Inside Mobile Marketing

I created a simple thought process to help marketers new to the Mobile Channel add some structure to their mobile marketing planning.  While not perfect by any means, the process does highlight the importance of aligning your marketing objectives with how your customers might interact with your “mobilized” brand/service.  Click on the link below to access the PDF.

mobilethoughtprocess

First off, GREAT game!  I tried to keep track of the commercials that featured a mobile component.  Here’s what I caught during the game.

1. Approx 6pm EST:  SPRINT re-ran its not-so-new NFL mobile campaign in which users viewed a call-to-action to TXT a keyword to Sprint’s 77777 shortcode for more information.

 

2. Approx 7:20pm EST:  Cars.com showed a man in his car viewing the company’s website on his “smartphone” before walking into a car dealership to negotiate for a new car (at least it was implied).  While no call-to-action to visit the mobile site and/or text message was displayed, I found it refreshing the commercial creators chose to display the interaction with the website via amobile handset.

 

3. Approx 7:43pm EST:  Monster.com encouraged users to enter a contest by texting “Fan” to 24421.  Users received an SMS with an embedded link in it taking them to mobile internet page where users could provide information to to join in on the fun.  I must admit that the mobile internet page was pretty well designed.

 

4. Approx 7:44pm EST:  United Way asked users to text “Fit” to their shortcode – I have to be honest I missed the shortcode because the call-to-action text came and went WAY TOO FAST.  I can’t imagine that too many people were quick enough with their mobiles to interact with this ad.

 

5. Approx 9:28pm EST:  The NFL encouraged viewers to vote for their game MVP choice via NFL.com on their PC or web-enabled mobile device.  NOTE the call-to-action was verbal – NO text display.

 

6. Approx 9:35PM EST:  - NFL re-ran SAME add as above.

 

7. Approx a few minutes after the game ended:  NFLShop.com encouraged viewers to call 1-866.NFL.5959 to pick up some Pittsburgh Steelers gear. To its credit, the commercial did show the complete numeric number above the mnemonic version in the initial scene, but then only showed the mnemonic version through the majority of the ad.  I wrote about this last month – the use of letters to represent numbers prevents mobile users with QWERTY keyboards from dialing or texting the correct numbers.  

 

8. Approx a few minutes later:  NFLShop.com re-ran the same ad, but I could have sworn that I did not even see the complete numeric phone number this time only the version with the mnemonic for NFL (1.866.NFL.5959).

So there it is, certainly not a lot, but then again Super Bowl advertising has always been more about building branding awareness versus asking for a direct response.   We’ll certainly see more next year.

Besides the obvious SPAM question, the issue as I see it, is that we have a double standard in play for Carriers versus marketers when adhering to established mobile marketing guidelines.

Wireless Carriers, AT&T included, strictly enforce adherence to their own mobile marketing rules and to the Mobile Marketing Association’s (MMA) Best Practices Guidelines – which clearly state that users MUST opt-in to receive messages from a marketer regardless if the messages are standard rated or free-to-end user (FTEU).  (Yes, Carriers can waive opt-ins at their choosing, but in this case they are promoting a TV program that they happen to have the exclusive text messaging voting rights to – seems to be a disconnect.)

So what gives AT&T the right to send out messages to their subscribers to promote a television program via unsolicited SMS – especially to those subs who may have never voted via SMS for the Idol show a.k.a “heavy texters”?

Many people in the Mobile Industry will interpret this action by AT&T as a double standard fueled by greed. Expect some “eyebrows” to be raised in the blogosphere and at upcoming MMA industry gatherings when the Carriers are present.

NOTE: I do support marketers having the ability to communicate with participants via SMS if the users opt-in and are clearly aware they may get marketing messages in the future from a brand.

Marketers should be cognizant of the rise of the QWERTY keyboard found on both Smart and Feature phones as the keyboard’s layout negates the practice of using only word-based mnemonics to represent shortcodes and phone numbers in marketing materials.

WHY? With QWERTY, the standard 12-button keypad and its corresponding letters that have long dominated both landline and mobile phones is displaced with a new layout and thus QWERTY users are unable to tap out mnemonic call-to-actions if the numbers are not displayed as well. TRANSLATION – QWERTY users are precluding from participating in campaigns.  Now it may not seem like a big deal, but I have seen some examples where major U.S. companies have made this mistake in their advertising (e.g. Text CHASE –  Another example would be just displaying 1-800-FLOWERS without the corresponding numbers).  

BEST PRACTICE:  marketers should always display the numbers near their mnemonics.  For example, Text CHASE becomes Text CHASE (24273) and Call 1-800-FLOWERS features (1-800-356-9377) next to it.

Interesting Side Notes:

• The NPD Group in Q3 noted, “Mobile phones with a QWERTY keyboard experienced the greatest year-over-year rise in sales; 30 percent of handsets were sold with this feature in Q3 2008, versus just 11 percent the year prior.”

• Nicholas Covey, director of insights for Nielsen Mobile, attributed the spike in messaging to the spread of QWERTY-style keypads, whose users send 54 percent more text messages than those with ordinary keypads. 

To the outsider, these changes may elicit a “so what?” response. To mobile practitioners these changes have a two-fold impact:

First, they reduce costs (except #4) for marketers. Significant effort is required by engineers to ensure their messaging platforms comply with the ability to deliver carrier-specific messages. It also lessens the amount of compliance review time required of marketers.

Second, and arguably most important, is that these changes (except #4) signal a willingness by a major Carrier to “play nice” with the other Carriers to help standardize a set of cross-industry, cross-Carrier mobile program regulations. This bodes well for all in the Mobile ecosystem as the biggest knock on the industry is fragmentation. Fragmented Carrier messaging just got some help. Thanks T-Mobile.

So now that pretty much everyone in the Mobile industry has heard that Verizon Wireless (VZW) has told its U.S. messaging Aggregators that starting November 1st 2008, they will be charging them 3-cents for every standard and premium MT (outgoing message) that goes over their network for off-deck programs – let’s take a closer look at the situation:

1. SPRINT has long stated that it would charge 3-cents per MT, but has yet to enforce the policy to date. Will they wait to see what falls out of this VZW news OR follow suit?
2. T-MOBILE has charged for MT messages for some time now, but their charge is definitely less than 3-cents and may feature tiered-pricing depending on volume of messages. Will this change?
3. AT&T to my knowledge has never charged for off-deck messaging program MTs. Will they follow Verizon’s lead OR wait out the maelstrom?

Other questions…

MMS – Most of these aforementioned Carriers haven’t determined what their Standard or Premium messaging rates will be for MMS programs. Not that there are a lot of MMS programs running in the U.S. today, but will this 3-cent rate be tacked on to these forthcoming delivery charges? Hell, those companies trying to get MMS-MO programs off the ground (aka User Generated Content) may have to hold-off even longer now.

FTEU – I have written about this topic previously– the industry is still waiting to see what the economics will be for running these types of programs in the future. VZW states that 3-cents will not apply to FTEU programs, but how will the 3-cents charge influence the per message fees that will be associated with FTEU?

Senate Oversight Committee – Will Senator Herb Kohl and his gang of anti-trust committee members throw this development into the mix of items to investigate? Probably will, especially if other Carriers follow suit.

SMTP SMS – will companies start to seriously look at sending SMS via SMTP to consumers as viable option? I would think that the Carriers will anticipate this move and enhance their filters to watch for it and potentially block it. An argument can also be made that the SMTP option will make things worse for wireless subscribers due to SPAM and lack of MMA/Carrier compliance regulation.

Direct to Carriers – will this force large enterprises like Google, Yahoo, Visa, etc,etc that are sending millions of messages on a monthly basis to negotiate preferred rates with the Carriers or Aggregators?

PREDICTION

With the industry backlash that is swirling on the internet now, I am predicting that VZW will pull back on enforcing this policy until further notice. They will need some time to listen to ideas/pleas from other ecosystem players before moving forward. Heaven forbid they do go forward with this and they start losing subscribers to other Carriers because their subs complain of not being able to use ChaCha or vote for their favorite dancing star because the program provider can’t afford to support VZW.

WOW! That’s quite a lot of text messages, however a couple things are worth noting as a Mobile Marketer:

• If you look at data from either comScore/MMetrics, Nielsen Mobile regarding the percentage of U.S. subscribers that actually send at least 1 text message within a month, than these aforementioned numbers are essentially generated by approximately 50% of the total wireless subscribers in the U.S. (Note: Jupiter Research states that approx 62% of wireless bases uses text messaging)

• These numbers are DOMINATED by peer-to-peer messages versus messages generated through participation in a shortcode program (aka Application-to-peer). comScore/MMetrics has stated the following:

Just 6% of teen mobile users responded to a poll or contest via short code–i.e., voting for an “American Idol” contestant–in the past month, slightly higher than the overall population (4.5%) but still not a critical mass. Even fewer teens responded to a text-message ad (1.6%), in contrast to the 2.4% of overall mobile users. And just 1.5% of teens responded to an offline ad that directed them to text a short code in.

• Also — VeriSign’s wireless aggregation business stated that A2P, such as news alerts, ring tones, promotional video clips, and enterprise messages sent to mobile users rose sharply in Q2 2008, from approximately 186 million messages in Q1 2008 to approximately 249 million (A2P) messages in Q2 2008, an increase of close to 33 percent. NOW, Verisign processed a total of 52 BILLION messages in Q2 2008 – which would mean that less than 1% of these SMS being sent were A2P or marketing-based (in some sort of fashion)

Props to reporter Diane Bartz for this story! Nothing like a Senate subcommittee to stir the pot and place the U.S. Carriers on notice . I am not well versed on how these sub-committee processes work so I won’t comment on that angle.

However…..On the Carrier side of the business, perhaps these price increases are being used to ‘influence’ subscribers to sign up for a recurring messaging bundling where revenue recognition is greatly enhanced?? Are these higher prices designed to ‘milk’ the increase in SMS traffic all of the Carriers have experienced year over year??

While text messaging functionality may be ubiquitous on today’s U.S. installed handset base, not everyone is using SMS nor is every wireless sub signed up to a text messaging plan. Mmetrics/comScore peg the number of active (sends at least 1 message per month) at around the 50% mark.. other analyst firms come in around that figure as well. Yes, frequency of use does differ across demographic profiles e.g. Gen Y are heavy text users -72% text at least monthly according to Forrester Research. PLEASE ALSO KEEP IN MIND that the overwhelming majority of the text messages being sent are Peer-to-Peer (P2P) versus Application-to-Peer (A2P) aka Mobile Marketing programs.

Regarding a messaging plan – I have seen where Jupiter Research estimates that 2/3 of all wireless subscribers belong to some sort of text messaging plan. (I’d like to confirm with each U.S. Carrier what they actually see)

With the FCC hovering in the background, the U.S. Carriers are certainly doing their best to police their own off-deck mobile marketing/commerce programs as all of the major Carriers now utilize third party program audit firms. And while the Mobile Marketing Association (MMA) continues to try and establish a set of cross-Carrier industry standards via their Consumer Best Practices guidelines, the major U.S. Carriers still have not adopted the guidelines as their de jure “LAWS’ as each major Carrier has issued addendum’s to the MMA’s guidelines. These addendums are essentially enforced by the audit firms each Carrier has contracted with.

As I’ve blogged about before, this is part of the reason why Mobile Marketing – at least from a program execution standpoint – is confusing and at times exasperating. Ensuring your mobile marketing program is compliant with the MMA guidelines, plus say 4-5 subtly different sets of Carrier rules is taxing on human (QA, account managers, engineers, etc.) and technical resources – especially when the individual Carriers make sudden, unexpected changes to their policies (as they have been known to do).

Quick note on the audit firms: program auditing is a niche industry that has recently grown to prominence within the U.S. Carrier-Aggregator-Marketer ecosystem. It is NOT a perfected science yet, as the audit teams have the tough task of educating their employees on the current set of “rules”, keeping up with ever-changing executions of 3rd-party programs and maintaining a fair and balanced interpretation of the many “grey” areas found within the many sets of policy guidelines we as an industry strive to adhere to.

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.