Making Mobile Marketing Work for Your Business: Interactive Digital Marketing For the Young and the Not So Young

New media is enabling marketers to target a wide-ranging group of highly interactive and motivated consumers. This is the first in a series of seven posts on mobile marketing. This post reviews some of the key features of the digital environment that are fueling mobile's growth.

As reported in a recent Adage article, "Interactive- and digital-marketing budgets have experienced a healthy increase. The first quarterly Epsilon CMO Survey reveals that nearly two-thirds of chief marketing officers said their interactive/digital marketing budgets have increased in the past year, while 60% have seen their traditional advertising budgets go south. The findings reflect marketers' growing need to better target their campaigns, according to Steve Cone, CMO of Epsilon. The results show that because of the economy, companies are really trying to identify the consumers that are very active in communicating with each other through social computing, blogging or podcasting. The more popular interactive and digital channels that marketers said they are keen to start experimenting with are social computing (42%), which includes word-of-mouth, social-networking sites and viral advertising; blogs (35%); podcasting (31%); and mobile devices (29%), which include phones and PDAs. The study found that some marketers have already started incorporating these tactics, with 19% of respondents already using blogs, 18% making use of podcasting and 22% using mobile devices as part of their marketing mixes. Blogging is a major activity among a relatively educated, affluent and not-as-young-as-you-would-imagine age group. And when you're talking about podcasting and mobile devices, that's a younger demographic. Marketers are trying to target the broadest age range of consumers, and that's reflected in how these break down from top to bottom. You can find hundreds of thousands of people who are really active in these areas, and they are going to be extremely receptive to offers of relevance. The study also revealed that CMOs are relying on analytics, CRM techniques and other measurable marketing strategies when determining who they want to go after."

Of all digital media, mobile is the channel that is growing most rapidly. As reported in Mobile Marketer "It’s no exaggeration to say that mobile advertising is about to revolutionize the way that marketers reach out to consumers for branding or customer acquisition or customer retention purposes. A well-targeted mobile ad campaign will strengthen bonds between brand and consumer." Mobile Web usage was up 29.4 percent from the first quarter of this year to the second. There are many reasons why Mobile marketing is destined to keep growing including the fact that mobile is a less expensive, targeted channel in an uncluttered medium.

As reported in a recent Mobile Marketer article, "A common theme voiced by mobile marketers is that to get high response rates from young consumers, they have to issue a simple, [clear]direct call-to-action that is tied to an appealing incentive and with the need to be informed that they have the ability to opt out at any time. The call-to-action must [offer] a direct incentive that is related to some type of prize or reward. The messaging of the campaign should be very straightforward and feed control to the respondent."

While the youth demographic may be the most receptive to mobile campaigns, other groups are catching on quickly. According to Dan Miller, the executive vice president of Neighborhood America. “Mobile phones are the one common device that we have with us all the time, and the youth demographic is key, but its appeal is extending across all demographics. Over time, mobile is appealing to broader and broader demographics, from older people and high-end, high net worth all the way down to blue-collar workers—the complete socio-economic spectrum...”

Digital marketing is tapping into new communication trends. In this downturn, the metrics that come with digital tactics are crucial and a significant reason why this demand is increasing. The way you approach the call to action is also important, particularly with younger audiences. However, as noted above, interactive digital's base is not exclusive to the young as it is growing accross many age demographics. In the digital marketing milieu, mobile is emerging as the hottest commodity in the expanding digital marketing universe.

Next: Understanding the Differences Between Mobile and Online Marketing / Research Your Target / Presentation Tips / Design Tips / Applications and Video / Key Success Factors

Digital Marketing Will Thrive in a Downturn

Digital marketing is poised to grow during this downturn. Although the marketing world has been hit hard, as reviewed in a recent Convince & Convert article some marketing channels will thrive in this environment. During the last recession, online advertising, plummeted 27% over two years. But according to the author, this time will be different. "Not only will online marketing survive, it may actually thrive during the lean times, continuing its inexorable theft of ad spend from traditional media tactics. Online is far more mature and proven now"

There are several reasons that account for digital marketings viability in a downturn. Online does not require a long term commitment and it is typically less expensive than an offline campaign. The predictable shift in a downturn is to focus on expanding sales with existing customers and email is the perfect vehicle for this group. Reduced marketing dollars can be focused on likely prospects rather than wasted on the disinterested. When compared to traditional tactics, online marketing offers superior measurability and trackability.

Next: The Growth of Mobile / Making Mobile Marketing Work For Your Business

Mobile Marketing: A Green Opportunity

Mobile devices represent an important new marketing channel. Increasing mobile penetration worldwide has led many in the marketing industry to believe that 2008 is the year of the mobile. According to a Cisco study mobile devices are quickly joining physical stores, websites and catalogs as an important fourth channel for retail growth.

According to Don Knox, global vice president at ad:tech Expositions, “Mobile continues to pique the interest of marketers and advertisers as it matures and the devices mature in the U.S...marketers are seeing the benefits of relying on mobile to reach consumers...Everyone seems to sense that we’re on the verge of a big breakthrough in mobile, as consumers are stepping away from their PCs and relying on these mobile devices more and more, and in that sense, it’s a logical extension of today’s marketing plans...Marketing is no longer just traditional or interactive, but rather marketing is encompassing both worlds...And as we’re seeing more of the marketing spend become digital, we’re attracting more traditional marketers and traditional media...We’re seeing mobile rapidly advancing around the world...A lot of what can be done will be determined by the carriers, but many marketers see mobile as an opportunity to extend their messaging, branding and more and more advertising opportunities."

The vast number of mobile devices in the world today makes this an extraordinary marketing opportunity. Currently, there are three times as many mobile-phone subscribers (3.3 billion) as Internet users (1.3 billion) worldwide. India is a prime example of this large and growing audience. With 267 million mobile phones, India is growing at the rate of 8.3 million phones per month, Chaitanya Nallan, CEO, Gingersoft Media adds, "As a medium, compared to the Internet, mobile is much more powerful. I can reach you wherever you are because mobile is with you all the time." And a mobile marketing dollar appears to get better results when compared to the Internet. According to Rajiv Hiranandani, CEO of Mobile2Win, "Clicks in this medium are around 5-8% and outperform the clicks in the Internet medium."

Social networking has significantly impacted the use of mobile devices. Sites like Facebook, MySpace and LinkedIn have changed consumer expectations and buying behavior. Social networking is increasingly mainstream and no longer the exlusive domain of the young. Facebook reported 286 percent growth in members aged 35 and over from May 2006 to November 2007. Social networking has grown on a global level, with the number of European log-ons (127 million) surpassing that of the United States (124 million).

The ongoing proliferation of e-commerce will also help drive usage of mobile devices. Forrester Research estimates that online sales will reach $204 billion this year and $335 billion by 2012. With e-commerce accounting for only 6 percent of all retail sales in the United States, there is considerable room for growth.

According to the Cisco IBSG survey, at present, mobile marketing is done primarily using SMS (Short Message Service). SMS is being used to communicate promotions, provide a two-way service for customers' questions, and offer item availability and delivery updates. Peer-based reviews and interaction are becoming a baseline expectation. Some mobile marketing includes advanced visualization, video capabilities, and mobile commerce technologies. Companies are also using mobile devices to generate leads, provide loyalty rewards and offer free downloadable content.

The Cisco IBSG survey found that:
42 percent of retailers provide the ability to view product information on a mobile device through reformatted web pages or specific mobile pages
15 percent offer the ability to conduct transactions (make purchases, complete inventory queries, etc.)
10 percent are using SMS to provide information or answers to customers' questions
6 percent have webpages and a URL specifically designed for mobile use
The Cisco IBSG survey of e-commerce sites found:
17 percent provide the capability to connect to communities of interest
52 percent provide customer reviews for products
50 percent have advanced visualization tools
50 percent provide multimedia such as video
50 percent offer customer support through multiple channels, such as click-to-chat

There are several factors that contribute to successful mobile marketing. Steen Anderson, VP of marketing for 5th Finger suggests a simple formula for his clients. R=V+E (Response = Value + Exposure). “By maximizing the value and relevance of the offer to the target audience and maximizing the exposure of the call to action across as much media as possible, the response rate will be maximized.” According to Anderson, “More than any other medium, in the mobile realm, marketers must strike a good balance between a creative idea and the technical execution of that idea in order to ensure ROI.”

Perhaps most importantly, successful mobile marketing involves a targeting strategy that is focused on the mobile devices used by the demographic you are seeking to reach. The call to action must be easy, clear and discernable at a glance. And as Anderson cautions “In the cases when you are offering prizes as part of the call to action, a large volume of lower value prizes can be much more effective in encouraging participation in promotions than having just one high value prize on offer.”

As reported in AdAge a recent New York Media Information Exchange Group breakfast panel was discussing mobile marketing strategy. They questioned whether the mobile category will continue to exist on its own or "simply merged into overall consumer environment of digital connectivity." According to Dick Cantwell, vice president of IBSG's Retail / CPG Practice mobile devices are part of the “new era of multichannel retail” The main threat according to Nallan is from spammers, "Spam messages have a low price band and take away our business."

Although unlikely to replace traditional mass media, mobile marketing offers a unique marketing proposition and a strong value proposition. Mobile marketing has a wide audience base and has the capability to effectively target specific demographics. Mobile marketing is less expensive than traditional marketing mediums and it is also more cost effective because the message reaches the audience directly. There is also added flexibility when marketing through mobile devices. As explained by Brand Analyst Harish Bijoor, “the advertiser can decide how much to market, to whom to market and with what intensity to market. The control lever is with the marketer. More he uses, more he pays."

Mobile marketing is easy to track. Shishir Sharma, Director of Business and operations at Active Media Technology says, "Since all downloads and SMS replies are trackable, evaluating effectiveness is much better in mobile marketing compared to other conventional marketing methods."Hiranandani calls mobile marketing “the most effective marketing channel for the years to come." And Sharma adds, "With the mobile phone being in virtually every hand, mobile marketing is the future of advertising.

Mobile marketing is still a relatively new concept and accounts for a relatively small portion of most companies marketing mix. (Only 15% of leading retailers provide mobile commerce). Marketers and business owners should understand that when is comes to mobile marketing, every sector is in the trial stage. Those that appear to be putting mobile marketing to the greatest use are the financial, auto, travel and retail sectors. By monitoring innovative companies SMEs can adapt successful mobile marketing practices to their own circumstances and strategies.

Mobiles value as a marketing medium comes from the widespread penetration of mobile devices and the fact that mobile device users are a captive audience even when they are roaming. As a relatively inexpensive marketing option, mobile marketing is an effective and accessible way for SMEs to communicate a targeted message.

Mobile marketing communicates with many thousands of users instantly. Companies and organizations leveraging the extraordinary reach of mobile marketing are also connecting with potential customers without paper, ink, transporation or the energy expenditure associated with traditional advertising mediums. Because of its smaller footprint, targeted message, wider reach, and cost effectiveness, mobile marketing is an ideal marketing medium for emerging Green themed businesses.

Success often follows those who anticipate the trends. And an effective mobile marketing strategy considers the desired capabilities long before they are worked into future platforms. In mobile marketing, as with sustainable business practices, those who are proactive in developing and implementing strategies will be in a more competitive position than those who do not.