Inside Mobile Marketing

First off, did you notice the iPhone icons on the sample image??! A closer look reveals that nearly all of them are exact copies. Engadget has blown the image up so you can see the Chinese characters.

Placing cloning discussions aside for the moment, try to imagine a world where large numbers of teenagers are carrying mobile phones equipped with projectors. The vision of influential teens displaying an MMS, mobile internet page, video clip or unique application on their school locker with a major brand located somewhere for an audience to see is intriguing. The “I want that too” viral quotient could be off the charts and the idea of a moving billboard becomes a reality. Viral video and social networking also would get a big boost.

(NOTE: If you think mobile advertising reporting is tough now, tracking impressions in this sort of scenario would be an extremely difficult to say the least.)

This concept along with my previous post on leveraging mobile SD cards for marketing purposes are just two examples of how fast mobile technology is evolving and thus creating new marketing opportunities via the handset. Granted we are still trying to figure out SMS and banner ads, but the future looks promising!

That’s a lot of phones with removable memory slots! Of course the real trick will be educating consumers on actually purchasing these cards and using them, but that’s up to smart merchandisers and to some extent companies like SanDisk to figure that out. I can’t imagine the Carriers are thrilled with the concept of pre-loaded memory cards as it potentially cuts them out of application download revenue share and data usage fees, but nevertheless the concept has potential to spur consumers to utilize their handsets for more than just phone calls.

There have been companies (SEE ROK Media) that have loaded content onto mobile memory cards in the past, but the uptake to my knowledge has been negligible in a retail scenario. A good sign that this concept might work is that the practice of “sideloading” content, especially music, has had very good traction - especially outside of the States. Consumers, primarily youth, have discovered the cost savings associated with downloading and sharing music while bypassing their Carrier’s networks.

Marketers, especially those targeting Generation Y consumers, might start experimenting with mixing mobile content such as music or games with utility applications (e.g. the Kellogg’s Exercise reminder) that showcase the brand being promoted. Rest assured that their will be unique advertising opportunities within the memory card as the developers have significant control over the card’s actions.

Media companies dabbling in Mobile today may view mobile storage cards as yet another distribution outlet for their video content. I can certainly envision NBC packaging a special “OFFICE” SD Card filled with short snippits of the show’s best bits.

Interesting, but certainly not a shocking prediction given the rapid adoption of smartphones here in the U.S. and the increase in promotions from the Carriers for low-cost, flat rate data plans. However, there are a couple of things to consider when thinking about whether or not Mobile Email will be a next BIG thing that marketers will need to pay close attention to with regards to optimizing the consumer experience on a handset.

First of all, email users will need a data plan of some sort and Nielsen Mobile recently pegged the percentage of consumers with an unlimited data plan at 14%. The research firm also stated that 95 million (37%) subscribers paid for mobile internet access either as part of a subscription or transactionally and that 40 million subs were active users of mobile internet (used at least once in a given month).

There is an important distinction to make within the aforementioned numbers in that they don’t represent (at least I don’t think they do) those consumers accessing email via emails readers from say Good or Blackberry versus their mobile browser. It’s safe to assume that most corporate users are accessing email via a reader versus a browser, but as MMetrics noted, the smartphone penetration rate is close to 7% within the U.S.- This number isn’t exactly huge, but there is data that supports that these users are heavy users of email via their devices.

From an overall addressable market, MMetrics stated that 13.1% of wireless subscribers had used email on their phone during a specific time period and Nielsen Mobile stated that eMail was the second most visited category (on the mobile web) after Portals. Again, were not talking huge numbers, but significant enough to warrant a closer look at the consumer experience.- (NOTE: as of May 2008 Yahoo! had 14 million unique visitors to their mobile mail page according to Nielsen.)

I did some quick testing of some HTML emails via my Yahoo! email account on Nokia’s S60 browser, Palm’s TREO 750W browser and an Openwave browser via Verizon’s popular LG VX8300 handset. On each browser HTML gets stripped out and the rendering is not easy on the eyes to say the least. I even tried GMAIL on the Treo browser and some of the hyperlinks within an HTML newsletter were rendered inactive. On the reader side, trying to read HTML emails via a Blackberry reader or Palm reader produced equally frustrating results.

From a marketer’s perspective if you are targeting an on-the-go business crowd or a demographic that utilizes smartphones, it may not be enough to assume that handset OEMs, browser developers, internet email providers and email reader vendors will utilize tools and transcoding tricks to properly render your campaign emails properly. Your message may be lost and deleted before the consumer ever has the chance to re-read your email on their PC.

That said, there are some companies such as Pivotal Veracity that offer to optimize your emails for the various device types and email readers. (This company has some interesting comparison shots of how html emails render across a handful of different devices including Blackberry, Palm and Windows Mobile.)

Quick Anecdote: when attending industry events such as CTIA or MMA or presenting to advertising agencies it is always fun to watch a decent number of users fumble around on their smartphones when you ask them to participate in a demo via SMS. They have gotten so used to sending short emails back and forth between other smartphone-toting colleagues that TXTING is now an afterthought.

Regarding the use of a QR code reader to help spur impulse shopping. I like the thought, but have a series of thoughts surrounding the consumer adoption challenges.

• 2D code readers, while numerous, are almost non-existent in the U.S. market with regards to being pre-installed on any handsets. There are some high end NOKIA’s such as the N95 that ship with a QR code reader, but the mass majority of handsets sold through the Carriers including those from Blackberry and Apple do not ship with a reader. Now, the good news is that you can download readers for various cameraphones capable of downloading a J2ME application (which is most phones today) including popular smartphones from Blackberry and Apple. (Checkout Scanbuy’s reader for Blackberry’s Pearl and Curve models OR visit your iPhone APP store for their just released iPhone 2D code reader.)
• That said, Polo or rather their advertising agency, is going to have to work pretty hard to educate consumers on what the funny looking black and white codes are for on their print materials. The call-to-action is KEY! Changing consumer behavior is not easy especially when it comes to seemingly complex technical items on the mobile phone. Just getting consumers to download the 2D code reader is a challenge in itself as various industry studies all point to consumers being leery of potential hidden costs when using new mobile applications (e.g. video, mobile web, MMS).
• Polo will also have to spend to drive traffic to their new mobile site just to encourage their viewers to download the QR reader. It will be interesting to see what tactics they employ to get some early adopters to the site - e.g. coupons, dramatic cost savings on advertised products, etc..
• In terms of getting help from Carriers and other big tech companies to drive awareness for 2D codes, I know that Scanbuy was recently involved with SPRINT in a public trial of their reader, but I have not seen any recent news from the other Carriers yet (rest assured they are evaluating the technology because it leads to increased data usage). Google’s Android will include 2D code reader functionality and Microsoft has said in the past it will try to play in this field as well.
• The 2D code market participants are also working to decide on some sort of standards. Currently, because of their prevalence in Japan, QR and Datamatrix code formats are getting a good deal of press. However, companies like Scanbuy, NeoMedia, BeeTagg and Nextcode to name few, have developed their own code formats specifically for use with the Mobile handset. (this is a story for another day ;-). Not all 2D codes readers read ALL codes, so standards are a must for widespread adoption. The MMA is assisting in helping these participants come to some sort for conclusion.

Please note that these aforementioned challenges need to be combined with getting consumers to use their mobile phone just to browse the web and be comfortable making purchases via their credit card on the mobile web - these are NOT easy obstacles to overcome and will take time, but Polo should be commended for jumping into the deep-end head first!

So what’s the hold up? One of the major hurdles to overcome is the ability of the wireless Carrier’s existing billing systems to process FTEU messages. Generally speaking, all messages sent through Aggregators for off-deck marketing programs are either tagged at a Standard or Premium rate and are processed accordingly by the Carriers. Technical changes need to be made by both parties - especially on the Carrier’s side.

In addition to technical enhancements, I suspect the Carriers need to map out the business processes for these FTEU programs. At a high level, the current process for off-deck messaging programs works like this: The Carriers receive messages via their Aggregators. These messages are “tagged” as either Premium (if they carry a charge) or Standard Rated. In either case, the Carrier is responsible for billing the consumer and/or debiting the user’s message allotment if the consumer has a messaging plan. For Premium programs, the Carrier will send the Aggregator a record of successful billing attempts and will pay the Aggregator their negotiated share of revenue. The Aggregator then pays the Marketer their share of revenue. Everyone is happy.

For Standard rated programs, the Aggregator more often than not simply tallies the number of messages processed via their gateways to the various Carriers and charges the Advertiser/Marketer the pre-negotiated messaging delivery fees. (NOTE: I am aware of only one major U.S. Carrier that currently charges their Aggregators for Standard rate messages (MTs only) once a specified threshold is hit. Another major Carrier has stated it is well within their rights to charge for Standard MTs, but has yet to enforce this.)

The FTEU business model poses some interesting challenges and questions. A possible scenario will have Advertisers/Marketers negotiating FTEU message delivery rates with their Aggregator (assume the Carriers will have special rates for Aggregators as well for these programs). Unlike the current Standard rated process, the Aggregator may be forced to reconcile these FTEU messages with the Carriers especially if the Carriers are charging per MT and/or monitoring the delivery of these messages on their end - all of which requires manpower and system changes.

QUESTIONS FOR FUTURE: what happens when Advertisers want to run FTEU programs that establish a 2-way dialogue with a consumer - who will pick up the tab for messages sent by consumers (MOs)? What happens when Marketers start inserting advertisements in their FTEU messages and the Carriers want a cut of the advertising revenues?

SIDE NOTE: I am aware that one of the major Carriers is working on their FTEU business model now and we would hope to see something from them by the end of 2008.

 

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.

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.

Here’s a running a list why we haven’t seen more Cross-carrier MMS Marketing Campaigns in the U.S. to date.

• Carriers have been slow to open up MMS infrastructure for off-deck A2P applications 
• Aggregators - usually waiting on the Carriers - have then had to configure their gateway interfaces to manage the new message format.
• MMS infrastructure has cost the Carriers a good deal of investment dollars. Thus the costs to run MMS campaigns are ultimately higher than SMS.  Not all Carriers - SPRINT specifically - have stated that they are NOT interested in powering Standard Rated MMS marketing campaigns over their network at this time. This means negotiations will ensure as to what payment terms will change their mind to let a particular program run over their network.
• MMS costs those consumers without a full data plan or a big bucket of messages more per MO & MT than SMS - sometimes as high as 25 cents per message.  PLUS because MMS requires a data connection - data charges can accrue as well for the consumer.
• There have not been a lot of turnkey tools announced for marketers to build out SMIL-based MMS programs.  Plus, I can’t imagine there even a lot of developers in the U.S. that very skilled in developing rich MMS campaigns yet using XML-based SMIL.

The good news is that all of the Tier 1 Carriers and the many aggregators supplying them with off-deck marketing programs are moving (some faster than others) to get their systems set-up to launch MMS MO based programs.  This will certainly spur more Social Networking an i-journalism programs -  SEE CBS Mobile’s recent launch of their EYEMOBILE website - in which users can upload video from their mobile phone via an MMS shortcode.

What really excites me as a marketer are the MMS MO use cases that come from the Image Recognition Technology camp.   The two big U.S. players in this space are MOBOT and SNAPTELL and both companies offer advertisers the ability to “mobilize” their existing traditional print, outdoor signage, packaging, even TV ads (although technical issues are inherent here) by simply allowing a consumer to take a picture of say a company logo OR an entire print ad in a magazine and send it to a shortcode via MMS.   The company’s servers then identify which marketing program the image is aligned with and triggers an appropriate MMS MT or SMS or WAP Push.  This means that marketers don’t need to modify their existing creative other than to insert some sort of call-to-action for consumer to snap a picture and send it to a specific shortcode.  This technology basically enables advertisers to insert a direct response mechanism in their traditional ad units. 

In terms of marketers creating Application-to-Peer based MMS campaigns - the tools are slowly emerging. PLEASE NOTE that dealing with MMS is trickier than SMS in that not all handsets support the same MIME types that may be included in an MMS deck - such as audio and video formats.  ALSO - the U.S. Carrier networks may have different guidelines on MMS running through their network such as the maximum payload size of each message (I believe usually capped around 300K per msg).. ALL OF THESE MEANS MORE TESTING will be required both on the part of the vendor and marketer to ensure the user experience is as consistent as possible across a wide variety of handsets.  I’ve experimented with a self-serve MMS composer toolset from Massachusetts-based CellySpace.  Pretty slick app, but as the website indicates it is still in BETA and there of course some bugs to be worked out.