Marketing outlook mobile driving the bandwagon

CONTENTSPAGE PAGE3 INTRODUCTION: 23 Which will be the most discussed mobile legal issues By Giselle Tsirulnik in 2012? By Chantal Tode4 2012 will be the year of tablet advertising By Chantal Tode 25 OEM focus on smartphones in 2012 to leave feature phones in the dust6 Location, 3D ad creative and social to dominate mobile By Chantal Tode ad strategies By Rimma Kats 27 Publishers to eye mobile monetization in 2012 By Rimma Kats8 Ad agencies will embrace the marriage of digital and physical in 2012 29 Loyalty and rewards programs will rely heavily on SMS/ By Chantal Tode MMS in 2012 By Lauren Johnson10 Mobile no longer a peripheral thought for banking By Lauren Johnson 31 Music industry must set focus on mobile discovery in 201212 Mobile marketing offers carriers significant By Lauren Johnson opportunities in 2012 By Lauren Johnson 33 Mobile stats to remember in 2012 By Rimma Kats14 Retailers will struggle with mobile point of sale payments in 2012 35 Local, social will play prominent role in search By Lauren Johnson By Lauren Johnson16 Mobile content needs to be practical, useful and 37 Who will win the mobile, social war in 2012? resourceful By Rimma Kats By Rimma Kats 39 Mobile payments, social mcommerce and QR codes will 18 Marketers shift from building databases to successfully dominate in 2012 engaging them By Chantal Tode By Rimma Kats 41 More TV programming to use mobile, tablets to complement 20 Fragmentation will continue to haunt mobile email viewing experience marketing in 2012 By Lauren Johnson By Lauren Johnson 43 A year in pictures22 Brand integration in mobile gaming will drive mobile By staff reports commerce By Rimma Kats Mickey Alam Khan Chantal Tode Lauren Johnson 401 Broadway, Suite 1408 Editor in Chief Associate Editor Editorial Assistant New York, NY 10013 mickey@ chantal@ lauren@ Tel: 212-334-6305 napean.com mobilemarketer.com mobilemarketer.com Fax: 212-334-6339 Email: news@mobilemarketer.com Website: www.MobileMarketer.com For newsletter subscriptions: http://www.mobilemarketer.com/ Giselle Tsirulnik Rimma Kats Jodie Solomon newsletter.php Deputy Managing Editor Staff Reporter Director, Ad Sales giselle@ rimma@ ads@ For advertising: mobilemarketer.com mobilemarketer.com mobilemarketer.com http://www.mobilemarketer.com/cms/ general/1.html For reprints: reprints@mobilemarketer.comMobile Marketer covers news and analysis of mobile marketing, media and commerce. The Napean franchise comprises Mobile Marketer, MobileMarketer.com, the Mobile MarketerDaily newsletter, MobileMarketingDaily.com, MobileCommerceDaily.com, MCommerceDaily.com, the Mobile Commerce Daily newsletter, MobileNewsLeader.com, Classic Guides,webinars, the Mobile Marketing Summit and the Mcommerce Summit and awards. ©2010 Napean LLC. All rights reserved. No part of this publication may be reproduced without permission.PAGE 2 Mobile Marketer MOBILE OUTLOOK 2012

INTRODUCTIONMobile steamroller transforms content, commerce and marketingM obile advertising, marketing, media and commerce will have a bright 2012 as consumers increasinglyrely on their mobile devices daily to shop, learn, research, Location-based advertising will be a hot topic in 2012 and will likely be onplay and engage. regulatory radar.Many brands and retailers who did not jump aboard the Mobile search will be in-mobile bandwagon in 2010, learned from their mistakes creasingly important inand took mobile more seriously in 2011. 2012 as the number of mobile-optimized Web sitesMarketers built mobile Web sites, developed apps, engaged skyrockets. Google willconsumers via rich-media mobile advertising, drove loyal- have a large part in growing the mobile Web ecosystemists in-store via mobile database and CRM efforts and dab- and therefore driving mobile search dollars.bled with new, sexy mobile technology such as QR codesand augmented reality. The guide The 2012 Mobile Marketer Outlook is spot-on in terms ofPredictions for 2012 what marketers can expect in the mobile medium in 2012.What should marketers expect in the year ahead? The insight and analysis by reporters and industry execu-Mobile payments will make headlines for most of 2012, tives shines light on mobile’s opportunities.as Google Wallet has paved the way for innovation inthe space. Thank you to reporters Chantel Tode, Rimma Kats and Lauren Johnson for writing these insightful articles. Also,Mobile advertising will grow to be healthy in terms of dol- much appreciation to all of the mobile mobile executiveslars spent. New ad units with more engagement opportuni- that took the time to provide feedback and insight. Thisties will increase spend in the channel. would have been impossible without you all.SMS will continue to be the No. 1 channel for cultivating This is the fourth Mobile Outlook and is featured on http://loyalty, as consumers become more open to opting into da- www.mobilemarketer.com for all of 2012. Read it fromtabases and hearing from their favorite brands regularly. cover-to-cover. Learn from the best practices, how-to’s, forecasts and case studies within. Share the guide willFragmentation will continue to be a problem in 2012 as friends, family and colleagues.more devices pop up. Marketers will continue to be chal-lenged by this. Best of luck in 2012 and beyond.Marketers will place a larger emphasis on smartphones,leaving feature phones as an after-thought. With smart-phone proliferation expected to grow exponentially in2012, it is no surprise that marketer’s will follow consum-ers to engage and excite them.Social media will play a crucial role in mobile market-ing initiatives, as brands and retailers alike realize theimportance of word of mouth in a world where consum- Giselle Tsirulnikers are comfortable sharing opinions and insights with Deputy Managing Editorone another. Mobile MarketerPAGE 3 Mobile Marketer MOBILE OUTLOOK 2012

AD NETWORKS2012 will be the year of tablet advertisingBy Chantal TodeM obile ad networks will be under pressure to Competition in the ad network space will heat up deliver better creative executions and wider next year as firms such as Millennial Media, Jumptap, campaign reach in 2012 as many brands move InMobi and Mojiva compete with the leaders in the spacebeyond the basics of mobile advertising. – Apple’s iAd and Google AdMob – for a portion of the resources being funneled into mobile advertising.As marketers learn more about what mobile advertisingcan offer, they are allocating a greater portion of their Mobile ad fundingspend to mobile ads and have higher expectations, ad In 2011, several ad networks received an infusion of cashnetworks will be competing to meet expectations to to help build out their mobile advertising offerings andwin business. will look to use the funding to help them compete for growing mobile budgets as well as try to take advan-“Going into 2012, mobile ad networks that find a way tage of opportunities such as continued grumblings thatto execute the latest creative and targeting capabilities Apple charges too much for the placement of ads via itsat scale will have a big advantage in 2012 as we expect mobile ad network iAd.more players to enter the space or existing smaller play-ers to converge,” said Susan Kuo, InMobi, San Mateo, There will be significant opportunities for those ad net-CA. “Those with the global footprint and technical and works that can offer engaging and rich brand experiencescreative expertise in these areas will ultimately prevail.” via mobile to large audiences.Pressure is on A growing opportunity for ad networks in 2012 will beAd networks will also be under pressure to better target tablets, which are being scooped up by consumers inmobile ads and improve ad creative. growing numbers and are quickly changing users’ media consumption habits.In 2012, creativity and bigger and better rich media ini-tiatives will be an important part of every ad buy. “Tablets will become an even larger opportunity,” said Anne Frisbie, vice president and manag-“The mobile advertising industry continues to grow at a ing director for North America at InMobi, San Fran-rapid rate,” said Amy Vale, vice president of mobile mar- cisco. “We expect to see this double in the U.S.,keting for Mojiva, New York. and will deliver strong results for both brand and performance marketers.”“Technology integrations between the creative en-ablers, ad servers and ad networks will make the whole Tablets will be a popular gift during the holiday season,process a lot easier, thereby taking mobile far beyond which will help create an even bigger opportunity forthe ‘experimental’ portion of the ad spend that has been brands to reach consumers via mobile ads on tablets.seen in years gone by,” she said. The payoff can be significant for ad networks and“I think we will see more companies roll out new ideas, brands that tailor their mobile advertising for thenew ad units and new executions, all so that advertisers tablet experience.can differentiate in this medium and get the best possi-ble ROI for their spend, whether it be based on brand lift, Consider the tablet experienceconversions or any other campaign objective. HTML5 is “We are seeing and will continue to see a demand for ‘allalso opening creative floodgates in mobile advertising.” things tablet,’ – both advertisers and users love the big-PAGE 4 Mobile Marketer MOBILE OUTLOOK 2012

ger screen and richer experience tablets offer,” Mojiva’s “In a market that is beginning to saturate mobile, ad net-Ms. Vale said. “Some ad units built specifically for tablets works are challenged to define their niche,” said Haraldare experiencing phenomenal user engagement because Neidhardt, chief marketing officer of Smaato, Redwoodadvertisers are really thinking about tablet differences Shores, CA.compared to other devices and how content and mediais consumed.” “I would recommend to invest in technology leadership and carve out a remarkable and dominant place in aThis is an exciting time for mobile, when all players have role as either premium- or reach-oriented, U.S.-centrican opportunity to gain from exponential growth. or international scope and excel from this position by working within industry bodies to push the envelopeAs a result, expect ad networks to investigate a myriad to grab more market share for the mobile advertisingof strategies intended to help them stand out and grab a ecosystem as a whole and therefore grow the marketbigger share of mobile ads. together,” he said.PAGE 5 Mobile Marketer MOBILE OUTLOOK 2012

ADVERTISINGLocation, 3D ad creative and social to dominate mobile ad strategiesBy Rimma KatsB rands and marketers are realizing the impact that “I think the innovation for 2012, will be that we location plays in their mobile advertising strategy. start to see commerce functionality creeping into Location-based technology will be the key driver in rich-media advertisements more and more for digi-not only bolstering in-store traffic, but also a good way to tal goods as well as some low to mid cost physi-serve relevant and targeted mobile ads to on-the-go users. cal goods segments, such as food and even clothing,” Mr. Limongello said.While 2011 was the year of engagement, 2012 will be theyear of relevance. If consumers are served a mobile ad “I think the challenge will be to move brandsthat does not interest them nor uses their device’s GPS from the content building phase where they fo-functionality, then they will be less inclined to click on it. cus their budgets on building sites and apps to the media phase where they spend their budgets on“Right now, there’s less friction all around,” said Tom media,” he said.Limongello, vice president of marketing at Crisp Media,New York. “New technology is making it even easier for “Also, technology issues behind deploying conversionusers to interact with mobile ads. tracking either on sites or for when users move from app to app have held back online segments from spending“If 2010 and 2011 was about touch gestures, 2012 willbe more about accelerometer enacted rotation of 3D adcreative assets, and potentially voice activated controlsfor iOS and Android devices,” he said.“Also, now that iOS and Android both have notificationtrays, it’s even possible for publisher apps to communi-cate with users more often, which may mean that spon-sors could push notifications from time to time fromadvertisers without breaking the social contract withits users.”Commerce into playThe main challenges of mobile advertising is not brandsare not using location-based technology or thinkingabout relevance.Consumers increasingly have their mobile devices onthem and running targeted ads with information thatwould appeal to them would not only help build thatbrand and consumer relationship, but have the user fur-ther engage with a mobile ad.Additionally,with iOS and Android now close to 15 per-cent of all Web purchases, it is clear that 2012 will bringa new focus on mobile commerce – not from near fieldcommunication, but from digital commerce.PAGE 6 Mobile Marketer MOBILE OUTLOOK 2012

more on mobile, specifically the travel segment has been “However, if pub-slow to move from test budgets to ROI driven budgets lic feeds weredue to lack of conversion tracking capabilities.” pulled directly into rich mediaOverall enhancement advertising pan-Advertisers should try to leverage their real-time feeds els, this approachand social profiles in mobile banners to make their ads also makes it pos-as dynamic as possible. sible for users to see the brand in-“RSS feeds or APIs are useful branding tools not only formation beforefor daily deal sites or credit card companies, but for in- they are promptedstance, auto or CPG brands who sponsor events such as to login.”March Madness,” Mr. Limongello said. Above the rest“Interestingly, there have been a lot of uses of live feeds Although many brands are still not realizing the poten-in desktop advertising, there has been less demand on tial of running targeted mobile ads, others are leadingmobile, potentially because logins are more difficult for the pack.social media on mobile,” he said. Victoria’s Secret has been running mobile ads for a while. The ads drive traffic to its in-store loca- tions, as well as its mobile apps and mobile-optimized commerce-enabled site. Recently, the company realized that running targeted, location-based ads is effective to getting that consumer to click the ad. “With the expected usage growth among advertisers becoming more mature, we expect 2012 to be an exciting year for mobile advertising,” said Kim Lu- egers, director of mobile and emerging media at Pandora, Chicago. “We expect many of the industry shaping organizations such as the IAB and MMA, along with their members, to make great strides in assisting with overcoming the many challenges mobile advertising faces such as measurement and ad unit standardization,” she said. There will be ongoing maturation of the mobile advertising marketplace in 2012 as mobile solidifies its presence as a valuable and viable marketing channel. “You have to embrace it,” Ms. Luegers said.PAGE 7 Mobile Marketer MOBILE OUTLOOK 2012

ADVERTISING AGENCIESAd agencies will embrace the marriage of digital and physical in 2012By Chantal TodeA dvertising agencies in 2012 will be looking to in- focused on bringing branded content and utility at the corporate mobile in a bigger way into their brand point of purchase to mobile, one area of focus in 2012 strategies, following a year in which smart- will be on bringing mobile marketing to more consumersphone penetration grew significantly and initial efforts and products.found success. “In 2011, the penetration and use of smartphones hasSome agencies have not been as aggressive in mobile gone through the roof across all groups,” Mr. Boyle said.as others because of challenges creating and executing “For an ad agency, this means that mobile is a channelmobile campaigns at scale. However, with big brands we can use for more products than last year and moresuch as Coca-Cola, Walmart, BMW and others active in groups than last year.”mobile over the past year, agencies recognize that theyneed to continue to build out the mobile services they Since women still typically hold the household’s purseoffer with either in-house capabilities or by partnering strings, agencies will need to pay close attention to fe-with third-parties. male mobile users in 2012.“The pace of the technological revolution is not de-termined by technology only but also by our willing-ness to use it – this year, we saw a significant changein behavior,” said Hugh Boyle, global head of digital forOgilvyAction, New York.Mr. Boyle points to the appearance of national televi-sion ads during primetime showcasing how a brand’sapp works. For example, British supermarket chain Tescoran a spot in 2011 that focused on its app. Mr. Boylesaid this points to the significant role that mobile playsfor consumers.“An app being advertised is not about early adopters,”Mr. Boyle said. “Marketers are being cognizant of thefact that people have smartphones in their pocket andare happy to use it if it is useful to them.”As mobile continues to rapidly evolve, agencies will needto master mobile compatibility, mcommerce, messagingand location-based services.Agencies are also responding to the significant changesin consumer behavior that are being driven by growingmobile penetration.Larger focus on mobile marketingWhile 2011 was the year that brands and their agenciesPAGE 8 Mobile Marketer MOBILE OUTLOOK 2012

Currently, most women use their mobile phones primar-ily for basic communications, according to research fromagency JWT. However, that could start to change.“You will see the mobile phone evolving into a woman’sSwiss Army knife, helping her manage all her identi-ties – mom, daughter, boss/employee, wife, friend – andresponsibilities – making social plans, shopping, payingbills – simultaneously,” said Ann Mack, director of trendspotting for JWT, New York.“As a result, brands will need to create seamless experi- ucts and marketing materials via mobile devices.ences optimized for mobile and local,” she said. QR codes and augmented reality are also exam-The marriage of digital and physical ples of how agencies can use mobile for a real-worldAgencies will also be well served by developing mobile connection in mobile.programs that integrate digital with physical. “The future is very much in the electricity between theMobile is a great way to bridge the physical with the digital and the physical,” OgilvyAction’s Mr. Boyle said.digital because users can interact with real world prod- “Treating mobile like a standalone technology is a mistake,” he said. “Treating it as an integrated part of people’s lives is the right way to do it. “Our recommendation is to look at ways to use mobile to interact with physical stuff.” Dual-screening A related trend that will pick up more steam in 2012 is the way that consumers increasingly consume media and engage with their mobile phones at the same time. “In the year ahead, you’ll see marketers creating more experiences designed for simultaneous consumption and engagement,” JWT’s Ms. Mack said. “People are no longer interacting with media and technology in a focused, linear way,” she said. Rather, they’re chatting on Facebook as they watch TV, texting while flipping through a magazine, gaming on their mobile while listening to music. “Brands should steer attention between one medium and another in a continuous loop, timing secondary content to stream alongside primary content.”PAGE 9 Mobile Marketer MOBILE OUTLOOK 2012

BANKING AND PAYMENTSMobile no longer a peripheral thought for bankingBy Lauren JohnsonE xperts agree that 2012 will be the year that mobile tinue to be an issue for financial institutions looking to will become an essential part of marketing mixes reach the most consumers. for financial institutions and payment companies. HTML5 is rumored to help solve fragmentation problemsIn particular, mobile advertising will increasingly be in 2012, but it is still unknown how effective the tech-used by banks and financial institutions to spread the nology will be for app developers.word about mobile services. Banks and institutions willcontinue to rely on mobile to develop easier banking “From a marketing point of view, the biggest challengesolutions for clients. is looking at mobile standards because fragmentation hurts us in order to be an effective ecosystem,” Mr.“One of the key things we are focused on its making Eisenman said.sure we are servicing our customers when they go tomobile,” said Russ Eisenman, head of mobile marketing “As soon as the market starts to stabilize, we will start toand partnerships at JPMorgan Chase, New York. see an increase in development,” he said.“Every year, our numbers double with the amountof consumers using our mobile services and weare focused on continuing to build our mobilebrowser, applications and SMS programs in 2012,”he said.Quick bankingAccording to Mr. Eisenman, Chase’s quick depositapp feature, which lets consumers snap a picture ofa check to deposit, has generated 2 billion depos-its since launching in 2010, showing that consumersare relying on mobile for everyday banking.Chase’s mobile strategy with apps is focused on beingon every platform for its consumers, and in 2012 thefinancial institution will roll out apps on more devicesincluding BlackBerry products and for Amazon’s KindleFire tablet.In 2011, big and small financial institutions focused ontranslating online banking to mobile for both consumersand business clients.Now that financial institutions have mobile servicessuch as apps, the challenge for banks will be keepingthem updated with features that are relevant and usefulfor consumers.Similar to other areas of mobile, fragmentation will con-PAGE 10 Mobile Marketer MOBILE OUTLOOK 2012

2012 will also see an increase in both consumer and business clients using mobile to manage their money. Additionally, consumers will be looking for multiple mobile platforms to bank on, whether it is done via mobile applications, Web sites, push notifications or SMS programs. “In 2012 ING Direct will look to create more value for clients in the mobile space,” Mr. Nicholson said. “We will do this by launching new features that will enhance the experience and drive everyday interaction and usage,” he said. “With respect to mobile advertising, we will continue to invest and test new ways to engage Canadians uncon- ventionally, specifically for the mobile channel.”Market on mobileAs more consumers have adopted to mobile devices inthe past year, including tablets and smartphones, finan-cial institutions need to start putting more of an empha-sis on mobile to beef up their other digital channels suchas social media.For example, this year ING Direct Canada ran a mobileadvertising campaign that asked consumers to “like” thebank’s Facebook page to play games that unlocked prizes.“I think 2012 will be the year that mobile is no longera peripheral thought for most marketers,” said MarkNicholson, head of digital and interactive at ING DirectCanada, Toronto.It will take on a more prominent role in the marketingstrategy, and marketers will look to create engagingcross-platform initiatives and experiences,” he said.PAGE 11 Mobile Marketer MOBILE OUTLOOK 2012

CARRIER NETWORKSMobile marketing offers carriers significant opportunities in 2012By Chantal TodeT he massive upgrades undertaken by wireless net- erability between bar code scanning technologies and works in 2011 will help encourage consumers enable seamless interactive marketing,” he said. to move more activities from a tradition wiredInternet connection to their mobile devices in 2012. Next year will also see greater standardization by wireless carriers to simplify mobile marketing.The combination of increased smartphone penetration,greater bandwidth speeds and consumers who want to Protecting consumersshift behavior to mobile will provide significant opportu- Already, carriers have been working with organizationsnities for marketers next year. Wireless carriers will build such as the Mobile Marketing Association, Interactiveon their efforts to roll out faster networks to subscribers Advertising Bureau and others to create a standard ap-by simplifying and improving the ability for marketers to proach to mobile marketing that protects consumersreach consumers via their networks with ads, games and while enriching their mobile lives.other unique content. Next year the fruits of these efforts will begin to appear.“Organizations, large and small, public or private, arelooking to find mobile-supported revenues,” said RobRussell, director of mobile marketing solutions at AT&T,Dallas. “These trends are top of mind with our customers,regardless of the direction of economy at large.“As a leader in wireless, AT&T is poised to support andspread mobile marketing solutions among business-es and consumers,” he said. “We plan to continue in-novating in the ways that matter most to businessesin 2012 to further the momentum we have seen thispast year with business adoption of mobile applicationsand services.“Whether our customers are looking for global machine-to-machine communications or mobile marketing solu-tions, we’ll center our efforts on the areas that providesignificant return on investment and help businesseswork better.”Bar code opportunityOne of the opportunities AT&T sees in 2012 is with 2Dbar codes.“Bar code scanning is making huge strides in the industryby preloading scanners on our devices,” Mr. Russell said.“AT&T has a vision to move the industry toward interop-PAGE 12 Mobile Marketer MOBILE OUTLOOK 2012

“It is paramount to their future that mobile carriers deliver intelligent content with that to add value and monetize their investments,” she said. “By achieving success here, opera- tors will develop further brand loyalty with their subscriber base and begin to monetize their resources.” “Today the primary form of mobile marketing is still done via SMS. This is the most basic mobile functionality and while it allows brands to reach consumers on-the-go, it does not provide the same engaging content as other data streams able to be delivered via a wireless connection.” One form of content that will be a big focus in 2012 is mobile video.“That step signifies the importance these carriers place “The surge in Internet traffic related to YouTube showson providing their subscribers with the services they consumers’ love of video,” Ms. Foster said. “Industry fore-want, when they want them, while protecting their pri- casts expect mobile video traffic to continue its steepvacy,” said Jean Foster, vice president of marketing for pace of growth.carrier services at Neustar, Sterling, VA. “The challenge and opportunity is for mobile carriers to“Carriers are well aware of the mobile dynamics at work help brands turn this obsession with video into mobileand are positioning themselves to support the forthcom- marketing,” she said.ing tidal wave of mobile marketing,” Ms. Foster said.“Privacy becomes a concern. “[The convergence of social, local and mobile is a trend that] captures the move by consumers to shift their so-“Furthermore, we expect carriers to explore new ways to cial lives to mobile and to make it locally relevant.”add value to their subscribers with additional networkintelligence and functionality.”Content is kingOne important area of opportunity for wireless carriersnext year will be in enabling the delivery of engagingcontent to subscribers.With smartphones expected to overtake feature phonesin 2012, the desire for more content is growing and re-flects the need for wireless networks to look beyond SMS.“Mobile carriers have spent vast resources to upgradetheir infrastructures to support the surge in mobiletraffic,” Ms. Foster said.PAGE 13 Mobile Marketer MOBILE OUTLOOK 2012

COMMERCERetailers will struggle with mobile point of sale payments in 2012By Lauren JohnsonD espite the rise in mobile commerce and payments Since launching in this year with advancements in initiatives such as September, retail- Google Wallet and NFC, retailers will continue to ers including Jambastruggle with point-of-sale mobile purchases in 2012. Juice, Gap, Ameri- can Eagle Outfit-Additionally, retailers and merchants need to view their ters and NJ Transitmobile properties differently from their Web properties in have begun using2012. In order to move forward, retailers need to tie mo- Google Wallet.bile payments with incentives that encourage consumersto use their mobile device, including mobile coupons and In particular, con-loyalty programs. sumers will begin to purchase bigger-“Merchants and retailers will continue to face the issue ticket items such as apparel on their mobile devicesof redemption at the point of sale,” said Chip Fishburne, in 2012.vice president of mobile commerce services at FirethornHoldings, Atlanta. However, retailers and merchants need to be more open to trying multiple mobile payment services in 2012 to“The mobile consumer continues to hear of the options find the sweet spot with their consumers.for mobile payments, but the merchants are waiting tosee what mode of payment will be broadly adopted,” “Don’t be afraid to place multiple bets and use exter-he said. nal partners, stay closely engaged with consumers and how they are interacting with your brand across multipleMobile catch-up channels,” Mr. Fishburne said.According to a Juniper Research study, smartphone ship-ments are expected to reach one billion by 2016. “Make sure you give them options and clearly communi- cate the value of each,” he said.As mobile device usage continues to grow, consumerswill have higher expectations in 2012. Plan on commerce When consumers use a retailer’s application or mobileIn order to catch up with consumers, businesses will Web site, they are looking for more than just informa-need to take bigger risks and develop a complete mobile tion - they are also looking for a unique experience thatstrategy around payments. mimics their device.2011 was the year of mobile payments for small-ticket With major brands and companies utilizing multiple mo-items, such as transportation tickets or food and bev- bile channels, consumers know they can get more outerage purchases, which was largely spurred by the in- of their experience than an exact replica of a company’stroduction of Google’s mobile payment program, Web site.Google Wallet. Not having a unique mobile experience is now an ex-Google Wallet works with merchants and retailers to set pense that retailers cannot afford.up a mobile payment solution using a mobile app thatconsumers can add money to via a credit card or by cre- “The approach of replicating your online site is a mis-ating a Google Prepaid card. take that I see a lot of retailers making,” said Roger Un-PAGE 14 Mobile Marketer MOBILE OUTLOOK 2012

derwood, senior vice president of ecommerce operations This year, The Finish Line introduced an application thatand technology at The Finish Line, Indianapolis. let users find specific items at the nearest location.“It’s important to understand how consumers are using In 2012, the retailer will continue to build a mobile strat-their mobile devices and respond by building the proper egy that differentiates itself from the company’s otherservices in order to fit needs,” he said. digital efforts.Retailers will also need to tie their mobile commerce “I think 2012 is the year retailers look at mobile com-solutions to more real-time features such as inventory merce as an opportunity to engage consumers in ain 2012. unique way,” Mr. Underwood said.PAGE 15 Mobile Marketer MOBILE OUTLOOK 2012

CONTENTMobile content needs to be practical, useful and resourcefulBy Rimma KatsM obile users are becoming more niche-focused ence is looking for, and we want to give them some- with regards to smartphone applications and thing they will come to depend on,” she said. “The companies are realizing that new content will challenge is inherent in the opportunity – how do wesucceed only if it addresses what the consumer wants organize our abundance of authoritative content in anto hear. easy-to-use way.While rolling out mobile apps is becoming a daily thing, “We have so much to offer our audiences that there willhaving a consumer download it and use it only once will always be another thing to develop and it’s a challengenot be good for the brand or the user. to find the best way to do that.”In 2012, companies will need to find their own niche Interactive contentand build a mobile application that syncs with who their Before companies launch a mobile app simply for thetarget user is. fact that their competitor has one or that they just want one, brands and marketers need to have a strong under-“Mobile is no longer a novelty, it is a necessity,” said Judy standing of who their audience is and who the app theyGalani, product manager at XO Group Inc, New York. are building is meant to reach.“Practical, useful and resourceful is what our audi- Personalization is going to play a big role in 2012. More apps, such as AOL Editions are letting consumers personalize the content that they want to see. Letting users personalize the content they want to see when they open up a mobile application helps build user engagement. “2012 will bring the expectation of complete accessibility and a fully-synched user experience,” Ms. Galani said. “The user’s actions and information will translate seamlessly from laptop to on the go. “We will take personalization of content delivery a step further by utilizing inherent mobile technologies and leveraging the consumer’s dependence on social media,” she said. Frequency Growth in the number of mobile users and frequency of use will reinforce the importance of enabling content to allow customers the ability to view, transact and apply for our products and services. The shifting mobile landscape and rapid changes inPAGE 16 Mobile Marketer MOBILE OUTLOOK 2012

technology such as increased tablet and operating sys- to the platform in order to provide the best possibletem availability and varied device capabilities, will cre- customer experience.ate a challenging environment for industry leaders tomaintain their current position. Providing content that is meaningful and relevant will start to become a requirement rather than a good idea.Creating content that is appropriate for mobile deviceswill continue to be a challenge. “State Farm will continue to focus on the consumer with our 2012 mobile strategy by providing additional access“We will continue to use mobile content to cross-mar- points that are easy to use, when and where the con-ket our products across all platforms while looking for sumer needs our services,” Ms. Winn said.ways to integrate with social media,” said Eli Winn,manager of enterprise Internet solutions at State Farm, “Our mobile content will be customer centric, providingBloomington, IL. solutions to address consumers’ expressed and antici- pated needs,” she said.“New form factors for mobile platforms, like televisionand automobiles will provide new and exciting opportu- “In general, mobile marketers should monitor new tech-nities,” she said. nologies in the mobile sector and look for opportunities to serve the consumer with simplified solutions that pro-Additionally, mobile content will need to be tailored vide value and are easy to use and access.”PAGE 17 Mobile Marketer MOBILE OUTLOOK 2012

DATABASE/CRMMarketers shift from building databases to successfully engaging themBy Rimma KatsU sing mobile as an integral part of the CRM strat- bile marketing companies who wish to grow their rev- egy will be a key trend in 2012, with more com- enues, it also will bring along challenges – particularly panies adopting common practices and new that consumers are likely to be inundated with multipletools, technology and data to fuel deeper engagement mobile messages on a daily basis.and relevance. This may decrease the penetration level of each cam-Many companies have experimented with SMS mar- paign and make it harder for advertisers to catch aketing programs and found that the medium provided consumer’s attention.additional information about consumers and improvedoverall consumer engagement. Marketers were able to However, this also represents a real opportunity forcapture mobile phone numbers, provide relevant offers marketers, as consumers will tend to remain subscribedand information specific to the individual and measure only to those programs that are providing them withthat consumer’s response. real value.“Over the past year, mobile marketing has swept over the Companies who can really give their database sub-nation and many companies have invested substantial scribers what they want will find themselves withresources in building a mobile database,” said Shuli Lowy, loyal customers.marketing and client services manager at Ping Mobile,Englewood Cliffs, NJ. “The overall focus for marketers should be to strive to build a relationship with each of their subscribers, in-“For those companies who have devised successful stead of just blindly pushing out content to a database,”database building strategies, the goal will now shift Ms. Lowy said. “This means they must be more creative infrom building a database to successfully engaging it,” structuring their campaigns to ensure delivered contentshe said. captures the consumer’s attention, and they should also“At the same time, we expect more and more companiesto realize that the ability to remarket to consumers isone of the foundational distinguishing factors that setsmobile apart from other forms of advertising, and to be-gin database and CRM focused mobile campaigns.2012 will see a major increase in the number of com-panies who are focused on mobile database buildingand CRM.Growing databaseThe growing investment in database building and CRMis indicative of the spreading awareness of the effective-ness of marketing via SMS and of the many consum-ers who are engaging with companies through theirmobile devices.While this represents tremendous opportunity for mo-PAGE 18 Mobile Marketer MOBILE OUTLOOK 2012

Carriers are becoming increasingly sensitive to this increase, and continue to tighten requirements for companies utilizing these shared codes,” said Randy Atkisson, executive vice president of sales and business development at Sumotext, Little Rock, AK. “Brands that are serious about their marketing efforts are already working with a dedicated short code,” he said. Mobile efforts Consumers want the ability to choose how brands com- municate with them – even when they have signed up and opted in for multiple channels of communication, how and when the brand communicates with them is critically important. Marketers have the opportunity to create customized, online preference centers that provide consumers with options for channels and messages that are relevant to their individual needs and lifestyles. In addition, one of the biggest opportunities for growth in the mobile channel is standard industry metrics and ROI measurement.be sure that they are using platforms which allow them While some mobile programs are transaction-based andto effectively profile and target their audiences. are measured based on the number of transactions and sales revenue, other mobile programs which focus on“From a marketing perspective, companies should con- providing information or brand engagement strugglesult with experienced industry experts to strategize their with how to measure success.campaigns in order to ensure their messages are clear,desirable to consumers, and delivered at the optimal mo- One way to overcome this challenge in 2012 will be toment,” she said. set key objectives for the mobile channel prior to creating the CRM program.“Above all, companies must remember that mobile in-teractions are powerful encounters which can generate “2012 will be different because even more brandsvery strong positive and negative reactions, and focus on are actively using or planning to use mobile as partgenerating a positive brand interaction in every contact.” of their marketing channel,” said Doug Yokoyama, vice president of mobile and emerging technologiesBrands and marketers are constantly looking for ways to at Epsilon.target within their own database. “We will see significant growth as it relates to imple-A big challenge is being presented due to the increase in menting SMS programs,” he said. “Marketers will betraffic across short codes that are shared among brands, more focused on gathering consumers’ mobile phonesometimes hundreds, and without much oversight by numbers and driving them to participate in ongoing dia-application providers. logues with the brand.PAGE 19 Mobile Marketer MOBILE OUTLOOK 2012

EMAILFragmentation will continue to haunt mobile email marketing in 2012By Lauren JohnsonI n 2012 marketers and brands to use email to ramp up “Don’t wait for a consumer to go home and turn on his their mobile email marketing strategy. With the grow- computer to sign up for your email marketing program,” ing rate of email opens done via mobile, there is a big Mr. Ju said.opportunity for marketers here. “Allow the person to sign up by simply sending a textThis year expect to see email marketing being used with message with his email address while he’s in the restau-several mobile initiatives, including application down- rant, hotel, store, museum, concert or amusement park.”loads, instant email sign-up and cross-platform featuresthat load email quickly and efficiently regardless of the Keep it freshdevice users are reading their email on. Unlike traditional marketing initiatives, one of the challenges of email marketing is constantly re-evaluating“With more and more consumers reading emails on your program and constantly finding new ways to im-mobile devices, marketers are now faced with the new prove it.burden of ensuring that their content renders reason-ably well across diverse devices,” said Manny Ju, direc- “With the speed that mobile is moving, any mobile strat-tor of product management at BlueHornet Networks, egy created on Jan. 1 will likely be obsolete by Septem-San Diego. ber,” said R.J. Taylor, director of product marketing at“Marketers do not yet understand the opportunitiesthat the mobile context provides. They still treat mo-bile email as simply a formatting exercise when in fact,it is a whole new opportunity that the desktop cannotduplicate,” he said.Untapped opportunitiesAccording to Mr. Ju, email is only being used in prelim-inary stages by brands and companies in their overallmobile initiatives.Similar to other digital marketing efforts, brands andmarketers need to remember to extend the mobile emailexperience past the initial click.To create an engaging post-click experience, rememberto keep mobile in mind. For example, redirecting usersto an un-optimized Web site in an email that they arereading from their mobile device is a bad user experiencethat they are likely to abandon.In addition to the new opportunities that mobile offers,brands and marketers should not forget how email is tra-ditionally used to build databases and instant email sign-up features will be used more by companies in 2012.PAGE 20 Mobile Marketer MOBILE OUTLOOK 2012

CEO of Paper Hat Press, New York. For Paper Hat Press, which is a digital publisher that sells personalized children’s books, being able to link a consumer’s shopping history with a targeted email message is key. If a consumer clicks on a link in an email and buys something, the company is able to tell that the transaction came via email and can send other relevant emails to consumers in the future. Marketers and brands will also need to continue testing email subject lines for 2012, per Mr. Naik.ExactTarget, Indianapolis, IN. Email marketing is more than just a one-hit approach.“Quarterly evaluation and adjustments will ensureyou stay on track and create meaningful experiences If a consumer did not open an email, marketers need tofor your customer and conversions for your business,” try variations on the subject lines until they find one thathe said. generates successful opens.2012 will also bring more experimentation with email “Batch and blast email campaigns will continue to pro-marketing being tied to other mobile initiatives, includ- duce poor results and unengaged email databases,” Mr.ing SMS and push notification programs. Naik said.With an increase in apps over the past year, brandsshould leverage their email campaigns by placingcalls-to-action that promote their mobile servicesin emails.This can be done with a click-to-downloadfeature for apps or a click-to-call feature forsmartphone owners wanting to opt-in to anSMS program.Another issue that mobile email marketing willface in 2012 is relevancy and making sure thatemail messages can target specific users, whichis a common problem for all email marketing.Data is kingBrands and marketers can expect to see moredata being used to segment email blasts to users.“There will be an increased focus on dynamic, tar-geted emails based on an individual user’s inter-ests and activities,” said Manish Naik, cofounder/PAGE 21 Mobile Marketer MOBILE OUTLOOK 2012

GAMINGBrand integration in mobile gaming will drive mcommerceBy Rimma KatsB rands and marketers are seeing the potential of using mobile games to reach a broader audience and companies such as HSN are bridging the virtualand real-time world together.While 2011 was a successful year for gaming – com-panies such as McDonald’s, Pizza Hut and HSN incor-porated their brand into mobile games, 2012 will bringin more opportunities. Partnerships with mobile gam-ing companies will prove to be an effective way to driveuser engagement.“In 2012 we will thoughtfully pursue and participate in Marrying mcommerce with gaming helps brands furthermobile gaming opportunities that are a good fit with build a relationship with consumers. The mobile gam-the HSN brand in order to extend our brand presence ing world must deliver quality entertainment that is trulyand reach a new audience that doesn’t know our sto- engaging and let companies introduce their personalitiesry,” said Jill Braff, executive vice president of digital and products to users.commerce at HSN, San Francisco. Socially mobile“Combining our mobile shopping experience and casual 2012 is going to be the year where mobile social gamesgames is a natural progression for our consumer - she and social networks start to break into the mainstream.loves both, she said. “I don’t think games on mobile have truly become social“We want to further differentiate the HSN shopping ex- between players and devices, and 2012 is the year whereperience by bringing together content and commerce in publishers and developers begin to crack the code,” saida fun and innovative way.” Chris Cunningham, cofounder/CEO of appssavvy, New York.Play first “With NFC, better processors and voice recognition com-HSN teamed up with PlayFirst for the Cooking Dash ap- ing to mobile devices, the possibilities on the gamingplication that incorporates chef Emeril Lagasse’s cook- platform with social interaction is endless,” he said.ware and kitchen electrics line and lets players buy theproducts without leaving the app. In 2012, publishers and developers will have to find a way to maximize the revenue they drive from theirThe Cooking Dash app includes a new restaurant venue apps and fine-tune micro-transaction strategies andcalled “HSN Cooks with Emeril” that lets players inter- ad-supported models.act with virtual representations of his cookware andkitchen electrics line, and buy the real products via the One of the biggest challenges will be for a developer tomobile game. form a seamless layer between location-based games and social platforms on the Web and mobile.A partnership such as that is an ideal way to not onlyengage users, but also add a commerce element to the “Location-aware multi-user games are the next bigmobile mix. thing,” Mr. Cunningham said.PAGE 22 Mobile Marketer MOBILE OUTLOOK 2012

LEGAL/PRIVACYWhich will be the most discussed mobile legal issues in 2012?By Chantal TodeT he number of legal battles in the mobile space Patents and privacy will continue to grow in 2012 thanks in no small Legal battles involving mobile-related patents were big part to mobile’s rapid growth, which has raised thenews in 2011 and understandably so. Microsoft was re-stakes considerably for many companies. ported to be making millions on the sale of Android devices because of patent licensing deals it has with theAs a result, legal wranglings over who owns the right to device manufacturers.use a particular mobile technology will continue to be aheadache for many in 2012. At the same time, the indus- An unlikely alliance between Apple, Microsoft, RIMtry could see greater enforcement around mobile privacy and others spent billions buying bankrupt Nortel’s pat-next year now that regulators have turned their focus on ents simply to protect themselves against intellectualthe burgeoning mobile space. property suits.“Patent issues will continue to be a major source of dis- On the privacy front, regulators turned their focus tocussion in the mobile world, which will dovetail with an mobile in 2011 and this scrutiny will be more intense inacceleration in deals,” said Jason Koslofsky, an attorney 2012. If no privacy legislation is passed this year, thenwith ArentFox LLP, Washington. new legislation is likely to be introduced next year.“Big companies will continue to compete in the mobile One area of focus for regulators is the Telephone Con-space, not only through marketing and sales, but also sumer Protection Act, which Congress has expressedthrough patent licensing strategies designed to obtain a an interest in updating. Such a move could impact textpiece of every mobile-related transaction,” he said. message marketing.“One solution companies are employing is buying up The Federal Trade Commission is likely to address howpatent portfolios and companies to attempt to head off children use mobile apps and smartphones, which couldpatent infringement claims before they arise. Expect to have significant repercussions for mobile marketing.see more of these patent portfolio deals at eye-raisingsums and mobile patent litigation to continue to impact The FTC has proposed changes to the Children’s Onlineevery major mobile company in 2012.” Privacy Protection act that would make geo-based location or identification of a mobile device similar to the IP address for a computer. “The information would be considered personally iden- tifiable information, which means marketers would not be able to market to kids without parental consent,” said Linda Goldstein, partner and chair at Manatt Phelps & Phillips, New York. “And, obtaining consent in mobile is difficult because there is no robust system developed for obtaining parental consent,” she said. “I think you are going to see a lot more enforcement in the kids area as it relates to mobile.”PAGE 23 Mobile Marketer MOBILE OUTLOOK 2011

Location-based services percentage of overall sales.Following a growing number of news stories about howit easy it is to locate a smartphone and what the impli- As the volume begins to reach hiogher levels and acations are for consumers, location-based services and few mobile payments systems gain share, this willapps will be an important part of the discussion sur- also present some privacy issues.rounding mobile and privacy in 2012. “This is the year you are going to see mobile pay-“The need for location information to provide effective ments systems emerge and move toward mobile com-search and other services for mobile is inherently in ten- merce,” Manatt Phelps & Phillips’ Ms. Goldstein said.sion with the desire for privacy and to not publicize in- “With that will come additional privacy considerationsformation,” ArentFox’s Mr. Koslofsky said. such making sure that the person authorizing billing is i n fact authorized to do so.”“Many users may not understand what information isgathered and how it is used,” he said. Mobile companies will be well served to pay attention to which direction the regulatory wind is blow-“This will be one of the most discussed mobile legal is- ing and to make sure that they are providing propersues in 2012 as companies, Congress, and users struggle notice regarding their privacy issues.to balance the usefulness of the information with thedesire to keep it private.” “Companies should adopt the same privacy principals that they do on their Web sites because the FTC is view-While mobile commerce is growing rapidly, it is still small ing the two similarly,” Ms. Goldstein said.PAGE 24 Mobile Marketer MOBILE OUTLOOK 2012

MANUFACTURERSOEM focus on smartphones in 2012 to leave feature phones in the dustBy Chantal TodeM obile device manufacturers will seek to acceler- ate growth for their smartphone businesses in 2012 as feature phone sales continue to col-lapse. Introducing lower cost smartphones that offermuch of the functionality of high-end devices is oneof the major ways manufacturers will try to achievethese goals.Building viable smartphone businesses will be especiallyimportant for companies such as Nokia and Research inMotion, which both saw their fortunes dwindle in 2011because they were not positioned properly to take ad-vantage of the transition to smartphones.“The key thing that is strangling a lot of folks is the fea- With only two new smart devices coming out next yearture phone market,” Michael Morgan, an analyst with built on the Windows operating system, Nokia is notABI Research, New York. “We always know that it would likely to gain significant ground in the near future.be eaten up by smartphones but it seems to be collapsinga bit faster than expected. “[Next year] is going to be the proving point for Nokia,” Mr. Morgan said. “Either they are going to turn around“Manufacturers want to establish faster growing smart- and do it in 2012 or they are going to have to make somephone businesses faster than they are losing business on big changes again.”the feature phone side,” he said. “It is a race for survivalfor a lot of these folks.” The situation is not likely to be much better for Research in Motion, which went through a restructuring in 2011Apple stomping competition as sales faltered.Nokia saw sales waiver in 2011 and lost ground to Apple,Samsung because of its weak position in smartphones. “RIM is going to have a rugged 2012,” Mr. Morgan said. “In 2012, RIM is transitioning to the QNX platform and moving into smartphones – they are hoping this will put them back into a technologically relevant space.” Samsung’s well-balanced portfolio However, other manufacturers are well positioned to take advantage of how mobile is evolving and, as a result, will cement their leadership roles in 2012. Samsung, with its well-balanced portfolio of high-end and feature phone devices, is one of these. “Samsung will still be looking good in 2012 as the Galaxy platform establishes itself as a key driver of the AndroidPAGE 25 Mobile Marketer MOBILE OUTLOOK 2012

Motorola advance access to new technology or treat it the same as other manufacturers. “Motorola has been marginally successful and now it is owned by Google,” Mr. Morgan said. “The question is will Google strangle Motorola or be a benefit to it,” he said. As interest in smartphones continues to grow and consumers integrate the devices into their everyday lives, handset manufacturers will look for ways to bring many of the features that have previously only been available at the high-end of the market to a wider audience. Lower prices a must “In order to make smartphones mass marketable and so that the carrier can offer it for free with a two-year contract, manufacturers need to drive the price down under $200,” said Wayne Lam, senior analyst for IHS, El Segundo, CA. “Making the hardware low enough in cost while also ad- dressing the functionality of smartphones is key,” he said. “We are seeing a shift and more of a focus on selling to that type of demographics.”platform,” Mr. Morgan said. A wider audience for smartphones could be good news for marketers.Apple is also likely to continue to perform well next yeareven though it lost its leader Steve Jobs, who retired in “There is a lot more interaction in the ecosystem of ser-August and passed away a couple of months later. vices with smartphones,” Mr. Lam said.“Steve Jobs didn’t leave the company without instill- “The marketing potential is significant because the ad-ing a technology map for at least two years,” Mr. Mor- dressable market becomes a lot bigger with lower costgan said. “Apple will be able to subsist off of that easily phones,” he said.through 2012. Functionality such as touchscreens and near-field“They have a portfolio of devices with low price points communication are likely to make their way to theseand high-end devices that are still proving to be very low-cost smartphones.successful,” he said. “There should be some interesting business models in-The wildcard is Motorola, which was acquired by Google troduced next year where Google absorbs the cost of in-in August for $12.5 billion. In the ensuing months, a lot cluding NFC or Mastercard absorbs the cost to enableof questions have arisen about whether Google will give mobile payments,” Mr. Lam said.PAGE 26 Mobile Marketer MOBILE OUTLOOK 2012

MEDIAPublishers to eye mobile monetization in 2012By Rimma KatsI n 2012, media giants and publishers will not only think of mobile as another revenue driver, but will focus more on how they can monetize their mobile applica-tions and build readership.In 2011, tablet devices emerged and publishers quicklyhopped on the mobile bandwagon to offer their readersanother screen to absorb the editorial content. However,the media sector is experiencing a paradigm shift fromonline to mobile and publishers need to rethink theirstrategies to stay on top of the game.“The mobile channel has given publishers an additionaltouch point to connect with consumers as they increas-ingly turn to a wide variety of devices to search for, readand are entertained by content,” said Christine Cook, se-nior vice president of sales and advertising operations atThe Daily, New York.“Tablet devices allow publishers to earn revenue fromsubscriptions and advertising, as well as revenue sharefrom in-application purchases – a healthy and diversifiedrevenue portfolio,” she said.Rise of tabletsApple’s iPad has been a game-changer for the publish-ing industry with The New York Times, The WashingtonPost, The Daily and Conde Nast being one of the first totake advantage. The Financial Times Web App was built using HTML5 technology.Additionally, many publishers have rolled out mo-bile apps both in Apple’s App Store and in Google’s HTML5 enables open, cross-platform rich-media stan-Android Market. dards that help brands’ and agencies’ display advertising achieve the creative and reach across variousHowever, throughout 2011 there have been con- mobile devices.flicts about Apple retaining 30 percent of the revenuefrom subscriptions sold on iTunes. Although Apple contributed significantly to the growth of HTML5 – first by refusing to let itsThe Financial Times took a different route to drive mobile iOS devices support Adobe Flash, then by launching its ownsubscriptions and launched a browser-based applica- rich-media mobile ad network, iAd, many industry expertstion instead of making the content available via Apple’s still believe that HTML5 is helping companies create richApp Store. content and bypass the App Store.PAGE 27 Mobile Marketer MOBILE OUTLOOK 2012

However, others do not agree. part of the media mix, on a CPM basis,” Mr. Hayden said. “There just isn’t enough real-estate or ‘lean-back’“There is a lot of, in my opinion, wishful thinking that attention span.HTML5 will replace native apps,” said Brennan Hayden,vice president at Wireless Developer Agency, East “Mobile media value, then, has to come from superiorLansing, MI. quality – showing the right ad, to the right people, at the right time, with a perfectly trackable, highly profit-“This thinking is bad for mobile media, because native able and frequently converting call-to-action,” he said.mobile apps are arguably the most attractive mobile- “Mobile is the perfect medium in theory for this objective.”specific media innovation yet,” he said. “This thinkingleads to the presumption that what we call the digital According to Mr. Hayden, publishers that want mobilespace will absorb and assimilate the mobile space with media monetization should use 2012 to build a premi-regard to monetization and publishing, and in turn has um product that is probably worth a premium, at leastgiven some pause to aggressive investment plans in mo- relative to digital.bile-media-specific technologies and business models. “Today, any mobile inventory that manages to mon-“This pause is a mistake, but nonetheless will likely etize at a premium is sold as digital in the $10 CPMmake the 2012 landscape more difficult for loss-making range, with no particular mobile innovation, and nomobile and app businesses.” premium over the equivalent digital ad,” Mr. Hayden said. “2012 ought to be the year to change at leastAccording to Mr. Hayden, media and publishers will need that equation.”to see continued innovation in this space, however, therewill be less venture investment in the short term.In 2011, mobile apps were where the action was,almost exclusively.In 2012, the more mature companies will field morewell-rounded uses of mobile technology.“The effective, repeatable and attributable executions– especially QR codes and location and apps – will in-creasingly be deployed in a holistic fashion with tradi-tional media such as out-of-home, print and television,”Mr. Hayden said.“This year’s trials and innovations in this integrated mo-bile paradigm will be commonplace – even imperative– by the 2012 Christmas season.”MonetizationMobile media – as a separately monetizable entity – isfighting the laws of physics, not technology, when itcomes to monetization.“It cannot possibly replace or even supplement othermass media, dollar-for-dollar, and become a significantPAGE 28 Mobile Marketer MOBILE OUTLOOK 2012

MESSAGINGLoyalty and rewards programs will rely heavily on SMS/MMS in 2012By Lauren JohnsonI n 2011 brands focused on building databases via mes- “Additionally, the abil- saging campaigns that offered incentives such as ity to not only track a sweepstakes in return for an opt-in. In 2012, market- mobile campaign buters will focus on ways to cultivate these databases and track the results andengage the consumers within. redemption by consumer is important,”Brands and companies will also start to tie their SMS ef- she said.forts to more measurable programs, such as mobile cou-pons and loyalty programs. However, mobile redemption “The days of one-waywill need to be more universally acceptable by retailers messaging will changein 2012. in 2012. Brands want and need to know more demographic information about“The ability to generate unique coupon codes and inte- consumers than a cell phone number and that they textgrate into point-of-sale systems for retailers and manu- in a particular keyword.”facturers will be critical,” said Carrie Chitsey, CEO of 3Seventy, Austin, TX. Universal redemption One of the key challenges for brands and companies in 2012 will be continuing to get retailers on board with mobile redemption that is tied to SMS. With more companies experimenting with SMS and loyalty, retailers need to understand how to process mobile coupons at the point of sale. “In order to do mobile coupons and promotions in-store, retailers have to be able to access mobile coupons,” Ms. Chitsey said. “The method of coupon delivery has to be agnostic so retailers and consumers have channel of choice,” she said. “One example of an effective and easy messaging promo- tion is to run a sweepstakes through mobile to develop a database and then begin the communication channel.” By tying SMS programs with rewards and loyalty programs, consumers are more comfortable opting-in to text messages and the channel will continue to increase in 2012. Despite the rise in mobile device ownership, SMS re- mains the most universal way to reach consumers via text message.PAGE 29 Mobile Marketer MOBILE OUTLOOK 2012

“Understand that one size does not fit all, not all of yourconsumers have the same use of mobile devices,” Ms.Chitsey said.“Finding the happy medium of rolling out multichannelsto see how consumers interact will help establish a fu-ture roadmap for innovation,” she said.Call to mobileAccording to experts, 2012 will bring more calls-to-ac-tion for SMS programs.“I think we’ll see more loyalty clubs triggered by SMScalls-to-action,” said Jeff Hasen, chief marketing officer brands offer consumers multiple means of engagementof Hipcricket, Kirkland, WA. - for example an SMS call to action and a QR code will both lead to a richer experience via the mobile Web or“We surely will experience calls to action in tradition- MMS,” he said.al media like TV, radio and print ads, and we’ll also see In 2012, mobile messaging will continue to battle spam and SMS programs that bombard consumers with irrel- evant, constant messages. According to Mr. Hasen, there will be more than two tril- lion messages sent and received in the United States in 2012, showing the opportunity that marketers will continue to have to reach a broad range of consumers with the channel. Apple’s iMessage service, which was rolled out this year to let iPhone owners with iOS5 text other iPhone owners for free, will pave the way for mobile messaging in 2012 by opening up a free text message program. RIM’s BBM group messaging service is another example of a wireless carrier helping consumers adapt SMS into their everyday lives. Older demographics, which are typically thought to not use mobile technology as much, will increase in 2012. “We recommend brands offer multiple means of engagement,” Mr. Hasen said. “By giving consumers a choice in how they want to interact, brands will increase participation, drive sales and gain loyal customers,” he said.PAGE 30 Mobile Marketer MOBILE OUTLOOK 2012

MUSICMusic industry must set focus on mobile discovery in 2012By Lauren JohnsonW ith the introduction of more music streaming options that are either free or low-cost, such as Spotify and Rdio, the challenge for mobilemusic marketers in 2012 will be discovery.And, with the numerous choices that consumers have foraccessing music on their mobile devices, companies needto use added marketing efforts, such as social media, todraw consumers to their products. It is no longer enoughto just offer free music to users.“Discovery is a huge issue now that everyone has accessto every track,” said Kristin Frank, general manager ofMTV and VH1 Digital, New York.“Starting at an empty search box on a music service canbe very daunting,” she said.“Social networks and all the data they produce aroundmusic make for some interesting opportunities inproduct development.”Music to my ears2012 will see more mobile-specific features added tomusic services, such as location.Brands and marketers can tie location into its servicesto make music relevant and offer recommended tracks brand’s app will continue to be a challenge for the in-for users. dustry in 2012.MTV uses location in its Music Meter application, which For 2012, MTV and VH1 plan to update and release appli-lets users discover new music based on what is trending cations that work with user-generated content, includ-on the Web. ing polls and features that let users give instant feedback on what they like and are listening to.“Go beyond simply playing back music or music videosand really consider what makes your product unique,” Interactive features that let users interact with con-Ms. Frank said. “What does your product do best and tent in real-time will be a valuable asset that musichow can that be applied to the music conversation?” brands and companies can use to measure their marketing initiatives, which has always been an issueMusic programmers have traditionally used mobile ap- with mobile.plications to target smart device owners, but with theplethora of music apps on the marketplace, getting con- Shared tunessumers to find, download and engage with a particular 2012 will continue the transition from personal musicPAGE 31 Mobile Marketer MOBILE OUTLOOK 2012

libraries to shared music clouds, which shows the con-tinuing need from consumers to access as much musicas possible.As long as consumers can get music, they do not carewhere it is from.“There is one key challenge - reliability and accessibleconnectivity,” said Michael Cerda, senior vice presidentof product at VEVO, New York.“People don’t want to burn their entire data plan on mu-sic, but as Wi-Fi becomes more prevalent this issue willgo away,” he said.With the increase of the cloud, users will start to use mobilemusic in more social environments and around the home. Tablets will also play a key role for mobile music in 2012 with their lean-back tendencies. Consumers will also be looking for more features than just playing a song on their mobile devices. In 2012, users will be looking for more utility options that enhance the music listening experience, which includes games, facts, video and trivia. However, consumers are not looking for a full package of information and are only interested in pieces of content that is tailored for their music. Simply put, the digital music industry is shifting towards a strategy that matches the basic principles of mobile. Music companies need to pull nuggets of information from multiple places to give consumers a tailored, inclu- sive experience. Additionally, it will be more important in 2012 to think about where consumers will be using mobile music services. “Find the sweet spot between use case, ease of use, context, rights and how it can become more than audible background,” Mr. Cerda said.PAGE 32 Mobile Marketer MOBILE OUTLOOK 2012

RESEARCHMobile stats to remember in 2012By Rimma KatsM obile as an advertising and marketing vehicle will continue to grow and advance in 2012. Consum- ers will be come even more dependant on theirmobile devices for shopping, searching and researchingin 2012 and more marketers will take note.Here are some stats that are indicative of what to expectin 2012:1. The spend on local mobile advertising will approach$1 billion by the end of 2012 as campaign objectivesevolve to meet the location-targeting abilities of smart-phones, according to BIA/Kelsey.2. Twenty-nine percent of mobile phone owners today forty-two percent of tablet owners multitask while onbelieve their handset will be the primary device for their their devices. In particular, consumers are switching overentertainment needs in the future, per Experian Simmons. their entertainment use from desktop to mobile devices.3. Android could generate more than $1 billion in mo- 5. In-stream video ads, which appear as a commercialbile advertising revenue for Google in 2012, according to break in full episodes or before video clips, are picking upPiper Jaffray. momentum and outperforming online ads, according to Rhythm NewMedia.4. Tablets are rapidly emerging as the go-to device and us-age will definitely increase in 2012. According to Google, 6. According to Knotice, the number of emails opened on a mobile device jumped 51 percent in the first half of 2011 compared with the last quarter of 2010 – indicative that the number will grow in 2012 as smartphone penetration grows. 7. While iOS and Android are the top operating systems, Windows Phone is gaining speed. IOS continues to trump Android when it comes to click-through rates for mobile ads by operating system. However, Windows Phone beats them both, suggesting there is an opportunity here for marketers who want their advertising to stand out, per Smaato. 8. Mobile bar codes made a big impact in 2011 and the number will only increase. According to ScanLife, there was a 440 percent increase in scans year-over-year from the third quarter of 2011, indicating consumers are more willing to interact and engage with content delivered through QR codes.PAGE 33 Mobile Marketer MOBILE OUTLOOK 2012

9. Location-based targeting grew 50 percent quarter- of smartphones and tablets are protected with securityover-quarter and made up 66 percent of all the targeted software, according to Juniper Research.audience campaigns, according to Millennial Media. 13. Google continues to triumph in mobile search and10. Mobile will be the primary device for entertainment was the top destination among mobile sites in the monthneeds. According to Experian Simmons, 29 percent of of April last year attracting 55.3 million unique visitors,mobile phone owners today believe their handset will per Nielsen.be the primary device for their entertainment needs inthe future. 14. Mobile banking is gaining traction in the United States with gains in consumer adoption and avail-11. Social and mobile go hand in hand and according to ability of mobile banking services across a wide arrayABI Research, mobile device users are heavily engaged of devices, however 47 percent of financial eBusinesswith social, with 73 percent of mobile device owners managers do not know how to measure thein the United States using their phones to visit social ROI of mobile, according to Forrester Research.networking sites daily and, sometimes, more than oncea day. 15. Wireless data service revenues in the United States grew 23 percent in the first quarter of 2011 com-12. Privacy and security are still big issues when it comes pared with same quarter last year for a total of $15.4to mobile. Despite a steady increase in threats from de- billion, proving that it will continue to grow in 2012,vice loss and threats, malware and viruses, only 4 percent per Chetan Sharma Consulting.PAGE 34 Mobile Marketer MOBILE OUTLOOK 2012

SEARCHLocal, social will play prominent role in searchBy Lauren JohnsonM obile search will continue to evolve in 2012 with complete tasks and save money,” Mr. Chu said. an emphasis on localization and social media, according to experts. “This helps Bing for Mobile better understanding user in- tent, context and location, which in turn allows Bing toMaking search results more relevant for consumers is provide answers, help with decisions, and even recom-increasingly important, especially for mobile when con- mend additional things to do after completing the im-sumers have less time to find what they are looking for. mediate task at hand,” he said.Voice will also begin to play an important part in mobilesearch in 2012. Voice will also become key to mobile search with the launch of Apple’s Siri service this year and advancements“Search has evolved beyond simply typing text and with Google Voice.navigating to third party sites via blue links,” saidAndy Chu, director of product management for Bing at Ask and findMicrosoft, Seattle. According to search executives, mobile search has made a significant switch from being a quick place for ques-“In the end, we are driving towards a mobile service tions and answers.where Bing will be the must-have mobile companionservice that delivers exactly what you need, whether Mobile search is not about exploration, and in 2012 itthat is booking a restaurant reservation or buying a pairof shoes,” he said.Local intentWith the increase in making content relevant for usersvia mobile applications and Web sites, mobile searchneeds to catch up to be useful for consumers.Mobile search needs to be viewed differently than desk-top search, which is when consumers have more time toresearch what they are looking for.In 2012, different channels will be integrated into mobilesearch, including social media.For example, Bing believes that one way consumerswill find relevant results is to see what their friends aresearching for.Mobile search will need to give consumers all importantinformation directly through a search instead of clickingon links to make search easier for users in 2012.“Ultimately, we want to help users make fast, more in-formed local decisions on-the-go but also help peoplePAGE 35 Mobile Marketer MOBILE OUTLOOK 2012

will continue to be focused on finding common ques- more two-way conversation with users and more inter-tions while on the go. active features.“Mobile search has become ubiquitous — whether some- Mobile search results need to utilize data sources thatone is looking for a restaurant they should try that aren’t traditionally found through search such as user-evening, or the best hotels at a given travel destina- generated content, per Mr. Rupp.tion, search has become the first place people go whenlooking for information from their mobile devices,” said The mobile search industry will also continue to be clut-Jason Rupp, senior director of product management at tered with companies trying to tap into exactly whatAsk.com, Oakland, CA. consumers are looking for.“On top of that, people want immediate gratification “Just a few years ago, your mobile experience was so lim-from their mobile search experience,” he said. ited that search couldn’t be localized, and you couldn’t expect more than local business listings or a few searchConsumes expect more from their mobile devices and with links when looking for information,” Mr. Rupp said.the advancements in location-based services, users ex-pect to get results immediately where they currently are. “Now, people can control their entire lives on a mobile phone and there are thousands of companies vying toThe coming year will also see mobile search become a get users the information they want,” he said.PAGE 36 Mobile Marketer MOBILE OUTLOOK 2012

SOCIAL NETWORKSWho will win the mobile, social war in 2012?By Rimma KatsB attle lines will be drawn in 2012 between Google, “2012 will usher in the maturation of geo location,” Mr. Facebook, Twitter and Apple, with each fighting for Houghland said. “Increasingly, consumers seek greater direct integration into mobile operating systems. rewards than a badge, or an alert.Google has already started integrating Google+ into An- “They want to unlock rewards, experiences, brand anddroid and Twitter has deep integration into Appe’s iOS. community recognition and personalized offers,” he said.In 2011, Facebook and Apple saw the impact that social “Mobile social will overlay and enrich the real world.plays in the mobile space and next year, companies –both big and small – will be incorporating some aspect “Technology requirements and budgets will have to growof social into their mobile strategies. significantly.”“Consumers will eviscerate the line between mobile so- Mocialcial networks and social networks in 2012,” said Curtis In addition to geolocation, brands, marketers and pub-Hougland, founder/CEO of Attention USA, New York. lishers are increasingly incorporating social in their mobile marketing efforts, whether it is placing a Facebook“More than one-third of people already access Facebook icon on their mobile application to get users to “Like”through mobile,” he said. “Twitter and Facebook aregrowing more closely together through features such asthe Activity Stream and Ticker, respectively.”Social changeWhile Google and Apple looking to outdo each oth-er in the mobile space is no surprise, Facebook willincreasingly make its way into the mobile picture.“The question has become whether Facebook is satisfiedwith being an app or has to own its own mobile future,”Mr. Hougland said.Additionally, location will play a big role in the mobilesocial space.Users are increasingly using applications such asFacebook, foursquare and Gowalla to check-in toplaces and let their friends and family know wherethey are.Companies such as Cabela’s and Crumbs Bakery are real-izing the impact of this and offerings consumers specialsand incentives when they check-in.In doing so, consumers can share these offers with friendsand family and thus begin a social change.PAGE 37 Mobile Marketer MOBILE OUTLOOK 2012

feedback from our consumers in a way that is both relevant and personal,” he said. “2012 should be another great year for mobile, with an- ticipated advancements in both devices – iPhone 5, iPad 3, Android Tablets – and network speeds – 4G, it will be easier than ever to stay connected to your social networks.” Key to success Successful mobile and social marketing campaigns depend on providing the user with a highly personalized content experience. If the users do not feel that the content is tailored for them or if it is not relevant, then they will not want to interact with it nor tell their friends about it. “We use user-generated social content to complement our expert weather content, providing the mobile user with complete coverage of their local weather,” Mr. McCormack said. “It’s about generating content that’s meaningful to the user that’s very specific to them,” he said. “In other words, hyper-local equals hyper-relevant.”them or using Twitter to get users talking.Recently, The Weather Channel integrated local, weath-er-related tweets across its television, Web and mobileplatforms to increase the company’s two-way dialoguewith consumers.The Weather Channel decided to make social a partof all of its platforms to helps the company tell amore complete story of how weather events impactconsumers locally.“Weather is the ultimate social content,” said PatrickMcCormack, vice president of mobile sales and strategyat The Weather Channel, Atlanta.“Adding The Weather Channel Social to The WeatherChannel’s mobile platforms lets us integrate live localPAGE 38 Mobile Marketer MOBILE OUTLOOK 2012

SOFTWARE AND TECHNOLOGYMobile payments, social mcommerce and QR codes will dominate in 2012By Chantal TodeM arketers must gain a better grasp of mobile companies don’t deliver on these expectations, custom- software and technology in order to provide ers will not have patience and will look for other options the kinds of experiences that consumers are de- resulting in wasted investments.manding now that mobile is mainstream. “In 2012, we anticipate an exponential increase in totalThe goals of these efforts should be to ensure the best marketing dollars flowing through the mobile channel –possible consumer experience by seamlessly incorpo- specifically the smartphone mobile channel.”rating mobile technology into a brand’s marketing ef-forts, optimizing mobile content across multiple devices Mobile payments and commerceand leveraging mobile’s unique characteristics such as Mobile payment and commerce technologies such aslocation-based services and personalization to meet Google Wallet, Isis and others that are yet to come willconsumers’ needs. play a big role in brands’ mobile software and technology plans next year.“As smartphone penetration is reaching significant lev-els, we are reaching a tipping point with the technol- Much, although not all, of the activity will take placeogy moving from emerging to mainstream,” said Rebec- around dedicated mobile applications.ca Kane, vice president of brand and customer-specificmarketing at Ahold USA, Quincy, MA. “In response, the “There are a lot of competing technology platforms outmarketers will now be making the shift from watching there to support mobile marketing and commerce,” Msand waiting to actively engaging. Kane said. “To some extent, therefore, winners and losers will begin to shake out with respect to the providers of“With the move from emerging to mainstream, custom- these technology solutions.”ers will have greater expectations – expectations aroundspeed, simplicity and relevance,” she said. “If marketers/ In 2012, as even more people embrace the rich capabilities offered by smartphones, marketers will look for ways to take advantage of mobile software and technology that address way that mobile is changing how consumers engage with each other, content and brands. “From the conversations that we’ve been having with our clients, the outlook [for mobile software and technology] is very strong,” said Chia Chen, senior vice president and mobile practice lead for Digitas, Boston. “Paradoxically, it has less to do with the specific mobile technologies and software and more to do with the culture of mobility that the mobile technologies have enabled,” he said. “This culture of mobility has changed the way people connect with each other, content and brands.” Onset of MoSoComm Key areas of opportunity for marketers beyond mobilePAGE 39 Mobile Marketer MOBILE OUTLOOK 2012

payments include the convergence of mobile, social andcommerce as well as consumers’ increasing use of smartdevices while they are watching television.However, marketers will need to prove the effective-ness of their mobile efforts in order to gain support forincreased investment.“We are excited about two sets of mobile software/tech-nology opportunity for marketers,” Mr. Chen said. “QR codes will become mainstream, becoming not“One is MoSoComm, the convergence of mobile, social only the dominant 2D symbology, but also one ofand commerce, especially as loyalty platforms start re- the most utilized mobile media elements lever-ally tapping into the social graph,” he said. “The second aged by marketers,” said Laura Marriott, CEO ofis Co-Consumption, which is the engagement of people NeoMedia, Atlanta.across more than one screen at the same time. “2D won’t be the only bar code symbology that reaches“The key challenges are around the need for integrat- new heights of adoption in 2012, we will also see 1D ac-ing mobile technologies and software into the mar- cess via mobile continue to climb – and as part of this,keters’ existing technology and software infrastruc- we will see retailers offering scanning applications bun-ture and real ROI cases to support the investment dled into their offers to encourage consumer purchases,”needed to integrate mobile technologies into the she said.marketing programs.” “QR codes will also begin to be launched alongside NFCQR codes initiatives in 2012, as the technologies are increasing-QR codes saw significant uptake in 2011 and this will ly seen as complementary, rather than competitive, tocontinue in 2012. each other.”PAGE 40 Mobile Marketer MOBILE OUTLOOK 2012

TELEVISIONMore TV programming to use mobile, tablets to complement viewing experienceBy Lauren JohnsonW ith the introduction of the next-generation iPad this year, and all of the other tablet devices rolled out, the broadcast industry founda platform that made sense as a second screen for con-tent with its size and image quality. In 2012, broadcast-ers will need to continue to take advantage of tabletsand combine mobile into their overall digital strategy.Additionally, broadcasters will need to find new ways totie relevant and personalized content into their mobileservices. Experts forecast that broadcasters will begin tostream more select pieces of content onto mobile plat-forms.“It’s still the early days for the mass market to adoptwatching TV on tablets and smartphones, but in 2012you’ll continue to see a lot more content companies andcable,satellite and IP service providers push into thisspace,” said Jay Lee, senior director of product develop-ment and management at ESPN Mobile, Bristol, CT.“We expect some partnerships between companies toalso emerge as common challenges such as authentica-tion, rights management and mobile advertising becomepervasive,” he said.Mobile actionIn 2012, broadcasters will continue to roll out program-ming on mobile devices. more,” Mr. Lee said.However, mobile is not at the level that it is treated as acompletely separate channel for TV. Instead, mobile will “But what we offer has to make sense for the consumerbe mixed into companies’ marketing mixes by using it – we have to help solve problems for fans, not just givewith on-air, Web and other channels in 2012. them novel things to tinker with,” he said.Live streaming will be used by broadcasters in 2012, but “We’re looking at how we can do that across a number ofit will be used strategically with nuggets of information. mobile products and fully expect that us and others willMobile apps and Web sites will continue to select only learn a lot through trial and error.”the most useful and relevant content. Mobile will continue to struggle in 2012 with measure-“We think with sports in particular there’s an opportu- ment. Unlike other channels such as traditional broad-nity to augment live TV with shoulder content on other cast, mobile is still difficult to measure and gauge whatdevices like scores, stats, in-progress highlights, and types of things viewers are most interested in.PAGE 41 Mobile Marketer MOBILE OUTLOOK 2012

Pick your properties developed for both smartphones and tablets.For a broadcaster, companies will need to hone in on andpick specific programs to push a mobile emphasis on. CBS is also testing live streaming for particular events, particularly with sports coverage.“We have to look at mobile show by show and find thebest strategy for each,” said Marc DeBevoise, senior vice Recently, sports fans could watch college football gamespresident and general manager of entertainment at CBS via the CBS Sports Mobile app, which is something CBSInteractive, New York. plans to continue to offer for specific games that viewers may not be able to watch elsewhere.“It’s all about cross-platform and doing the right thingfor the brand and show,” he said. Broadcasters will continue to struggle to decide which mobile platforms are worth investing in.For example, CBS is the network that airs the GrammyAwards. In the past, the network has used a companion “As products continue to evolve, you might build some-application that viewers could use to predict the winners thing one year but don’t want it to be obsolete nextand play trivia games. year,” Mr. DeBevoise said.In 2012, CBS will continue to use mobile and Web plat- “We have to make sure we build the right things andforms to build buzz around the Grammy’s with an app know when to outsource appropriately,” he said.PAGE 42 Mobile Marketer MOBILE OUTLOOK 2012

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Marketing outlook mobile driving the bandwagon

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