Mobile devices are evolving into an electronic Swiss Army knife for consumers and marketers, offering the promise of seamlessly moving from cell phone signal to wireless fidelity. They can provide users with right-now text, video, games, MP3 music, photos, Internet and personal digital assistant functions.
"Yesterday the cell phone, tomorrow all these different devices working all together," says telecom analyst Jeff Kagan, adding that marketers have an "exploding" opportunity for one-to-one communication with U.S. consumers.
A Yankee Group study issued this fall found that mobile phones are starting their ascent toward reaching critical mass as a marketing tool. Awareness of cell phones' versatility beyond making telephone calls has taken a "quantitative leap" this year vs. 2003, with a strong showing for text messaging among the hard-to-reach 18-to-34-year-old crowd.
$39 billion by 2007
Worldwide revenue from mobile information and entertainment was about $9 billion last year and is expected to reach $39 billion in 2007, according to Ovum Consulting. In the U.S., which has lagged far behind Japan and Europe, the amount of money marketers spend on mobile marketing is expected to grow from less than $1 billion this year to an estimated $5 billion by 2006, says Peter Fuller, executive director of the Mobile Marketing Association.
"I'd liken it to 1997, just before the dot-com boom," says Mr. Fuller. "It's the next consumer touchpoint, and everybody wants to be part of it."
Marketers have been moving into the third screen gingerly. Hollywood has found the mobile phone to be a useful tool for driving traffic to theaters; other marketing efforts have involved mobile content like Sprint Corp.'s new offer of ringtones and screensavers from HBO's "Sex & the City." Music marketers and performers, such as Madonna, also have made wireless devices a burgeoning tool for sales of ringtones and other promotions.
Marketer involvement is about to jump, with text messaging expected to become widespread as a marketing tool by next year. Unilever's Dove is counting cell phone votes live on a Times Square billboard. McDonald's Corp. and Kellogg Co. conducted some of the biggest text messaging trials so far, this summer placing codes on 250 million take-out bags and 80 million cereal boxes.
Cingular Wireless, the BellSouth Corp.-SBC Communications joint venture, has in the works large mobile efforts tied to Coca-Cola Co. and Procter & Gamble Co.'s Red Zone deodorant aimed at teen boys. Alltel Corp. is conducting a $1 million text messaging sweepstakes centered on Super Bowl XXXIX. This holiday season, Gap Inc.'s Old Navy is expected to go to market with a ringtone promotion.
Elizabeth Arden Inc. got a big boost this fall from a wireless element in its launch of the Britney Spears fragrance Curious. In one of the first integrated marketing efforts to include all three screens, Arden's $5 million campaign began with banner ads on teen Internet sites such as Alloy.com with the question "Do you dare?" Those curious enough to give their phone numbers- 27,000 over seven weeks-received a voice message from Ms. Spears discussing the campaign's TV spot that was running on Viacom's MTV. Arden boasts that teens, renowned for their short attention spans and multitasking prowess, stayed on the line for an average of 40 seconds during the 45-second phone message.
The result: Arden says that in only five weeks Curious became the No. 1 selling fragrance in the U.S. at more than a dozen department store chains for two weeks.
"We were reaching these girls in their space," says Ron Rolleston, exec VP-marketing and creative director at Arden. "It was the spark that set a fire."
Beyond mobile phones as ad vehicle, marketers are looking at how to link brands more directly with the wi-fi revolution. Walt Disney Co. and its ESPN network are said to be considering the creation of branded cell phones and service, mirroring marketers' earlier embrace of affinity credit cards. Friendster.com has announced a branded Internet telephone service, providing free long-distance to users.
Also vying for a stake in the mobile world is Internet search engine Google, which is testing a short messaging service that allows mobile phone users to access the search engine and a database of local business and residential listings, as well as price comparisons from Froogle.com. Dial GOOGL (46645) and write the name of a product and a ZIP code, and Google provides up to three listings.
no limit to options
"There's no limit to what you can potentially do-it's just a matter of finding the right way to do it," says Joshua Spanier, a media supervisor at Omnicom Group's Goodby, Silverstein & Partners, San Francisco, who worked on the Curious launch.
Monetizing the mobile phone is expected to be easier than it's been with the Internet. "People won't pay for services on the Web, but people are conditioned to pay for any premium content they are receiving on a mobile device," says Garth Couteau, director-corporate communications at Pulse Entertainment.
Tom Burgess, CEO and co-founder of Third Screen Media, which provides mobile media management services, expects the mobile screen to evolve much the way cable TV evolved, with the emergence of new networks providing old and new types of content.
But in one sense, the CNN of the third screen is likely to develop differently from how TV networks evolved, with the content provider reaching the consumer directly instead of producers needing to sell their work to a separate TV network.
For example, Major League Baseball and the National Football League appear to be working to provide their content directly to mobile devices, essentially becoming networks on their own. Providers such as Enpocket deliver mobile blogging and other premium content to mobile users. Wireless alerts and other sports news are coming onstream from such sports entities as ESPN and Sportsline.com.
But some critics cite problems with phone spam and privacy, while some marketers remain lukewarm about current technology.
General Motors Corp.'s Cadillac just launched a mobile project, via Vindigo city guides in 10 markets, that provides news on local entertainment spots, but Tom Hassett, Cadillac's interactive marketing manager, says factors holding back carmakers include how crudely a vehicle is represented on a mobile phone screen. "When we put our vehicles out there, they have to look beautiful," Mr. Hassett asserts.