Inside Mobile Marketing

The emergence of application stores built around a specific handset and/or operating system will only continue to create additional complexity within the Mobile Marketing ecosystem and will certainly add to the costs of developing and promoting custom applications that run on the various platforms.

Marketers already struggling to keep up with MMA/Carrier off-deck compliance regulations, application testing guidelines and emerging technologies will now be tasked with familiarizing themselves on who to turn to have custom app work completed on their behalf.  Perhaps more importantly, marketers will also need to uncover the best ways to advertise their new apps across the various distribution outlets.  Other considerations will include;

• SDKs, SDKs, SDKs= $$$ in terms of acquiring in-house development talent
• Analytics – reporting from the various storefronts will differ – some firms provide app usage analytics.
• Accounting for the disparate revenue-share agreements 
• Application maintenance, QA and hosting costs
• In-application advertising – how it works, what it costs, etc..
• Merchandizing costs at the various outlets
• Nuances of storefront vetting process – especially with Apple.

SIDE NOTE:  I have heard anecdotally that custom iPhone app development can run into the low six-figures.  

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.

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.

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.

Sounds interesting and might be worth downloading to check it out, but from a mobile marketer’s perspective let’s discuss a few things about this idea.

First of all a big HIGH-FIVE to Mobliss for scoring a very memorable 90210 shortcode to promote this game and I assume other titles in their portfolio. (Quick shortcode ownership search on the CSCA site..HERE.).

Now, I can appreciate Burger King looking for new, hip ways to build awareness, loyalty, etc..etc around their brand and the KING character that dominates their campaigns these days. However, the question that first arose in my mind due to experience working with other forward thinking brands in the Mobile Channel was - was this money well spent in terms of a tactic? Here’s my line of thinking on this one.

Let’s assume that this game is NOT prominently featured on any Carrier deck for a moment as the company’s press release did not explicitly say the game was available FROM the Carrier’s (deck), but rather “across a variety of national Carriers.” This can be interpreted to mean that the Carriers approved the distribution of this game via various off-deck methods such as a keyword text trigger and via a website. That said, Burger King is going to have to find creative ways (and invest a few dollars) to generate some serious traffic to their website where the game is featured and ensure that any in-store signage, print and possibly TV ads have a very effective call-to-action. I have no idea what volume of web traffic Burger King generates, but I think the off-web promotions will make or break this campaign for a number of reasons:

• still to this day a very small percentage of U.S. wireless subs actually participate in MO-based (aka send keyword via SMS to a shortcode) mobile marketing campaigns. The MMA’s 2007 Mobile Usage and Attitude Study pegged the percentage of U.S mobile subscribers who participated in mobile marketing campaign at slightly over 5%. (25-44 yr olds slightly higher at around 8%) - the study further claimed that these participants favored mobile sweepstakes programs (45%) and alerts (33%) over game downloads (21%).
• the required MMA and Carrier compliance language can seem daunting to consumers at the point of download
• downloading a game to a handset can be a cumbersome task to those who have not done so before in an off-deck environment. Conversion rates between the initial MO - the double optin that will be required due to premium charge and the actual download will be low.

Add to the list of adoption hurdles the fact that the game costs money - a recurring subscription nonetheless!! - and because of this fact the Company is going to have convince consumers (especially the 15-34 demo) that this game is worth it. How does the company intend to induce trial??? (Discussion for another time). Recurring premium subscription models can get messy, especially if consumers start calling their Carrier to complain about mounting fees they claim not to know anything about (wink, wink) Once complaints start rolling in, the Carriers get ancy and can threaten to turn off the program.

In closing - it’ll be interesting to see the results of this campaign in a few months time. I’m betting that the $2.99 subscription will soon be dropped.

OTHER NOTES:

Game downloads here in the U.S. have not lived up to their hype as the number of consumers who have played a downloadable game hovers around the 20% mark according to a recent MMetrics survey. PLUS, most games that are downloaded come directly from a Carrier deck. Couple this with the fact that those games that have consistently been at the top of the download charts for mobile have been casual games such as Tetris and/or an adaptation of a popular game franchise - e.g. Guitar Hero.