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Imagine you’re a hip young urbanite and you pass a street mural that contains the perfect color combination for a pair of sneakers. You take a picture of it with your phone, text it to Nike and, in no time at all, Nike sends you back a message with a picture of specially designed shoes and a code that enables you to go online and order them in an instant.
This story first appeared in the February 13, 2009 issue of WWD. Subscribe Today.
Or you’re in a bar and can’t decide what to order. One quick click to Smirnoff on your phone, and you’ve not only got a full cocktail menu but mixology directions, too, for a bartender who may not be as plugged in as you.
Talk about reaching out and touching someone. The above are just two examples of recent mobile phone marketing campaigns, representing a new generation of brand communication where cellular phones are fundamentally changing the rules of how companies interact with consumers—and vice versa. Though mobile marketing is still in its infancy, the numbers alone dictate that it is a force to be reckoned with.
“If you were to lock a scientist up in a room and ask him to come up with the ultimate marketing device, he’d come up with a phone,” says Daniel Rosen, head of mobile at the London-based ad agency AKQA. “A mobile phone is with you all the time. You can transact with it, take it with you wherever you go, buy things with it. It knows where people are and can deliver location-based relevancy for any advertisement you deliver in a targeted way. There has never been an advertising or marketing device that allows a brand to deliver rich media transaction capability to a targeted demographic in a location-based way. That is entirely unique. That’s why it’s the most exciting marketing device ever.”
Small, it seems, is the new big.
The numbers appear to support the hyperbole. Globally, there are more than four billion mobile phone subscribers versus one-and-a-half billion Internet users, according to Berg Insight. Ninety percent of phone owners have their phones within one meter—arm’s reach—24 hours a day. In the U.S. alone, there are more than 255 million mobile phones; collectively, Americans send more than 50 billion text messages a month.
Compared with other areas of marketing, the size of the mobile market is still tiny. Berg Insight estimates a 2008 market value of about 1.2 billion euros, or $1.6 billion at current exchange, with half of all revenues being generated in Japan, according to its telecom analyst Marcus Persson. Berg’s estimate for all digital advertising, including the Internet, is about 30 billion euros, or about $39 billion.
“If you look at how advanced the Internet is compared with phones and the amount of time you spend in front of a computer, mobile is still a tiny fraction,” Persson says. “However, mobile is growing significantly faster than most other mediums,” he continues, noting Berg forecasts that the market will reach 6.1 billion euros, or $7.9 billion, in 2013, an annual growth rate of 39 percent.
Like the numbers, mobile marketing’s creative potential is seemingly boundless, —particularly as third-generation phones (aka smart phones) such as Apple’s iPhone—become more prevalent. Currently, though, simple text messages account for the majority of campaigns, particularly in the U.S. “I break mobile into three areas,” says Jordan Greene, principal of mobile media at Mella Media. “The first is text messaging. A consumer sees an ad, such as a billboard, with a simple call to action, sends in a text and gets another text in response.” Text messages can consist of a maximum of 160 characters, including spaces and punctuation. “The next level is a brand responds with a phone call to a text, with either a celebrity voice or a live person,” Greene continues. “The third category is the mobile Web, but looked at slightly askew, because you have a 2-inch screen on the average telephone, versus a 17-inch computer screen.”
According to a presentation Persson saw at an industry conference, there are four levels of consumer response to a mobile campaign. “The lowest is to ignore it. The second is review—this is kind of interesting, what is it?” he recounts. “The third is engaged, so you send a message back to the company, and the fourth is when it’s so good you recommend it to your friends. The iPhone apps are a typical example of that.”
The most successful campaigns are those that take advantage of the dialogue inherent in the medium. “Mobile can activate customers and engage them,” says Yaakov Kimelfeld, senior vice president of digital research and analytics for MediaVest. “You give them the chance to interact with the brand as opposed to just basically absorbing the message. You provide entertainment value,” he continues, citing as an example an “irresistibility quiz” MediaVest developed for a Procter & Gamble toothpaste campaign. “So when someone is bored in the doctor’s office, you provide entertainment in exchange for their time.”
The medium is also popular for offering freebies or discounts, but even promotional offers can’t be boring. “You want to deliver value to the consumer, have an interesting hook and deliver the brand message,” says Greene. “If you can do those three things, you have a winner.”
As an example, he cites a campaign he created for the birth control pill that was designed to send consumers a daily reminder to take their pill, working within the restrictions of pharmaceutical advertising. The solution: A daily message that went out saying, “This is your daily reminder,” followed by a fun fact targeted to the demographic, such as Julia Roberts’ middle name (Fiona, for the record), and a tag line at the bottom saying, “Brought to you by Thepill.com.”
“You got your reminder, a cute fact to make you smile and the branding bumper which pushed you back to the Web site,” Greene says. “The beauty of this was in its simplicity.”
Integrating a mobile campaign with other forms of media, such as TV, PC and print, is key. Barack Obama’s presidential campaign was masterful in its 360-degree approach. “When mobile is part of a broader campaign, combined with print and online, they build together so you get a higher response and approval rating,” says Mike Wehrs, president and chief executive offi cer of the Mobile Marketing Association. “The Obama campaign did this to great effect. It allowed them to mobilize supporters, inform people who were on the fence, keep people aware of rallies, clarify his position relative to claims made against him and deliver his message instantly.”
“It’s very good to connect with other media,” agrees Kimelfeld. “In Japan, for example, you can use your phone to click on a two-dimensional bar code displayed anywhere on a product or ad or TV screen. Now, you’re clicking on the outside world, and, depending on what the advertiser wants, that will produce an action—either send you an e-mail or display something or give you a coupon or promotion or directions to a specific place,” he says. “When you can do something like this, your entire environment becomes a digital ecosystem.”
As phones become more sophisticated, so does the technology used to deliver information. Marketers speak of the mobile Web in the same awed tones that Indiana Jones reserved for the holy grail. For the moment, though, harnessing the power of the Internet via mobile phones is in its genesis. Smart phones, those able to best optimize the mobile Web, still comprise less than a quarter of all phones being used worldwide. “At any one time, you could have up to 1,500 different handsets out there globally that a consumer could be looking at your mobile Internet site through,” says Rosen of AKQA, “so we have to make sure that experience is optimized. Also, you have to make sure the content we want you to download isn’t too heavy, so that it’s quick and affordable.” Rosen says that about 20 percent of the phones on the market are smart phones, a number expected to more than double in the next couple of years.
Creating content for the mobile Web presents its own set of opportunities and challenges. “It isn’t as simple as translating other marketing programs to the mobile phone and expecting it to work,” says Eric Johnson, regional vice president, Asia Pacific, the Estée Lauder Cos., online division. “A lot of research is centered around how do consumers want to use this device and what do they want to use it for?”
Through its research, Lauder discovered that people use the mobile Web more for searching than browsing. “We found that the consumer doesn’t browse around, so when they click onto a page, you have to deliver the information right there,” says Johnson. “They’re not going to navigate too much below that, so [a mobile Web site] looks very primitive compared to the Internet.” Lauder’s Bobbi Brown brand site, for example, uses flash animation and only four or five levels of navigation featuring primarily promotional content such as product and event information.
Lauder has sites for four of its brands in Asia: Estée Lauder, Clinique, Bobbi Brown and MAC Cosmetics.
For now, iPhone applications—specialized programs created by brands exclusively for Apple’s phone—point the way forward. More than 300 million applications have been downloaded onto iPhones globally, says Rosen, an average of 11 apps per user.
Inspired by that success, Blackberry recently created its own applications for various social networking systems, a move expected to be followed by other manufacturers and carriers. The potential has brands salivating.
“The ramifications are that marketers get to have a nice, rich interface that lives native on the handset,” says Rosen. “They own real estate on the handset.” One of his favorite apps is Shazam, song recognition technology that allows the user to identify a piece of music, while Berg’s Persson likes an app from Carling Lager, in which the screen looks like a glass of beer that can be tilted and drank virtually. Emerging markets represent another great area of opportunity for mobile marketing, particularly in Turkey, India and certain areas of Latin America. Because of a lack of infrastructure in many developing countries where land line–based cable networks don’t exist, the phone—rather than the television or the computer—is the primary screen for many people. “If you’re a brand and want to reach people digitally, in many developing countries, mobile is the only show in town,” says Rosen. “Here, you talk about digital marketing, you think a Web site on a PC. There, it doesn’t exist. Mobile is the first screen digitally, not the second screen.”
As tantalizing as the potential of mobile marketing seems, logistical considerations still abound. In the U.S., there are four main carriers (AT&T, Verizon, Sprint and T-Mobile), a handful of tier-two companies such as Alltel Wireless and U.S. Cellular and mobile virtual network operators—companies that lease mobile services without owning the network, such as Virgin Mobile.
Deciphering the myriad options can be tricky for marketers. “You need to figure out how many carriers you want to work with and put those business relationships in place,” says Wehr. “There are technical considerations—how many devices do you want this to work on and how many people do you want to reach? If you want it to reach the broadest possible distribution, then you’re limited to text-based messages.”
In the U.S., the carriers also have approval over the content that a brand delivers via its lines. “The U.S. carriers believe it is their responsibility to police the content their customers can receive on their mobile,” says Rosen. “Imagine your broadband provider controlling the content on your PC. It’s quite unusual.”
Also infuriating to many is Verizon’s blocking of Bluetooth technology. Bluetooth has the potential to deliver personalized, location-based information that makes marketers swoon. For example, if someone was passing a Gap store and had opted in to receive information, they could get a message offering a promotional discount or alerting them to a new collection. But Verizon blocks those messages.
“If you don’t understand where the minefields lie,” says Greene, “it becomes the worst-case scenario for a marketer instead of the best.”
For the carriers, the crux of the matter centers around privacy. “The operators hold a lot of information about subscribers: age, income, where you live, if you browse the Web and what pages you are visiting. That could be very valuable for advertisers,” says Persson. “But the problem is privacy. Operators are responsible from the subscriber’s side. It’s a balance and I don’t yet think we’ve found a good model.”
Price is another consideration. Users opt in to receive mobile messages (unsolicited spam is one of the medium’s biggest no-no’s), but that doesn’t mean they want their inboxes jammed with slow-to-load messages. “Data transfer is still expensive in the U.S.,” says Kimelfeld. “You don’t want to ruin the consumer’s trust by sending them a large data application, because they have to pay for that and they’ll get annoyed.”
A company called Blyk, cofounded by the ex-president of Nokia and based in Finland, has come up with a unique model designed to solve the problem. Blyk is a mobile network geared toward young people that gives them free texts and phone minutes each month in exchange for users agreeing to receive a certain number of advertising messages. The service is available in Turkey and the U.K., and plans call for it to launch in Spain, Germany and Norway this year.
As companies like Blyk evolve the service model and phones become ever more sophisticated, experts expect mobile marketing to become an established element of a brand’s strategy, rather than an afterthought. “The differences between mobile and digital are rapidly dissolving. Mobile will catch up as stand-alone,” says Kimelfeld. “As the small screen becomes a larger screen, you can project more. The next step is that there will be no difference. We think it will happen with the fourth generation of phones—it’s like your laptop will become more convenient.”
AKQA’s Rosen, whose goal is to get marketers to spend about 5 percent of their advertising budget on mobile, agrees. “This is the most widely used digital device in the world. This is a device that is incredibly personal,” he enthuses. “Use it innovatively and you will reap the rewards.”