Mobile Marketing Has Potential (to Be Really Annoying)

Forrester Study Finds Consumers Embrace Data but Are Wary of Ads

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NEW YORK ( -- The good news for mobile marketing is that advertisers can target by location, demographic and create actionable responses. The bad news? More than three-quarters of Americans are annoyed just thinking about it.
Only 3% of consumers say they trust text ads on mobile phones.
Only 3% of consumers say they trust text ads on mobile phones.

Latest finding
That's the latest finding in a report from Forrester Research on the state of the mobile-marketing industry titled "Is the U.S. Ready for Mobile Marketing?" But while the answer to that question overall is yes, according to Forrester, 79% of online consumers find the idea of ads on their mobile phones annoying and only 3% say they trust text ads on mobile phones. And that means marketers must tread lightly when it comes to mobile advertising, offering something of value in exchange for the message.

Christine Spivey Overby, a Forrester analyst who co-authored the study, said she was surprised by those numbers until she started to think about what consumers were responding to.

"We've grown up with this view of the TV commercial interrupting our favorite program," she said. "There's this ad-equals-interruption mind-set that we have, and when you think about something as personal as the mobile phone that you hold in your hand and carry in your pocket, the idea of a marketer interrupting you while you have the phone, that's an idea that consumers hate. "

Public disdain
Much of that public disdain for mobile marketing may be fueled by bad PR, such as recent TV news reports about consumers getting spam on their phones -- and then having to pay for it through data charges. At first the major carriers were reticent to carry ads on mobile devices, citing the cost of handling customer complaints, and problems such as being forced to give consumers money back on their bills for products the consumers said they didn't request.

Sprint this fall became the first major carrier to announce it would offer ads on its "deck," the landing page for mobile consumers as they access information on the mobile web. (Ads have long appeared on "off-deck" websites, those sites accessed from outside a carrier's portal. Those sites typically are more difficult to access than a carrier's portal and carry far less traffic than a carrier's decks.)

Last week, Verizon Wireless became the second major carrier said it will place banner ads on its deck starting this year. Cingular Wireless, about to be renamed AT&T pending final government approval, has kept mum on its advertising policy. Mobile marketing spending has increased from $45 million in 2005 to an anticipated $150 million in 2006, and is expected to grow to nearly $1.3 billion by 2009, according to research firm Ovum.

All about value
It's all about value, wrote Ms. Spivey Overby with Forrester analyst Charles Golvin. The key is to avoid the mind-set that the marketing message will be an interruption and instead give consumers something they want.

"When you get into these intimate media like a mobile phone you have to change the way you think about marketing," Ms. Spivey Overby said. "You have to change the rules. It's a new mobile mindset-replacing the view of interruption with value."

The report outlines three ways marketers can use the medium: text messaging, such as offering coupons and short codes; advertising with banner ads on a mobile browser; or creating ad-supported applications and content. But there are pros and cons to each. While text messaging is the most ubiquitous with the highest consumer adoption rate, it's far less immersive and interactive than ad-sponsored games, for example. And carriers are still reticent to allow advertisers to support free content on their service because it cannibalizes what has become a big business of selling ringtones, wallpaper and games.

Right ads for the medium
Ultimately, Forrester advises that marketers consider the medium and the message. Keep the message abbreviated and be sure to measure the response, even using mobile responses to gauge the effectiveness of a broadcast media. Target campaigns to the people most likely to respond -- Gen X and Y are the targets most likely reached through mobile marketing. And adopt a mind-set of value -- Forrester advises finding a consumer who's unfamiliar with the campaign and asking him or her to find the value in it.

While it might be difficult for marketers to adjust their thinking, Ms. Spivey Overby said she sees some good early signs, such as what Toyota is doing with its Yaris brand by sponsoring Fox's mobisodes, a term for short videos for mobile.

Fox is "using shorter, punchier commercials," she said. "But many advertisers who aren't familiar in the space need to turn to their agency or a partner that understands the space to build for this medium."

Early success
And despite a negative public perception of mobile marketing, the study says there have been some early successes -- especially when ads are well-targeted and when the value of participating is clear. For example, the study discusses a Cambridge, Mass.-based grocer that replaced its loyalty cards with a mobile phone-based program. About 82% of shoppers now belong to the program.

"Marketers can't dismiss mobile," said Ms. Spivey Overby. "2007 is an exploratory year for most mainstream advertisers and we need to keep this in perspective because it's still a very new market."
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