Digital Marketing Guide: Mobile

How Marketers Can Use Location-Based Devices

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A man walks into a bar and says, "Did you hear this is gonna be the year of mobile marketing?"

All right, we know you've heard that one before, but the truth is mobile is still experimental in some quarters, and even brands that are big believers in the channel still allocate comparatively small pieces of their digital budgets to it.

In a nutshell, mobile is difficult. Even the most versed practitioner will tell you it's a convoluted ecosystem to navigate. Some of the technology that has made the internet easier to use for marketing, such as cookies, which track users' surfing behavior, hasn't arrived in mobile yet. Others say the reach is still not quite there and that there haven't been any great case studies that prove it is.

Still, mobile businesses are getting venture-funded, and it's not a channel to write off: There are more phones in the world than personal computers, and the opportunity presented by a highly personal, one-to-one, always-on communications device can't be ignored.

There's been considerable buzz around location-based services. What's the deal?

Location-based services locate people or objects using GPS, Wi-Fi or triangulation, which calculates location based on cell-tower signals. Marketers can use LBS to serve location-relevant promotions, such as latté coupons for consumers on their way to a certain coffeehouse. (You've probably heard that one before, too.)

Some mobile social networks, such as Loopt, Limbo and Google's Latitude, use location-based services to let people make their location visible to their friends.

There's also the concept of "proximity marketing" -- when advertisers transmit promotional content wirelessly within a particular place or venue (e.g., a concert taking place at a stadium) to the cellphones of nearby consumers. This is also opt-in and widely used in parts of Europe. It's often based on Bluetooth technology, which has just started to gain distribution in the U.S., hence its slower takeoff on this side of the pond.

Being privy to someone's location -- isn't that a privacy invasion?

Getting users to opt in is rule No. 1 for anything LBS-related. There's a fine line between using location-based data to be helpful and scaring the bejesus out of people -- and global mobile-industry body CTIA has set guidelines for such situations.

This 'Fast and Furious' video ad includes a 3-D trailer.
This 'Fast and Furious' video ad includes a 3-D trailer.
OK, so why hasn't location-based marketing taken off?

A Jupiter Research study last year found that nearly one in five marketers bemoans a lack of inventory and worries about how intrusive location-specific messages might come across. Twenty-three percent say there aren't enough eyeballs to make it worth their while.

What about mobile apps? Clients, my boss, everybody's asking about them. Should I be doing one or is this a case of GMOOT, or Get Me One of Those, Syndrome?

Yes, it does seem like everyone's rushing to apps -- those services and utilities that consumers can download on their carrier networks or via some sort of handset storefront. And for that you can thank Apple, which introduced the App Store for the iPhone and iPod Touch over the summer. Apple announced in March that the App Store has more than 25,000 applications and has logged more than 800 million downloads.

A branded application, the thinking goes, facilitates an ongoing dialogue between a consumer and the brand. Marketers also say apps are a useful way to keep the consumer engaged with the brand even after a campaign has ended.

OK, so I'm sold ... right?

Hold up. Before you go out and start signing up developers, you should know that it's a really crowded marketplace. Mark Lowenstein, an analyst with Wireless Ecosystem, recently told a conference that the most downloaded apps in the iPhone App Store reach 20% of iPhone users, which he equates to 1% of the market where the iPhone is available.

Moreover, if you really want to reach a broad base of mobile users, you need to develop for more than just the iPhone platform. It's one of eight major mobile operating systems out there, and once an app is developed, it is not merely a simple matter of tweaking it to run on these platforms. So ask yourself: Why do I want an application? Would a mobile website work just as well? Is it worth the time and development to create a downloadable tool? You might find you're warding off the GMOOT symptoms already.

The creative challenge

Marketers are intrigued by mobile as an advertising platform, but there's one obstacle pre-empting a wider adoption of the channel: creative.

The screens are too small, some online creatives say. And offline creatives don't want to sully up their beautiful outdoor or magazine ads with text-messaging short codes or other mobile calls to action.

Dockers iPhone app
Dockers iPhone app
But one device setting the bar for creative experimentation is the iPhone, the most popular multimedia handset on the market. Automakers and Hollywood studios are leading the way, launching ad units that integrate video. Universal Studio recently rolled out an iPhone 3-D trailer for the newest installment of the "Fast and the Furious" movie franchise. And Dockers recently launched a "shakeable" iPhone ad that ran within several gaming applications. Shake the phone, and the dancer in the ad starts showing off his moves.

Anecdotal evidence suggests that users engage more deeply with the brand when the ad unit is rich and interactive. And even though marketers may be limited in what they can do creatively, they have been resourceful in crafting work-arounds.

For instance, though the iPhone does not fully support Adobe Flash, the software that enables many rich, interactive websites, advertisers have found other ways to simulate the Flash experience. (Adobe said it's working with Apple to bring Flash to the iPhone. Flash versions for Google's Android, Nokia's Symbian and Windows Mobile are also in the works.)

"The biggest challenge from the creative standpoint is in showing advertisers there's a valuable creative environment," said Jon Kaiser, a former ad executive turned independent consultant. He said automakers and entertainment marketers need to reach audiences that are hard to find in other media. "They're going to push it because they need to ... and they'll figure out their creative from that standpoint."

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