Mobile: so popular with consumers, why not with marketers?

I read with interest (actually disappointment) the recent research titled ‘The State of Digital Marketing 2012′ in Australia published by Econsultancy and as reported in Marketing magazine. What particularly caught my eye was the fact that mobile ranked a frustrating eighth on a list of 11 different ‘online’ marketing techniques being used by client-side marketers.

I’ve spent seven years evangelising mobile in five countries with some degree of self-interest being involved in companies doing messaging, mobile web and one year now in mobile payments and retail mobile solutions. Seeing how mobile is being embraced in the US and in the UK and the investments being committed to the platform is reassuring but we do need to step up our game here in Australia.

This ranking is unfortunately, for now at least, backed up by numerous reports on the small budget allocations for mobile. eMarketer reported that in 2011, 10% of an average adult’s day is spent on mobile yet mobile only accounts for 1% of advertising spending. According to a 2012 report from Flurry Analytics, mobile is grabbing 23% of consumers’ time. However, mobile receives approximately 1% of budget money.

What is particularly interesting is that the lack of participation in mobile by marketers is in stark contrast to the actual usage of mobile devices by consumers. Australia has 52% smartphone penetration and that’s growing rapidly. Nearly 80% of people now browse the web on their phones and almost 60% access social networking sites.

The best way to demonstrate that mobile does work is to present some real world case studies. Not a bunch of aggregated statistics from small or self-selecting sample groups but real case studies. Darren Press from Third Screen agreed to release some detailed examples to help in my efforts to evangelise the opportunities leveraging the various aspects of the mobile ecosystem.

Before I discuss some local Australian ‘real world’ SMS and MMS messaging based case studies I want to reflect on the massive influence mobile is having in our everyday lives in both media consumption and buying habits.

InMobi reported in Febraury 2012 in their global study of more than 20,000 users across eight global regions that users spend more time on their devices than watching TV. The same study reported that 66% of mobile users are just as comfortable in receiving mobile advertising versus TV or online ads. Marketing reported that 80% of consumers watch TV with a mobile in their hand.

There is currently very little detail available but it will be interesting to how the iPad and tablets in general affect this trend. The tablet’s form factor is now a watchable platform for rich media distribution and yet still has many of the technology limitations of mobiles. The retina display and the new HTML5 immersive advertising formats combine for an interesting extension to mobile.Mobile in the supermarket

Google reported on its Mobile Ads Blog that this year 44% of last minute holiday shopping searches was expected to be mobile and 79% of smartphone users currently use their phones for price comparisons, product searches and locating a retailer.

So why then are marketers failing to adopt the mobile channel in greater numbers? Mobile is the brand in the hand and one of the most powerful one-to-one mediums available to marketers.

According to Darren Press, who has been in mobile marketing for over five years, “no amount of technology will fix a bad campaign and many early campaigns were poorly planned and badly executed.” Press further stated that “mobile is like any other medium: understand the audience, their usage of mobile and follow some simple rules and mobile will succeed.”

Those simple rules:

  • don’t try to use mobile with a campaign designed for another medium,
  • don’t use for pure branding, wasting a consumer’s time,
  • deliver the consumer a real benefit or value, and
  • think about frequency of engagement and follow up.

Let’s look at some local case studies of mobile marketing in fitness and in retail, two major industries that Third Screen work with in delivering mobile solutions.

Last month one of Press’s fitness clients, which has three fitness clubs in Sydney’s eastern suburbs and which has been using SMS marketing for some time, entered into its first MMS campaign for one of its clubs. The campaign was highly targeted to convert prospective clients who had visited the gym into full time members. The video MMS campaign generated around $8000 in new membership sales. While this might appear to be an insignificant and relatively small figure, consider that when the cost of messaging is taken into account, their actual return on investment was a huge 2952%!

Press claims that “the use of MMS instead of only SMS in a program of follow up and lead generation works well to provide a new experience and being able to deliver video snippets that are interesting generates excellent retention and conversion”.

Another standalone fitness club in April brought in 64 new membership sign-ups on the back of a similar MMS campaign. Based on the average revenues per new member this represents somewhere in the region of $25,000 over six months. Its ROI was over 2700%.

Some important things to appreciate with both these mobile messaging campaigns are that the audience was very well targeted and were people interested in fitness and health, the MMS message contained both informative and entertaining content that created a positive emotion in the consumer and contained a real benefit and saving by responding and ‘buying,’ and that they capitalised on the immediacy of mobile and the instant gratification achieved by responding.

In the retail space, the IGA Supermarkets program now encompasses over 100,000 opted-in members across an increasing number of IGA banner groups: close to 100 individual stores across Victoria, New South Wales and Queensland. Each member receives a Wednesday morning mobile message with six offers each week. Each offer can be purchased at the local IGA store by using their membership card or keyring tag. The discounts on the six promoted items are automatically deducted at the checkout. Where possible the message is delivered as an MMS, and where the phone is not compatible an SMS is delivered.

The IGA mobile loyalty and promotional platform is a well integrated and managed initiative that delivers the consumer real value with targeted promotions and is now part of the ongoing marketing framework delivering some extraordinary results.

The mobile program is based around driving increased sales, increased spending and increased visitation. With membership cards linked to actual transaction data and the mobile message, the ability to track and analyse results is extensive. The IGA suppliers frequently achieve significant increases in sales results for their promoted items, illustrating the receptiveness of shoppers to the mobile channel. Furthermore, key indicators such as frequency of visits and basket spend are also up. The program allows IGA to deliver immediate benefits to the consumer while assisting the store network to drives sales and loyalty in the extremely competitive environment of supermarkets.

There are many traps in mobile and many hidden treasures for the creative. The IGA program is an excellent case study in having creative boundaries being pushed and investing in closed loop integration to provide tangible measurements and tracking. The best way to learn mobile is to analyse the good and the bad. If you want to know more about the mechanics and specific results of the IGA program, Darren Press (dp@thirdscreen.com.au) is willing to share that and more retail or health case studies.

Just to balance out the great ROI campaigns, here are two absolute disasters. They are my favourite failures as they are such extreme disasters that most people are bemused by the fact they were even carried out. Despite being so blatantly ‘wrong’, campaigns like these are still happening, thankfully with less frequency.

The first example was a major fast food chain offering a free product by simply texting in to a premium number. Unfortunately, the promotion was run on radio at drive time and required the consumer to text their name, address, date of birth and favourite product. All this while driving and expecting people to remember a premium number that if mistyped could subscribe you to $4 daily tarot card readings!

The second had a well-known brand purchasing an opt-in consumer mobile list and sending a video. However, the video was a copy of their current TVC and contained no offer, no benefit and appeared to simply be an exercise in brand reinforcement through a medium where such campaigns are not well received. Suffice to say, the opt-out rate was one of the highest I’ve ever seen for mobile.

Fortunately, there are some marketers who do get it!

At the recent Mobile Marketing Association Forum in Singapore, Coca-Cola’s director of international media stated categorically that “SMS is still the number one priority in mobile at Coca-Cola”. It comes as no great surprise, then, that this global mega brand adopts the 70:20:10 strategy. That is, 70% of their marketing budget is allocated to SMS/ MMS, 20% to mobile web and only 10% to apps.

At the iStrategy conference in Sydney earlier this year, Fairfax reported that they adopt a ‘mobile-first’ strategy. That is, all new products are first optimised for the mobile channel before anything else. At the same conference, Dominos was discussed as being a ‘mobile business’ which dedicated 50% to digital and 50% to mobile. That’s right, a pizza company calling itself a mobile business!

Other local studies suggest that 2012 may finally be the year that mobile is given far more serious attention by marketers. An annual study by the Australian Marketing Institute in 2011 titled the ‘Senior Marketing Monitor’, that reported on the budgets for 365 senior marketers, showed that mobile marketing was one of the top five media channels that marketers plan to increase in 2012. It is the first time that mobile has appeared in the top five. The study also noted that 46% of marketers are actively using mobile, including SMS, well up on the 34% reported in 2009.

So where does your organisation sit when it comes to mobile? Will you be one of those who will increase their budget spending on mobile this year? Does your company have a strategy for SMS or MMS for that matter? How ready is your own website for the 80% of consumers who regularly now browse the web on their phones?

The disappointing spend on mobile reflected in the various research may in fact be more a reflection of the cost than a reflection of the commitments being made. Dabbling in mobile, especially messaging, is not expensive. It would be interesting to analyse ROI levels instead of raw spend. Then maybe mobile would be close to number one.

 

Joe Barber
BY Joe Barber ON 22 June 2012
Joe Barber is a 25 year veteran of technology companies with the last five years focussed on mobile and retail. He is currently CEO and founder of Edge80.com with other notable start-ups under his belt being Third Screen Media, Sniip and Planet Internet. Joe has lived and worked in the US, Malaysia and parts of Europe and talks at numerous trade events worldwide.