Mobile Marketing: Creating a Stronger Value Equation for Marketers (by Steve Scherbak)


Published on

How marketers can use mobile marketing to drive brand awareness and open dialogue with consumers who prefer to interact with brands this way

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Mobile Marketing: Creating a Stronger Value Equation for Marketers (by Steve Scherbak)

  1. 1. Mobile Marketing Creating a Stronger Value Equation for Marketers By Steve Scherbak, Vice President of New Media Steve Scherbak, Vice President of New MediaSeptember 2007
  2. 2. Mobile Marketing Creating a Stronger Value Equation for Marketers By Steve Scherbak, Vice President of New Media September 2007 Since the birth of mobile marketing in early 2000 in Europe and Asia, text messaging has become an established advertising channel. Steve Scherbak, Vice President of New Media for Valassis, is a noted pioneer in this area with a unique perspective on content delivery, mobile media and infrastructure. Through the evolution of this channel, he has worked with leading national and international brands including MasterCard, Reuters, Warner Music Group, Cox, Verizon, Adidas and Comcast to develop mobile marketing strategies and innovative integrated programs.Seize the opportunity Widely referred to as the “third screen, mobile is a marketing channel that has been ” growing exponentially over the past decade. In the U.S. alone, over 200 millionOver 200 million mobile subscribers subscribers currently own and operate 250 million active mobile devices – illustratingin the U.S. that many people own more than one phone. Because of its ubiquity, accessibility180% rise in text messaging, and orientation as a personal device, the mobile channel represents an enormousyear-over-year, since 2002 opportunity for marketers who want to reach consumers with timely, engaging and(from 2.1 billion to 135 billion relevant offers and 2006*) But making the most of this opportunity demands more than just understanding mobile technology. To stay competitive, marketers must create mobile programsKey subscriber demographic that engage consumers, and simultaneously meet measurable business objectives.of 18- to 36-year-olds How mobile expands options – for customers and marketers Most marketers agree that the most successful campaigns and promotions are those that give consumers a choice regarding how, when and where they would like to receive offers from brands. Since mobile marketing is 100% opt-in, it gives the subscriber control over engagement. This may be why U.S. mobile data users rated SMS, or text messaging, as the third most preferred way to receive product and service information, and 24% of mobile phone owners prefer to receive coupons and offers on their handsets.** Mobile marketing offers brands an opportunity to open and maintain a dialogue with consumers who prefer this channel, and allows advertisers to: • Build an opt-in database of consumers who prefer the medium • Promote brand awareness and engagement • Improve customer loyalty • Drive consumers online, in-store and to events • Capture additional data like email, age and ZIP codeWHITE PAPER: Mobile Marketing: Creating a Stronger Value Equation for Marketers 2
  3. 3. Practical considerations for mobile in the marketing mix 1. Mobile performs best when integrated into a complete program Mobile is a highly fragmented channel that has to assimilate thousands of mobile device models; hundreds of operating systems, display types, APIs, and a multitude of mobile operator networks and their distinct technical limitations and policies. Executing mobile campaigns requires domain expertise that includes a mix of technology, marketing science and creative execution to reach consumers in a personal and engaging manner on a 2 x 2 inch screen. As a result, many specialty firms have emerged to deal with the various facets like connectivity, application development, campaign management and creative execution. However, mobile marketing cannot be sustained or executed in a vacuum; it is best applied when it leverages multiple media channels like print, online, display and broadcast. Many of the mobile agencies and service providers can influence only what happens on the handset, and therefore fall short in their value promise to the advertiser. Strong marketing campaigns are designed with the big picture in mind, but with access to a broad set of media tools to deal with the practical considerations; interactions must entice and delight the consumer, and proper rewards will ensure better participation and response. Ultimately, however, mobile should be used when the overall marketing strategy calls for it, and that requires a partner that has deep experience in marketing services and in execution along a broad range of media. 2. Identify your objectives Start with your marketing objectives, not a mobile solution. What is the purpose of the campaign? This will ensure you select the right Mobile element. Some examples: • Promotion: Activate consumers with branded text/SMS games, mobile coupons, sweepstakes, etc., • Brand Engagement: Utilize mobile and interactive Web where user- generated programs draw attention and consumers can interact with the brand • Brand Awareness: Utilize mobile Internet display ads that consumers can click through to branded landing pages and WAP sites • Drive Traffic (in-store or to the Web): Consumers opt-in to receive a unique code or coupon on their phone that can be redeemed in-store or online to unlock a special offer • Program Support: Augment an online initiative with mobile message alerts and viral referral mechanisms that can extend the reach of Web-based campaigns and provide specific URL links to keep consumer involved and up to date with a campaign It is important to establish early in the conceptual process if and how mobile might play a role in reinforcing the objectives of a campaign; understanding where and how to leverage mobile marketing and determining what is achievable with mobile is often more critical to overall success than what one does with the channel.WHITE PAPER: Mobile Marketing: Creating a Stronger Value Equation for Marketers 3
  4. 4. 3. Know your demographic Mobile is not a niche audience. Understand the mobile user demographic you are trying to reach, and how they use the services. • Urban: highest concentrations of users • Ethnic: 50% of Caucasians are mobile data users, while Hispanic, Asian and African Americans skew between 63% and 71%*** • Ages: 18-36 year olds are most active and mobile-savvy (approx. 80%), while 53% of all 37- to 53-year-olds are active data users**** 4. Don’t overlook incentives The offer is very important in any mobile campaign, and many small rewards that have high frequency will usually outperform a single prize of large value. Think of the dynamic behind the McDonald’s Happy Meal and the prize that comes inside – the reward is small, but has maintained a high novelty value because it’s part of the transaction and it turns over frequently. Mobile campaigns that provide immediate feedback and a small reward will generate higher response rates and can also be effective in driving a consumer to the Web or store when they receive a URL or secure code in that messaging transaction. Mobile marketing mechanisms The majority of mobile marketing campaigns we are familiar with are those used in American Idol, Deal or No Deal, Dove’s Real Beauty campaign, voting across various reality shows, and some tied into sporting events like World Cup Soccer and the Super Bowl. Almost all of these are SMS-based marketing campaigns due to the fact that text messaging provides the advertiser with the greatest penetration in the U.S. market – over 95% of the mobile population. However, there are three mobile marketing mechanisms that can be used to reach consumers with advertising and promotional media: • Messaging • Mobile Internet • Handset applications and content Messaging options Messaging options include SMS and Multimedia Messaging (picture, video and text embedded). Both are services available on mobile phones, and SMS allows the subscriber to send and receive messages up to 160 characters in length and is billed at a rate of $.05 to $.10 per message or lower, based on the typical calling plan. MMS allows the subscriber to send and receive multimedia elements like audio, video or graphics, and is the underlying format to support user-generated campaigns where the handset is a media capture device. Mobile browser and WAP (Mobile Internet) For mobile subscribers, accessing content through a mobile browser or WAP (mobile Internet) is the online equivalent of advertising published on a mobile Web. Mobile carriers operate WAP portals for subscribers to find content like news, sports and entertainment via search. Advertisers can create branded sites, WAP sites that drive mobile consumers to information and services that they can integrate and repurpose from their Web sites. Handset applications and content “Applications and content” refer to downloadable files (binaries) like wallpapers, ringtones and games that publishers and third-party providers sell to mass markets or offer as rewards for mobile campaigns. Applications like those built on J2MEWHITE PAPER: Mobile Marketing: Creating a Stronger Value Equation for Marketers 4
  5. 5. (Java Platform) and Brew are similar to online applications that one might download to his or her computer. The most common applications are used for multimedia players, content management, games and other enhanced services. Short codes and their functionality The short code is the five-digit code that registers a client and their mobile program or campaign; it’s like a billing phone number to the mobile operators and it can be used to create a hierarchy of campaigns using keywords (WIN, MAINTENANCE, SERVICE, SAVINGS, COUPON – a word the client chooses) that identify the mobile campaigns. In other words, we could create a campaign for new customer incentives with one keyword and have two other ongoing programs for service alerts and loyalty. Each keyword then represents the database of subscribers/users who opt in for that campaign. Key Terms at a Glance Stands for Short Message Service SMS Allows for one- and two-way messages of 160 characters between cell phone users and advertisers Nearly 100% of handsets are SMS receive-capable (CTIA 2006) Multimedia Message Service MMS Transfers graphics, video clips, sound files (e.g., ring tones, wallpaper, pictures) Very small market in the U.S. due to lack of interoperability standards Wireless Access Protocol – allows users to access the Internet using their mobile devices to view content and download applications WAP 64 million mobile phone users are currently using WAP on their phones Five-digit number to which a mobile subscriber would send a text message Short or keyword Code May be shared or dedicated to a campaign and is leased on a monthly basis Identifies the “owner” of a mobile campaign to operators Optimizing value for marketers and consumers In order to successfully design and execute integrated campaigns with the right mobile mechanisms and mix, marketers must have other media channels at their disposal. Valassis leverages an extensive portfolio of online media, email marketing, and interactive and print products to support a comprehensive suite of mobile capabilities that includes simple text alert delivery mobile polling, sweepstakes, games, creation of mobile Internet sites and WAP display advertising. Our services fall into three main categories: Mobile Marketing Suite, Mobile Internet/WAP Advertising and Mobile Portal Services. • Mobile Marketing Suite – Valassis emphasizes three distinct categories of programs within the Mobile Marketing Suite: Promotion Activation, Mobile Loyalty Programs and User-Generated Campaigns. Our greatest differentiator for mobile marketing solutions is our ability to integrate them tightly with our 1 to 1 Solutions like Web/microsite creation, data capture, email marketing, sweepstakes rules administration and database management and integration. Additionally, we can tie mobile messaging intoWHITE PAPER: Mobile Marketing: Creating a Stronger Value Equation for Marketers 5
  6. 6. a client’s display or POP signs to activate lightweight loyalty programs, deliver surveys or provide the consumer additional brand information to their mobile phone, or provide incentives that drive them back to brand Web sites. Consumers can even submit user-generated content in the form of pictures or video from their mobile phone. • Mobile Internet (WAP) Advertising and Site Creation – Valassis maintains our network of WAP publishers and carriers, and can place media buys for our clients on the mobile Internet here in the U.S., and soon internationally. We help brands design and place the display ads across our mobile carrier partners’ networks – and nearly 250 additional publisher sites where they can target the desired demographic. The clickable display ads can direct the visitor to a single landing page with more info, or to a WAP site that Valassis designs and manages for the client. • Mobile Portal Services – Valassis’ new consumer portal aggregates both local and national deals, values and coupons across a wide variety of lifestyle and shopping categories; will launch in the U.S. in January 2008 and will make our clients’ weekly coupons and offers available to consumers across a variety of categories like MyTown, Style, MyHome, Grocery, Dining, etc. The site will feature sponsored game categories, where Valassis will allow sponsors to engage consumers with mobile sweepstakes, promotions and games each day in order to extend the reach of the site when consumers are offline. Incentives will be awarded via mobile messages that drive participants back to the portal or to brand microsites, if desirable. Conclusion The mobile channel has much to offer those marketers who are able to leverage it in the right concentration and mix with other supporting media like print, online, display and broadcast. Mobile marketing that is designed in a vacuum often yields little value to the consumer or the marketer; poorly developed expectations and/or those campaigns that do not deliver measurable results are often the by-product of mobile marketers who don’t have access to other needed channels in such a way that saves the client time and money. As a trusted name in marketing services around the world for over 30 years, Valassis 1 to 1 Solutions has become an expert in developing solutions that deliver measurable results. Valassis’ mobile network provides top advertisers proven ways to build and retain mobile audiences and learn more about those consumers, and remains another avenue for brands to deliver their offers how, when and where consumers want them. * CIBC World Markets, IDC 2006, IN-STAT/MDR, CTIA ** Jupiter Research, Jan. 2007 *** Telephia Customer Value Metrics 2007 National , **** Telephia Customer Value Metrics 2007 National ,WHITE PAPER: Mobile Marketing: Creating a Stronger Value Equation for Marketers 6