Pros and Cons of Mobile Marketing

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eMarketing emerged because of the Internet, and has marked a shift in the way that companies invest their marketing and advertising budgets.

Not only has the Internet become a major channel, but the connectivity and community aspects of the Internet have brought about a mind shift in the marketing of savvy organisation. Mobile Marketing is shaking things up once again.

As a direct response medium with lowered costs, easy customisation and sophisticated tracking, even on a mass scale, mobile is proving to be an extremely profitable medium for advertisers and marketers.

Key Terms and Concepts

2D Barcodes A scannable barcode which can be read by certain mobile applications (by taking a photo of the barcode) and convey information such as URLs etc. Also known as a QRC or Quick Response Code.
Bluetooth A short distance wireless transfer protocol for connecting devices.
Common Short Code (CSC) Users send messages to these shortened numbers (4 to 6 digits), usually to get something in return, like a competition entry for example.
Device Detection  The automated process of sorting traffic depending on the device used for access.
Direct Marketing Marketing methods, such as mobile, which directly reaches the individual in the target audience.
Geographical Targeting Also geo-targeting or geo-locating. Used to allow you to see where your visitors come from and give them specific information that is relevant to them based on their location.
Global Positioning System The Global Positioning System, or GPS, is a satellite-based positioning technology that allows a GPS receiver to calculate its position anywhere on earth with great accuracy.
GSM Stands for Global System for Mobile Communications. Most widely used of the three digital wireless telephone technologies. Uses a variation of time division multiple access.
Integration Consolidation of many media toward a unified platform or standard.
Microblogging Brief text updates that are usually less than 200 characters. These are published via SMS, the Web, IM, email or Mp3 and can either be received by the general online community or a select number of individuals. As of May 2009, the most popular microblogging service is Twitter.
Mobile Device A mobile phone, PDA or other handset.
Navigation Navigation is what allows users to move from page to page on a site. It is essential that navigation is user-friendly as if users can’t easily find their way, they won’t travel deeper into your site.
QWERTY A full keypad, similar to the one found on computers.
RSS Really Simple Syndication, or RSS, allows you to receive/ syndicate information without having to constantly open new pages in your browser. As a content creator, RSS allows your content to be distributed.
SMS Short Messaging Service. SMSes are text only messages that can be sent to mobile phones from the Internet or from other mobile devices. All phones are SMS capable. Can be compared to text only emails vs. HTML emails.
Targetting Determining one's niche marketing audience of individuals within a group.
Tracking Measuring the success of a campaign by collecting and evaluating statistics.
Transfere Rates The speed at which data is transferred across a network.
Twitter A microblogging platform allowing individuals to communicate directly with their followers.
USSD Unstructured Supplementary Service Data, or simply USSD, works on all existing GSM phones. Provides session-based communication, enabling a variety of applications.
WAP Wireless Application Protocol. A set of standards that allows Web access on mobile devices.

Seven Unique Benefits of Mobile

With direct response and relatively lower cost of communication, mobile is changing the face of the marketing and advertising horizon. Tomi Ahonen (Ahonen, 2008) has identified seven features unique to mobile phones, highlighting the unique benefits and challenges of the mobile phone.

  1. The mobile phone is personal.
  2. The mobile phone is always carried.
  3. The mobile phone is always on.
  4. The mobile phone has a built-in payment system.
  5. The mobile phone is available at the point of creative inspiration.
  6. The mobile phone can provide accurate audience measurement.
  7. The mobile phone captures the social context of media consumption.

1.     The mobile phone is personal.

A 2006 survey (“Wireless Works” by BBO and Proximity) found that 63% of respondents would not share their phone with anyone (and 90% of those surveyed in Japan would not share their phone). While laptops do present a personal connection to the Internet, they are not as personal a device as the mobile phone.

The implication for marketers: Respect for privacy and permission is exceptionally important in all aspects of marketing, and particularly so when it comes to mobile phones.

2.     The mobile phone is always carried.

What do you take with you when you leave your house? Wallet, keys and mobile phone. What do you keep always near you when you are in your house? Mobile phone. According to 2007 research by Morgan Stanley, 91% of mobile phone owners keep their phone within one metre, 24 hours a day. People have their phones with them at all times of the day, even in the bathroom.

The implication for marketers: Messages sent to recipients can be read and acted on immediately. Unlike, for example, email which requires that the recipient be in front of their computer and connected to the Internet, messages sent to mobile phones will most likely be accessed within minutes of being received.

3.     The mobile phone is always on.

In order to fulfil its primary function – as a telephone – the mobile phone is always on. Messages and services can be sent and acted on at all times of the day.

The implication for marketers: Similar to the previous feature of the phone, the fact that the phone is always on changes the services and messages that can be developed for the phone. It also means that marketers need to be even more sensitive with their marketing communications. Not many people would appreciate an SMS at 4am informing them of a special offer.

4.     The mobile phone has a built-in payment system.

This is perhaps the key feature of the mobile phone, and one reason why content for mobile phones in many areas generates as much or more revenue than content for the Internet. Every mobile phone has a built in payment mechanism – the SIM card. Billing is easily handled through the user’s mobile network. Not only do mobile phones have this built-in payment mechanism, paying for content and downloads has been built into the way that consumers use their phones. There is less of an expectation that goods and services will be free.

There are also a number of services that turn the mobile into a virtual wallet or bankcard, bringing banking and payment services to people all around the world.

iChannel, a mobile news ticker feed in Japan, generates US$ 192 million per year in subscriptions for its US$ 2 a month service. It has more paying subscribers on this single service that all online newspapers in the world combined (Moore, 2008). Similar cases can be made for games, music and other mobile content.

The implication for marketers: Consumers are willing to pay for services and content on their mobile. Advertising is not the only way to generate revenue for content.

5.     The mobile phone is available at the point of creative inspiration.

As the mobile phone is always carried and always on, it is always available as a creative tool. Phones today feature a number of tools that let users act on creative impulse, from taking photos and videos, to becoming a scribbling pad on which to jot down ideas. 

The implication for marketers: The feature can be used to encourage interactivity within campaigns created for mobile. It presents the mobile as a useful tool in viral campaigns based on consumer generated content.

6.     The mobile phone presents accurate audience measurement.

While the Internet is vastly superior to other media in its ability to track and measure advertising and marketing campaigns, it is eclipsed by the mobile phone. Every transaction made on a mobile phone can be uniquely tracked to that mobile phone number, whether the transaction be a voice call, an SMS message or accessing the Internet.

The implication for marketers: Aggregated data provides extensive profiling and segmenting opportunities for targeting the right audience. Campaigns can also be accurately measured and tracked for ROI. Bear in mind as well that this accurate measurement means that mobile phone users have far less anonymity than Internet users. Even though at least 50% of mobile phones worldwide are on a prepaid or pay-as-you-go type of contract (which means that the network operators do not have the phone user’s name and demographic details to go with the mobile number), each transaction made by the phone user can still be measured. Be aware, that the networks determine the data that they are willing to share with the marketing company. This limits the information available.

7.     The mobile phone captures the social context of media consumption.

This represents emerging thinking on the benefits of the mobile. Because of the nature of the mobile phone to accurately track transactions to any particular phone number (user), it can track transactions between mobile numbers (users). This means that sophisticated data mining can identify patterns that indicate information and preferences of mobile phone users. Not only can alpha users be identified, but they may be identified within their social context.

The implication for marketers: This information will represent rich data that can be used to both create and market products, content and services online.

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