Mobile Marketing Emerges

Originally Published: July 2005

Hold onto your cell phones – mobile marketing is poised for explosive growth. According to the Mobile Marketing Association, there are 350 billion Short Message Service (SMS), or text, messages sent worldwide per month. Of those 350 billion, the group states that approximately 15% (or 52.5 billion messages) are commercial/marketing messages. While the number of commercial messages already seems enormous, marketers see the massive opportunity for more growth.

eMarketer predicts that U.S. mobile marketing spending will increase 22% from $115 million this year to $254.8 million by 2009. Even though eMarketer predicts a slight dip in spending around the year 2007, they are fully confident that mobile marketing will become another mainstream interactive marketing tactic, albeit not as popular as stalwarts like email, pay-per-click, etc. The reasons for the predicted explosive growth are the interactive, up-close and personal aspect of the medium, as well as its current effectiveness. Business 2.0 reports that current response rates for mobile opt-in subscribers are as high as 70%. It is important to note that these response rates are for opt-in messages, and the response rates will most certainly decline somewhat as clutter builds in the medium… much like email response rates have fallen due to the rise of spam.

In addition to response rates, marketers are intrigued by the fact that mobile marketing provides:
- A direct marketing channel to the end user of a product or service
- An uncluttered environment which maximizes commercial impact
- Context and time relevancy
- An instant response mechanism providing true one-to-one communication
- Easy tracking and measurement

Utilizing these inherent benefits, mobile marketing can be an effective tactic for brand building, driving customer acquisition and strengthening current customer relationships.

There are several forms mobile marketing can take including ads, sponsorships, one-off campaigns and contests, subscriptions, relationship building messages and commerce. Below, you will find an example of each form:

Ads and Sponsorships:
Mobile games will build in sponsorship components. For example, if you are playing a bowling game on your phone and roll a strike, you might see an animation for the “Lucky Strike Cigarette’s Lucky Strike of the Game”. Another example could be a football game. An animation might appear when a team enters the “Old Spice Red Zone”. These types of sponsorships are commonplace in traditional PC and console games, so it seems likely that they will soon appear in mobile games.

One-Off Campaigns and Contests:
Let’s say you go grocery shopping at Kroger and see a point of purchase display for Coca-Cola. Coke is running a contest to win a lifetime’s supply of Coke. So, you buy a case, find the game piece on the inside of the package, scratch to find a code, SMS the code and contact information to the special contest phone number and you are instantly entered into the contest. Another example for this type of campaign is American Idol’s now famous weekly vote where the number of text and traditional phone votes each contestant received for the week determined the person voted off each week.

Subscription Services:
Paid and “free” SMS subscriptions for news, weather, sports, traffic, etc. are another major SMS service. You sign up for a service and receive an SMS with the information that you request. “Free” subscriptions will include a sponsorship component, so that it is free to the consumer as long as he or she does not mind the occasional commercial message.

Relationship Building:
True one-to-one communication is very difficult to achieve with traditional marketing and the true one-to-one options that exist are expensive (i.e., a direct sales force). However, with SMS, customer interactions cost a fraction of what they would cost when using other tactics. A good example of relationship building would be a promotion from your car dealership that tells you when your car is due for an oil change. The SMS could even offer a code that you present to the dealer for $5 off.

Commerce:
While cell phone commerce is still in its infancy stage, the future opportunities for cell phone commerce are unlimited. Just one example might be that you receive an SMS message saying that if you buy a shirt from Gap in the next five minutes from your web-enabled phone you get 20% off.

When launching any one of these types of mobile marketing campaigns, it is important to follow the Mobile Marketing Association guidelines for mobile marketers, which include:
- Not sending unsolicited messages
- Obtaining single opt-in permission for standard rate messages
- Obtaining double opt-in permission for premium content
- Sending reminder messages prior to the renewal of any subscriptions
- No minimum subscription period requirements
- Allowing easy opt-out access
- Constantly maintaining truth in advertising and avoiding deceptive claims

These guidelines have been designed to limit spam and minimize intrusion on consumers. Since cell phones are very personal devices, it is important that mobile marketers protect the rights of users.

While the future for mobile marketing looks highly positive, the shape of the industry itself may hinder growth to a certain degree. The chief problem is that the industry is very disjointed with many different content providers, application providers, network aggregators and wireless operators. This lack of cohesiveness makes it difficult to standardize for a mass campaign and could slow growth until the industry standardizes.

Even with a lack of industry cohesiveness, mobile marketing will soon become a part of integrated marketing campaigns across the United States and will be incorporated more quickly as mobile marketing moves from SMS to multimedia promotions that include photos, audio and video. It is important to note that mobile marketing will never stand on its own as a marketing tool, but should be used in conjunction with other marketing tools such as traditional and online advertising, public relations, etc. to create an integrated program. This powerful combination of marketing tools will strike the optimal marketing balance of mass cost-effectiveness and one-to-one personalization. Is your current marketing program properly balanced?