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

1. Mobile Marketing
Creating a Stronger Value Equation
for Marketers
By Steve Scherbak, Vice President of New Media
Steve Scherbak,
Vice President of
New Media
September 2007 valassis.com

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 million
Over 200 million mobile subscribers subscribers currently own and operate 250 million active mobile devices – illustrating
in the U.S. that many people own more than one phone. Because of its ubiquity, accessibility
180% rise in text messaging, and orientation as a personal device, the mobile channel represents an enormous
year-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 content.
in 2006*) But making the most of this opportunity demands more than just understanding
mobile technology. To stay competitive, marketers must create mobile programs
Key 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 code
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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.
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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 J2ME
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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 into
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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; RedPlum.com 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
,
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