The Changing Dynamics of Mobile Marketing

The mobile phone and its ubiquitous nature are the catalysts for many business opportunities today. One such business trend is mobile marketing. Technology advancements have sprung up new marketing communication channels like email, SMS and MMS; of which mobile marketing has really caught up. The mobile marketing channel was less in India-only 3-5% of the marketing budget was allocated to digital and less that 1% to mobile. But with the mobile phone gaining high reach in India, and due to CRM-like segmentation features and two-way engagement, the m-marketing game has picked up. Though m-marketing invades people's privacy and generates negative consumer reaction, it's still witnessing growth.

Says Sharat Satyanarayana, co-founder and director, marketing and services, Lakshmi Access Communications Systems (LACS), “The mobile market segment has definitely started opening up, however, 2 factors are preventing proper growth. First, lack of bandwidth (the operational launch of 3G might actually be the catalyst for this industry to boom) and secondly, non-standard phones invading the Indian market (with the overload of Chinese import mobile phones, it might not be easy for advertisers, aggregators or campaign service providers to ensure guaranteed quality and last mile delivery of mobile marketing content). At the moment mobile marketing seems restricted to SMS only, which is not very effective, as there isn't a proper feedback mechanism in terms of reach and acceptability. People are wary of SMS marketing, and it already seems to be considered as spam.”

According to Suresh Narasimha, founder and CEO, TeliBrahma, “The mobile marketing segment is evolving from 2 dimensions-Taking a share from the digital budget by enhancing the value from digital marketing efforts of brands, and taking a share from traditional budget. We see this as a huge growth area and an opportunity where mobile can become larger than digital. Technologies like Augmented Reality are making it happen.”

Mobile-optimized Location-based applications by incorporating location sharing to customer feeds and geo-location features have greater impact. Some mobile advertising companies send customers offers on their phones when they are near the store of a particular brand. At the higher end, the privileges, royalties and innovative services of location-based mobile phone services attract a lot of Indian members. Suresh Narasimha says, “I think mobile marketing has impacted consumers and brands alike. For consumers, unfortunately, there is more annoyance than the real value. But I think this is going to change as brands get serious about how to use mobile. For the brands there has been real results. Brands now feel their traditional media can be measured and engaged. Brands now feel brand communication to loyal consumer base can be made more effective. I think impact of mobile marketing would be felt lot more in 2011 by all parties concerned including traditional media, agencies and online agencies. I see most of them getting smarter and embracing the mobile phone to complement their offerings.”

Challenges

Consumers expect messages to be personal and of high interest and this makes the disappointment greater when they get undesired messages. Mobile advertising may even step over the line of discretion and invade consumers' privacy because of the personal nature of the mobile device. One of the main challenges for mobile advertising companies is to understand and respect the personal nature of the usage of mobile phones. Challenges are delivering the right metrics and demonstrate opportunity beyond the online world. For companies, a challenge would be to learn how to offer sustainable innovation at right cost points. And to scale up and achieve higher market share in not only mobile advertising but in the overall advertising pie.

“It is still evolving. Relevance plays a major role in mobile marketing. If an SMS is relevant, only then it is considered. Revenue through mobile marketing is yet to be ascertained. DND has posed a major challenge; consent mechanism and profiling will help,” says Vikram Shanbhag, vice president, mobile messaging solutions, Comviva.

According to Sharat Satyanarayana, “Until the wireless bandwidth actually opens up, this market will continue to flounder; although opportunities exist amongst community-oriented groups (eg, Art of Living or companies connecting with product end-users with regards to updates/information). The lack of a standardized platform on which to tag a variety of marketing campaign formats is preventing this domain from achieving its full potential.”

Getting Personal

Phones and personal digital assistants increase the availability, frequency and speed of communication. Mobile media transcends traditional communication and supports one-to-one, many-to-many and mass communication. Suresh Narasimha says, “Opportunities are in helping build great brand communications and use mobiles for not just delivering the response but to create a deeper impact with the target audience.”

Companies should hold on to interactive wireless media to provide customers with time and location-sensitive, personalized information that promotes goods, services and ideas. The mobile advertising relevance can be influenced by the ability to use contextual information to target the messages to individual receivers, in other words to personalize the message. Location-aware advertising messages are creating 5-10 times higher click-through rates compared to traditional internet advertising messages. Customization of mobile marketing messages according to the demographic characteristics and individual tastes and preferences would enhance the overall acceptance of mobile marketing messages, and have a positive impact on the purchase decisions being made by these consumers.Hence the mobile users are apparently seeking customization of mobile marketing messages as per their individual requirements, tastes and preferences.

“Consumers love communication that helps them. Whenever we have campaigns that go with the consumers' interests, they are bound to respond. Whenever we delivered video highlights of a cricket match and branded the service, consumers responded. Mobile marketing has the huge opportunity to be a utility for consumers and I am sure companies which would be successful understand that.” points out Suresh Narasimha.

A mobile user, Nidhi Krishnan says, “Mobile marketing is very useful. Take the case of Dominos-An SMS from the company explained about a pizza offer, clearly, and there was a coupon number and a phone number. When I rang up the number and mentioned the coupon number I got the offer. But at times it can be a nuisance, particularly when we are travelling...

A recent study conducted by InMobi and Synovate says that mobile users are inclined towards receiving mobile advertising and marketing messages. “The global mobile advertising market is expected to grow to $13-14 bn in 2011 and Asia Pacific is expected to bring in the majority of this revenue followed by North America and Europe,” says Rohit Dadwal, managing director, MMA Asia Pacific.

Top 10 mobile marketing trends for 2011, from theMobile Marketing Association:

• There will be an effective and credible mobile media with the adoption of transparent, permission-based marketing along with the introduction of regulations and applications for blocking unwanted content. This will help overcome the perception that mobile advertising is nothing but spam.
• Over the top services will drive data usage. On-deck operator ad revenues will be overshadowed by over the top application-based value-added services revenues. These services will help create mobile inventory and enable greater mobile ad spend.
• Basic mobile features will be available free of cost like free SMS, video and phone calls with the help of applications like WhatApp and Viber.
• Resurgence of Windows 7 mobile aims at providing a universal user experience much like Research In Motion (RIM) and Apple and this will aid the growth of mobile Internet and advertising.
• HTML5 will reign the apps war by offering great opportunities, apps and app stores for mobile content.
• Location-Based Services (LBS) and Augmented Reality (AR) will be the leading integrated mobile technology in the market.
• Growth of electronic wallets-the electronic payment industry is growing rapidly and provides significant opportunities for all electronic payment channels including those on mobile platforms. In developing countries, mobile banking services can address a service gap that is critical to their development.
• The re-emergence of mobile blogging with the adoption of tablet devices-consumers now have greater speed, connectivity and battery life in their mobile devices.
• Continued proliferation of smartphones and mobile Internet advertising-it is expected that by 2011 over 85% of handsets shipped globally will have browser capabilities.
• Mobiles will jump onto the 3D bandwagon-3D technology is being incorporated in any and every gadget available in the market today.

When these trends evlove, the mobile marketing segment will undergo a major makeover. VAS providers will benefit from it and the revenue will start flowing in.

Malini N
malinin@cybermedia.co.in