already enough “tension” between content providers, brands, advertisers and aggregators with the collective group of Carriers over revenue share splits, message delivery costs, compliance regulations and potential MMS MO delivery costs. Now throw in the idea that each Carrier may possibly want a cut of the advertising revenues for messages traveling over their networks and you’ve got a bit of a maelstrom.

It will also be interesting to see the impact this pending development will especially have on the Mobile advertising players, mobile marketing providers that power Std. rated programs and of course the advertisers footing the bill for any ad campaigns. Suddenly the relatively high CPM rates mobile has commanded for SMS ads seem like a necessity with all extra hands in the cookie jar.

INITIAL QUESTIONS:

• will each Carrier outlay their own set of payment and reconciliation policies?
• will MMS carry different policies due to higher costs?
• will the Carriers share demographic information to improve targeting of ads?

DEJA VU:

I swear at times I thought I was actually sitting in the 2007 MMF event as the same overarching themes and comments emanated from the various presenters. Here’s a few popular ones:

1. “We really thought it was going to be the year of Mobile”. No doubt this will continue to be said during the next couple of years as well.
2. Multiple sessions were dedicated to Mobile Banner Ads and Mobile Internet sites and how to drive traffic to them whereas SMS/MMS Advertising/Marketing was ONLY given a 15 minute slot with 4Info’s CEO Zaw Thet. This strikes me as a bit out of whack as Mobile web browsing doesn’t even come close to the reach and consumption numbers that SMS possesses currently. (M:Metrics pegs mobile web consumption in the U.S. around 13.7% and SMS usage around 48.6%)
3. Mobile education still is required at the Agency and Brand level – Admob’s Tony Northcutt did make the important point that education is especially important at the junior planner and strategist levels as many top marketing executives have already bought into the idea that Mobile will be around for the long haul.
4. Mobile metrics still need to be improved – “we still don’t know who our visitors are,” said WWE’s Rene Rodriguez referring to this company’s Mobile internet destination pages.
5. The U.S. Carriers need to share more demographic information with advertisers. Fair point, but the Mobile Social Networking panelists said they are finding consumers are proving to be very willing to share personal information when asked. It’s worth a try.
6. The Mobile Ecosystem is still too complex to navigate. Lots of players, each with a niche and each wanting a piece of the dollar bill spent on a campaign. Don’t worry, consolidation will continue to occur and processes will get straightened out over time.
7. Success with Mobile comes in the form of an integrated campaign. Standalone mobile programs will struggle due to lack of reach, consumer awareness and budget.

QUESTIONS:

1. Where were the M:Metrics and Nielsen Mobile analysts to place the mobile marketing efforts into some overall context as to what mobile users are actually doing – what the trends are, actual reach of technologies such as xHTML browsers?
2. How come the MMA did not have a representative discussing the highlights of their 2007 Mobile usage study? There is some good data in that thing.
3. For a mobile marketing forum – there was VERY LITTLE use of mobile as a direct response mechanism to poll the audience during and after sessions or allow participants to trail demo programs
4. How does T-Mobile and Verizon Wireless get away with NOT having representatives on the main Carrier discussion panels?? These guys claim they want to build better relationships with the MMA and the various industry players and yet they skip the largest North American gathering. I don’t get it.

PLEASANT SURPRISES:

1. Sprint announced via a representative during an LBS roundtable that they would begin selling access to some of their demographic information for location-based services. I am still however in the dark as to what this data may entail (e.g. sex, area of country versus city, income levels, etc..) and how it may be priced. Nevertheless it’s a good sign though from a major Carrier.
2. AT&T’s Jordan Berman stated in his slotted panel discussion that his company would be launching its self-service ad-serving solution for its MediaNet properties. Stay tuned.

NEED CLARIFICATION:

1. Verizon Wireless’ Stephanie Bauer had a slide deck that stated that VZW had 8 million mobile internet subscribers. I’m curious to find out exactly what that means…i.e. are there only 8 million VZW subs paying for a mobile internet data plan? If so, that would represent a small percentage of their overall subscriber base AND I would venture to guess a large proportion of the total are business users with smartphones subsidized by their employers.

Can this become an issue within the Mobile Channel as well? Sure it could. The obvious correlation will be with the Mobile Search players - i.e. JumpTap, Google, Yahoo, Medio and InfoSpace - and how they manage this process within their paid Search processes and systems. 

As a Mobile Marketer, I’m a bit more interested to see how “piggybacking” will impact the use of KEYWORD-driven messaging programs especially within emerging self-service mobile messaging solutions. These platforms from companies such as; TextMarks, iVisionMobile, iamota, Mobivity, and Waterfall Mobile (to name a few) allow Clients to essentially select any keyword they desire as long as it conforms to a specific character count and is not already in use on a particular shortcode (which is usually a shared shortcode offered by the platform provider).

You can see where I’m headed here, right? In theory I could set up a Cross-Carrier SMS program on a shared-shortcode on any number of the aforementioned tools using the Keywords HolidayInn, or HoldayInn or HdayInn or HolidayInn7. I then could promote my keyword(s) a variety of different ways to spur some sort of consumer action e.g. send WAP push to trigger WAP page, send SMS/MMS ad, etc.

As I write, I can see where this is more of a trademark infringement issue at play, but nevertheless as mobile keyword usage gains recognition in the U.S. and more publishers and advertisers/marketers embrace the Channel, keywords will be valuable assets that ought to be closely guarded and monitored by all those in the Value Chain.

I attended last year’s NYC event and must say it was worth the trip to the Big Apple. The abundant networking opportunities with the who’s who in the industry goes without saying, but I was more impressed with the slew of lil’ nuggets of “insider” information provided by most of the sessions/speakers. For example, the co-founder of Zumobi Dr. Ben Bederson talked about how his research at the University of Maryland revealed that the majority of handset users preferred operating their devices with one hand versus two. Coca-Cola Executive Mark Greatrex said Sprite sells 10 billion bottles per year. Scanbuy’s CEO Jonathan Bulkeley said 2D barcodes can trigger 26 actions on a mobile phone (e.g. SMS)

This year’s event is again filled with accomplished Mobile entrepreneurs and seasoned marketing & advertising executives from some of the Nation’s top companies. Here’s what I’ll be listening for:

• What is the MMA doing to exert more pressure on the Carriers to minimize their continued practice of creating new and ever-changing rules that ultimately supersede the MMA’s Best Practices Guidelines? (This is perhaps THE most frustrating issue within the Mobile Marketing space as the mad scramble to appease individual Carriers and their program Audit firms places costly demands on vendors and marketers alike to change systems, promotional materials, etc.)
• Will more brands step up and disclose their actual campaign results. (Look, everyone knows that the numbers will be low and in most cases disappointing, but we have to remember that we are in an experimental phase with this nascent channel. We can learn from each other’s efforts.. that’s how this is going to work for all of us.)
• Will the vendors, publishers, marketers dealing in the mobile advertising space talk about things OTHER than banner ads this year. It was a bit ad nauseam last year and according to eMarketer messaging advertising is expected to account for 88% of all mobile ad spend in 2008. I do see that 4INFO and Quattro Wireless have some executives on the docket discussing SMS advertising and “other” opportunities.

That’s a lot of bluetooth-enabled phones in the U.S. installed base!  (Although it should be noted that the U.S.’ second largest Carrier, Verizon Wireless, has and still does cripple the data transfer capabilities of many of its bluetooth-enabled handsets. (OBEX File Transfer profile and or OPP - object push protocol) I believe Sprint has done this on a couple of handsets as well in the past.)  Thus, you would think this would have Mobile marketers drooling over the prospect of utilizing the technology as a marketing tactic a lot more than seen today. But we haven’t.

Yes, there have been a few high-profile bluetooth marketing launches in the past here in the States (SEE CBS and Land Rover) and companies like Kameleon Technologies and Filter-UK have built up some impressive Client rosters (they’ve been doing this stuff in Europe since the early 90’s), but I really haven’t seen or heard too much in the way of hard results. 

I would assume the take rates would be fairly low as this new technology can be a bit challenging for the average consumer.  For example, how many consumers walk around with their bluetooth set to “discoverable” to accept incoming pings?  I recall seeing some figures months ago (I think from the NPD Group as well) stating that most consumers don’t use bluetooth even though their handset comes with it and when they do use it, it’s overwhelmingly for use with headsets.

Certainly to make bluetooth marketing work you need to use it in the right venue - e.g. events, shopping areas, airports, etc.  You need to ensure the call-to-action is prominently displayed and easy to follow  (this includes ensuring the opt-in message that is triggered on the receiving handset is very clear as to what the user is “saying yes” to accept.  Also - avoiding blue-spamming is a very important consideration - most bluetooth marketing vendors are able to discern between users that have already participated in a specific campaign versus those that haven’t.   One last bit, the content being sent to a handset via bluetooth terminals should also be evaluated in any campaign as many phones have issues handling J2ME applications for example.

It’s certainly great to see that these aforementioned firms are embracing Mobile as yet another medium to leverage with their clients. Because this list is still very small, I believe that there is still a tremendous amount of opportunity for budding Mobile Marketing start-ups to align themselves with Agencies in a variety of different ways such as a technical alliance (SEE Velti and Interpublic Group) OR through acquisition (SEE Omincom and ipsh!).

In terms of organically growing a mobile unit - it’s a great idea, but finding talented mobile marketing professional who REALLY understand the complexities of the Mobile ecosystem from handsets, to MMA rules to consumer behavior patterns is easier said than done. You need people with this skillset to sift through the hype from various vendors, establish best practices and train eager employees on the ins and outs of planning and launching a mobile campaign.

 

I was unable to attend the event, but judging from the various articles from those marketers and press members that did attend it sounded like both sides or rather all sides (marketers, government and consumer watch groups) all brought up valid and thought provoking points.

As a mobile marketing practitioner however, what I was looking for is the FTC’s stance on the possibility of getting more actively involved in the regulation of the industry.  IF the FTC does get involved, you can add them to the list of those drafting ‘rules’ for marketers to abide by (SEE -  MMA, CTIA, MEF and of course the Carriers).   For now, however, the FTC looks content to continue to lean on the MMA and Carriers to set the pace, but will be keeping one eye open on the space as it evolves.  (Rest assured though that if complaints start piling up they will be forced to act.)

FTC Commissioner Jon Leibowitz was quoted as saying, “In an era of broadband and information services, the FTC will be watching and is watching closely. We strongly believe, as many of you know, in self-regulation, but we are also going to police the wireless space.” 

So mobile marketers, take notice.  The industry has the feel that things will only get harder in the short term with regards to ensuring software platforms, program briefs, business processes, etc. are in compliance with ALL of the various players before a SINGLE, common-set of guidelines is established (pipe dream?).  The Carriers especially are NOT sitting back idly waiting for the gov’t to start regulating their business practices - they have tightened their screws around their interpretation of the MMA Best Practices and their own ‘addendum’s’ to the MMA guidelines.

The interesting thing about these findings is not that only about 13% of U.S. wireless subs access their mobile browsers on a regular basis or even that some mobile web categories provide decent lift increases.  For me, the great bit is that Nielsen is striving to combine PC-based internet usage data with the mobile internet data to provide better insight into how the two can complement each other. This is the sort of data that would-be mobile advertisers are clamoring for and data that would-be mobile marketers and publishers alike can use in their arguments to justify their mobile efforts.

Along these same research lines it will be interesting to see the results from studies conducted by io global ltd (which has the support of the  Mobile Marketing Association) entitled the ”Three Screen” study and research from a joint effort between MMetrics and MRI.

The io gobal study will measure consumer usage across TV, PC and Mobile with the goal of deriving an “effective framework for assessing the role of mobile in integrated marketing campaigns. “

“ioglobal’s Three Screen Trial will be conducted in partnership with major media companies and advertisers. Advertising campaigns launched during the trial will integrate several mobile marketing tactics in use today such as banner ads, pre-roll, post-roll and in-stream videos, as well as SMS and pure content sponsorship. This launch will provide the mobile marketing industry with new mechanisms for measuring the role and effectiveness of mobile in integrated campaigns.”

The joint effort between MMetrics and MRI, announced at the end of March this year, attempts to provide greater insight into Mobile’s part in cross-media marketing campaigns.

All of this research means that advertisers (especially Media planners) will start to get the real consumer insight they have long sought from the Mobile Channel.

When you take into account that the 3G version of the handset is expected to arrive sometime in June and the Company’s expansion plans to penetrate additional global markets, it’s not hard to fathom that Apple will indeed achieve its well publicized sales target of 10 million units by the end of 2008. This is certainly great news for mobile marketers as it will continue to apply pressure on handset OEMs and mobile marketing vendors to improve the usability of their current products and solutions.

While the iPhone is very slick (yes I will probably want one too when the 3G version arrives Stateside) it is not without its flaws from a Mobile marketing perspective. Here’s a running list to date:

1. No MMS. Consumers can take pictures, but cannot send them via MMS. I am betting that MMS will be added via a future software update, but as it stands today this missing feature precludes iPhone owners from participating in MMS marketing programs. (although a marketer could allow users to send entries via email if they wanted)
2. No video recording. For mobile marketers thinking of leveraging user generated video content (UGC) programs in the near future - you can forget the iPhone bunch.
3. No Flash support in the browser. I guess we can say that it’s not really like surfing the internet on your PC. Also - the YouTube application is NOT using Flash video, but rather H.264 streaming video.
4. No downloadable 3rd party content other than from “App-Store” application (this even precludes ATT’s Media deck). Off-deck Ringtones, games, applications are not able to be downloaded to the iPhone. Apple’s recent announcement to allow 3rd party developers to create applications for the iPhone still must have their creations vetted by Apple and distributed via the “App-store” application on the handset - (Walled Garden of a different flavor). WHY is this an issue for marketers? Let’s take a TV-based pSMS sweepstakes program as a use case in which a television program charges a consumer for participating in the sweeps program. When a premium charge is involved, many Carriers are requiring that something of value be delivered to a mobile consumer after they participate. Something of value can be a ringtone, wallpaper or factoid. iPhone users would only be allowed to get something of value via SMS. This may not sit too well with some consumers as the industry is still reeling from class-action lawsuits that take this matter into account. ANOTHER issue for marketers is that they have YET ANOTHER content development and distribution process to adhere to. The resources, time and costs required to execute a widespread marketing campaign across the iPhone as well as other established (albeit fragmented) platforms such as BREW can be daunting to say the least.
5. No WAP Push. This commonly used method to distribute content and/or trigger to open a mobile internet page on GSM Carriers will not work with the iPhone. (NOTE - Mobile marketers can however send URLs embedded within SMS messages to trigger the opening mobile internet pages - content providers still out of luck however with downloads.)
6. No bluetooth marketing. The iPhone currently only allows bluetooth audio - i.e. headsets to be paired with it, thus bluetooth marketing techniques will fall on deaf ears.
7. No GPS. LBS mobile campaigns will have to rely on other methods to identify an iPhone user’s location such as Cell-ID triangulation, WIFI location- which the iPhone uses (SEE SKYHOOK WIRELESS) or via radiowaves. SEE below - what if WiFi broadcast terminals are not in a user’s vicinity???
8. EDGE data network. For those marketers that do not create optimized mobile internet pages for the iPhone, consumers browsing the web via EDGE can run into some longer than desired page load times - and anytime a consumer has to wait for something to load - especially on their phone - the marketer runs the risk of losing that consumer. Let’s face it.. WiFi is not as ubiquitous as we would like to believe it is.

So there you have it. I’m sure most of this list will be moot in the near future perhaps even in June with the expected arrival of the 3G version, but as it stands today Mobile Marketers should consider these points when creating tactical marketing programs that target iPhone users.