So Just What Is Mobile Marketing?

Your Questions Answered: Mobile

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Let's begin with what mobile marketing is not: It is not billboards driven around town on the back of a truck. Mobile marketing is, well, marketing that makes use of the cellphone, and it could potentially take many forms.

"COULD"? "POTENTIALLY"? ARE YOU SAYING MOBILE MARKETING HASN'T REALLY TAKEN OFF YET?

It's very small -- at the moment. Ovum pegged it at $45 million in 2005, while others' bullish estimates are that mobile will grow from $1.8 billion in 2007 to as much as $24 billion worldwide in 2013. By comparison, according to Robert J. Coen, senior VP-director of forecasting, Universal McCann, worldwide advertising spending in 2008 will hit $653.9 billion. In his report, Mr. Coen does not even break out mobile as a media category.

BUT I'VE BEEN HEARING IT'S THE "NEXT BIG THING" FOR A DECADE NOW. WHY ISN'T IT BIGGER?

A multiplicity of issues, including pure technological challenges (there are hundreds of types of handsets in the market with different technological standards); the fact that consumers only recently have begun to use the phone for anything besides voice; and finally, when polled, people say they really don't want ads on their cellphones. Of course, mobile marketers are convinced such surveys aren't asking the right questions and that people really do want marketing on their phones, just not spam. The trick is to make marketing useful and functional -- and give consumers something in return.

HOW CAN ADVERTISERS TAP THE DEVICE THAT CONSUMERS DON'T LEAVE HOME WITHOUT?

Mobile marketing has taken, and is evolving into, many forms. The earliest and simplest forms of mobile marketing involve text messaging, useful for a variety of marketing purposes such as entering sweepstakes, receiving sponsored news or sports alerts or company information. Another early mobile-marketing opportunity existed around sponsorship of free ad-supported directory-assistance services.

The next big step came with the growth of the mobile internet on the phone. Subscribers with phones capable of accessing the internet were able to receive highly targeted banner ads supplied by the telecom carriers, as well as ads on content sites such as the mobile version of Weather.com. The floodgates of opportunity, however, have begun to open as Google and Yahoo ply their search wares to mobile -- now the internet giants can combine search results with maps to the nearest pizza parlor or a click-to-call number for the nearest auto dealership.

IN WHAT OTHER WAYS IS IT EVOLVING?

The mobile device also allows for subscribers to make purchases and put the bill on their monthly tab and this is beginning to move beyond just buying ringtones, wallpapers and applications such as games (which can also be ad supported). Already, in Japan, mobile devices are used just like credit cards and are even fitted in some buildings to act as front-door keys.

Gradually, U.S. subscribers are upgrading mobile devices to include video, which, of course, can come with the familiar pre-roll and post-roll ads, not to mention ads which run on live mobile TV coverage over Verizon Wireless' MediaFlo and AT&T and Sprint's MobiTV offerings.

The next frontiers in mobile marketing are mobile coupons, social networking and more technology advances like the iPhone, which brought the full view of the PC-based internet to the phone rather than the condensed mobile-web version.

WHAT ARE THOSE FUNNY SQUARE BOXES KNOWN AS QR CODES?

A QR Code, meaning quick response code, is a two-dimensional, box-shape bar code originally designed for manufacturing. In Japan, the codes are common on outdoor, print and other media. Using a mobile phone with a camera and the necessary software, a subscriber can take a photo of the code and be sent directly to a mobile website without the tedious typing of a complicated URL or going through text messages. Some mobile marketing entrepreneurs hope the codes will become part of all U.S. marketing, much like bar codes, and some day will be used even to make purchases, perhaps billed directly to the mobile-phone subscriber.

WHY AREN'T THEY IN GREATER USE TODAY?

There are several barriers to adoption at the moment. People will need to be taught what the codes are and how to use their cameras to not only take pictures but to transmit them. Merchants, entertainment companies and others in the marketing world will have to be convinced to make the codes a new design element of ads and packaging. "It's out there a ways," said Dave Whetstone, head of mobile marketing at Publicis & Hal Riney. However, he said, the codes have the potential to one day be the killer app that allow shoppers to use their cellphones as a comparison-shopping tool at retail. Take a picture of a code on something you're considering buying, and the device quickly and automatically comes back with prices at competing retailers.

WHICH MARKETERS HAVE SUCCEEDED WITH MOBILE MARKETING?

Optimism aside, it's difficult to say. Most big marketers have tapped into mobile on an experimental basis. Last June, Coca-Cola Co.'s Sprite launched with the "Sprite Yard," a MySpace-like mobile website. Sprite Yard promised to move the brand from generating impressions on TV to connecting its consumers through photo sharing, group activity planners and shout outs. After eight months, Coke, like most marketers who have toyed with mobile, declined to provide specific results.

WHAT IS MOBILE'S PRICING MODEL? AND WHO GETS THE REVENUE?

Pricing models vary, but some are based on CPMs, some click-per-call and, for some of the newer location-based ad campaigns, there is even discussion of payment based on geo-targeting of a person's device within a designated number of feet of a restaurant or auto dealership. Revenue generally is split among the carrier, content provider and mobile-marketing enabler if applicable.

COME ON. NOBODY REALLY WANTS ADS ON THEIR MOBILE PHONES, DO THEY?

Most studies would indicate that is true. Yet, mobile-marketing boosters are confident consumers will welcome ads of value, especially those targeted to their interests. So far, marketers have been heeding the advice of the Mobile Marketing Association and others by requiring multiple opt-ins and holding back on mobile spam to stem backlash. And devising mobile ad campaigns is hugely complex, given the plethora of different devices and the carrier-approval processes.
Numbers rounded. Source: Forrester Research's 'U.S. Interactive Marketing Forecast, 2007 to 2012,' Oct. 2007

Case Study

TARGET: Subaru aimed to adapt its "The Legend Reborn" campaign for the 2008 redesigned WRX to target existing and new customers -- specifically young men 20 to 35 who are fond of partying into the night, video games and gadgets such as cellphones.

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MARKETER:
SUBARU AMERICA FOR THE SUBARU WRX
AGENCY:
R/GA
PROCESS: Preceding the car launch, R/GA developed a site that counted down to its unveiling at the New York Auto Show. A similar site was built for the mobile web. There, visitors could sign up for an SMS alert that would allow them to be among the first to see the car from their mobile devices. After the event Subaru followed up by building a more extensive mobile website, which included video of all TV spots and rally race schedules.

AD SUPPORT: The initial phase of the campaign was supported with a multichannel paid ad campaign, including TV and print ads to drive viewers to the mobile and online sites. The marketer also bought more than 5 million mobile media impressions on Sprint.

OUTCOME: The mobile site drew 77% of the sweepstakes entries and the mobile campaign drew four times more entrants than the print ad. After the mobile ads ran, entrants to the Maxim sweepstakes quadrupled and mobile alert opt-ins nearly doubled. Visits to the Subaru of America WAP site increased by more than 1,000% after paid-media spots ran. The campaign drew millions of impressions with a click-through rate of 2.7%. Overall, some 30,000 videos, ringtones and wallpapers were downloaded to cellphones, including videos of the campaign's TV spots.

LESSONS LEARNED: "Integration is a key element of mobile," said Webster Lewin, director-mobile marketing at R/GA. However, he said the campaign also proved ads on the mobile web are a powerful tool for drawing traffic to mobile websites. "Mobile media is actually one of the more effective ways to drive people to a mobile site," he said. Other evidence suggests visitors to the mobile site are "more engaged on the mobile web" than they are on the PC web, he said.

Surprisingly, even though the target was young men who are predisposed toward sports, banner ads in the sports areas of the mobile web were not as effective as those that appeared "run of site" on the mobile web.

Mr. Lewin was pleasantly surprised by the residual lift to the mobile push from the banner campaign. "People benchmarked it and kept going back to it," he said. Subaru added new content to the site with a re-launch in January.

WHAT DIDN'T WORK: The QR code wasn't as effective as the campaign's other elements, in part because so few people have devices equipped to read them. In terms of downloadable content, Mr. Lewin said the contact icon didn't work as well as a simple wallpaper of the car.
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