Mobile marketing primer

author: Jeremi Karnell – Founder & CMO
Although there has been a lot of hype around the mobile marketplaceand how this could be marketing’s “Next Big Thing”, the industry isstill very much in its infancy (particularly in the United States)and is far from being the marketing panacea that everyone hopesfor. There are several factors that contribute to this.

First, it is a technically diverse marketplace.Device types range from mobile handsets and two-way pagers to PDAs,laptops and vehicle-related telematic systems. Each of theseinterface options contains its own unique (and sometimesproprietary) way of retrieving and displaying data (i.e., Voice vs.WAP vs. SMS vs. E-mail vs. J2ME vs. i-MODE, etc) via competing andunconnected technology standards (i.e., GSM vs. TDMA vs. CDMA vs.iDEN vs. AMPS vs. Analog). It has taken the Internet marketingindustry close to 5 years to understand how to effectively usenarrowband, rich media, and e-mail tactics…and those weredeployed on a wireline, open standard network.

Second, mobile marketing presents many platformchallenges that do not exist in other channels. Because mobiledevices are viewed as being very personal, many are still trying tounderstand how to deliver relevant and timely messages withoutseeming intrusive or creating privacy violations. Furthermore,device usability as it relates to small screens and font types,limited graphic capabilities, and thin bandwidth createslimitations as far as developing easy-to-use and powerful marketingcampaigns.

Third, user adoption of mobile data functionalityis still relatively low. Few users makes for a lack of marketinginventory. Even though most mobile handset carriers report growingnumbers of service plans being sold with data functionality, manywould admit that most users either are not aware that they have itand/or after using it once never use it again (think of that gymmembership you applied for on January 1st, 2002). Again, I muststress that I am only speaking about the U.S. marketplace. UnlikeEurope or Asia, the United States has benefited from high Internetpenetration and a sophisticated/robust wireline telephonyinfrastructure. These factors are the primary reasons why Americansare not rushing to adopt mobile data technologies. As technologyadvances, you will see this trend change drastically.

There are still many discrepancies in forecasts formobile advertising spending in North America, many due to thefactors listed above (See Figure 1.0). 2005 spending estimatesrange from $890 million (Forrester Research) to over $6 billion(The Yankee Group).

Figure 1.0

Regardless of what the end number actually is,there does seem to be agreement that mobile advertising is poisedto double, triple, or quadruple from what was spent in 2000.Despite these projections, recent studies reflect that most U.S.consumers are unwilling to accept such messages from marketers viatheir mobile devices (See Figure 2.0).

Figure 2.0

European consumers seem less skeptical. Independentresearch released March 19, 2002, by The Mobile MarketingAssociation (MMA) quantifies the successes that European consumerbrands are achieving through the use of mobile as a marketingchannel. The study, performed by digital research companyInterQuest, analyzed campaigns in the UK, Germany, and Italy. Amongits conclusions ¹:

• There is between a 71% – 96% recall rate by consumers in response to mobile marketing campaigns
• Nearly 70% of respondents would most likely or definitely recommend that friends receive mobile marketing messages
• 43% feel that the campaigns they receive via SMS have a positive impact on the advertised brand, with only 7% having a negative opinion
• Consumer intent to follow a brand prompt produced an overwhelming response, with over 40% of respondents agreeing that they would (visit a website, view an ad). On average, less than 5% stated that receiving a mobile campaign message decreased their desire to respond to the advertiser’s message

Over the next couple of years, we will continue toobserve marketing breakthroughs and lessons from Europe and Asia.The wireless marketing industry in the U.S. will continue to befilled with small trials and test campaigns utilizing fundamentallybasic tactics (i.e. WAP/PDA Sponsorships, SMS Messaging, etc.). TheU.S. will still be in a foundational mode of understanding whatworks, what doesn’t, what best practices are, and what are theindustry standards.

Five years from now, the United States should behitting its stride with advanced mobile services resulting from 3rdGeneration Network upgrades by all of the national carriers. Newvoice, multimedia, streaming, location-based and advancedtransactional functionality will drive mass consumer adoption ofmobile data services and marketing spending within this channelwill skyrocket. Furthermore, we will begin to see some parity atthis point between the U.S., European, and Asian mobilemarketplaces.