Is There a Mobile Ad in Your Future?

By: Claudia Bruemmer, Bruce Clay, Inc., March 2006

Last year, industry experts were saying that mobile marketing was all the rage - you would soon be seeing tiny little ads on your cell phone screen. While that hasn't happened yet, it could make some headway this year.

Why all the interest in placing ads in cell phones and other mobile devices? Let's count the ways.

1. Advertisers can access a young, professional, tech-savvy audience as mobile users view online content while commuting or even in their spare time.
2. This audience is very focused and knows what it wants.
3. Mobile marketing ads get higher click-through and conversion rates than traditional online banner ads.
4. Mobile marketing gives advertisers an added avenue to supplement their online and offline advertising campaigns.

Are There Any Drawbacks?

You bet - fear of consumer backlash. The fact that a cell phone is so personal makes consumers overprotective of their privacy. With time at a premium in most consumers' lives, they don't want to be invaded with ad noise in this vital communications channel. This may be the reason behind recent decisions by cell phone content producers like Fox Mobile Entertainment and CBS to focus on subscription based services rather than ads. As reported in Advertising Age, Fox Mobile will launch Mobizzo with premium content at $5.99 per month, and CBS will offer "CBS News to Go" and "ET to Go" for 99-cents and $3.99, respectively. Mobile ads are not yet on the horizon for the new subscription video products.

Video entertainment and content-on-demand through cell phones and TiVos are staples of the young, professional demographic that is highly prized by marketers. However, most cell phones are not video-equipped. Of the roughly 200 million U. S. cell phone users, approximately 4 million have video-enabled models. Thus, the audience is limited at present.

The wireless carriers themselves don't want to risk losing customers so they are treading lightly and keeping the advertising down to a minimum. Unlike the Internet where your email address can be sold, it is illegal for carriers to sell phone numbers to telemarketers. Additionally, contracts with content providers prohibit the sending of unsolicited messages.

Anticipating resistance and mindful of consumer aversion to spam, the Mobile Marketing Association developed a Code of Conduct for Mobile Marketing that gives the consumer choice, control and consideration. The MMA, in conjunction with the CTIA (Cellular Telecommunications & Internet Association), also developed the Consumer Best Practises Guidelines for Cross-Carrier Mobile Content Services, which protects consumers and the integrity of the content received.

News and Info on the Go

Despite some of the drawbacks, Google introduced a personalised home page for mobile phones earlier this year. Available on most cell phones, this feature allows you to conduct web searches, check Gmail and read news headlines. You can also get weather reports and stock quotes from your Google mobile home page.

The new feature is optimised for smaller screens and enhances the mobile experience by providing all this information on a single page -- handy for mobile device users because mobile network connections are much slower than high-speed computer connections. This new feature will likely increase web usage by mobile device users with cell phones, notebooks, smart phones and PDAs equipped with mobile data cards or using a wireless network.

A new Google News Service is now available for U.S. mobile users. The content displayed is designed specifically for mobile device viewing. Categories include Business, Science/Technology, Sports, Health and Entertainment. Google's mobile news page can be accessed through Google.com via a mobile web browser. Information on Google mobile services are available at mobile.google.com.

Advertiser Interest

In many large metropolitan areas, wireless penetration is over 70 percent, as cell phones, BlackBerries and PDAs become more and more ubiquitous everywhere you go. The advertising potential is huge, something marketers can't fail to ignore.

U.K. mobile software firm Airwide Solutions conducted a survey of 50 brand name companies, stating that "89% of major brands plan to market via mobile phones by 2008." It also reported that over half of these brands plan to spend up to 25 percent of their marketing budgets in mobile marketing over the next five years.

While mobile marketing has potential, industry complexity can be daunting for the uninitiated. Does anybody know what EMS, MMS, PSMS, SMS and WAP and mean? Many marketers don't know how to launch a mobile marketing branding campaign. Following are a few basics followed by a brief glossary of terms.

Mobile Marketing is Growing

The major mobile network players in the U.S. include Cingular, Verizon Wireless, Sprint Nextel and T-Mobile USA. While much remains unknown about this new marketing channel, mobile marketing has experienced considerable growth since last year. There are several reasons for this:

1. Current mobile devices get better performance than earlier models
2. Mobile networks have been upgraded
3. User-friendly multimedia gives consumers a better user experience
4. Technology innovations allow North American marketers to conduct campaigns across carriers

What Are the Benefits of Mobile Marketing?

The mobile channel allows marketers to track branding success by including a mobile call to action for each campaign (broadcast, print, TV, etc.). This way, marketers can track response rates for specific campaigns or marketing channels.

Mobile allows marketers to target prospects with anytime/anywhere marketing. Most mobile devices are always on and always connected, which means 24/7 availability. Marketers can access consumers whether they're at home or at work, when they're in their cars or on a train, etc. While these consumers are always wired, they can pick and choose when to be engaged. And when they're engaged, they are likely to buy. Coupled with a cross-media marketing communications campaign, the mobile marketing channel gives consumers choices, while giving marketers a new target audience.

Mobile marketing gives marketers an additional channel that permits a more direct relationship with consumers. It can be particularly effective for nonprofit organisations by providing a cost-effective means to target potential donors. That's because mobile marketing creates an environment where donors can instantly respond the moment empathy strikes.

Up Close and Personal

What are mobile marketing ads like? Think of a miniature TV ad that's 3 seconds rather than 30 seconds long, delivered by video, audio, static banner or text clips. Think of the prospect of sending ads to consumers based on their location. But wait, isn't that illegal?

Carriers cannot reveal information on a subscriber's location without express permission - that's the law. So carriers and advertisers plan to entice subscribers to opt in with incentives like reduced monthly phone rates.

Marketers are proceeding with caution, some by sending simple text ads that encourage clicking to a website, while other campaigns urge consumers to use their phones to send a text message to advertisers requesting information on special offers. Verizon and Sprint are testing the waters, sending short video ads to a select sample, then analysing consumer reaction.

One reason for the intense interest in cell phone ads is the fact that prospects click on mobile screen banner ads at relatively high rates. The click-through rate is about 4% on cell phones compared to 1% on the web. The reason for this is that ads can be aimed at particular consumers based on factors like time of day and type of handset used. Opt in plus personalisation and targeting can really pay off when it comes to cell phone users. Ready to get started? If so, familiarise yourself with the industry terms below and get any additional information you need from your advertising agency or the MMA site.

Key Industry Terms

• EMS -- Enhanced Message Service is an improved form of SMS (Short Message Service). EMS is an open standard, allowing picture messages to be cross-phone compatible.
• MMS -- Multimedia Messaging Service provides the ability to send messages that can be a combination of text, audio, image and video to other MMS capable devices.
• PSMS -- Premium SMS, meaning that the user is charged an incremental fee instead of the basic text charge. The transaction can involve participating in a programme, purchase of a ring tone or wallpaper.
• SMS -- Short Message Service is a feature available in most digital phones allowing users to receive and send short text messages (150 to 160 characters) to other cell phones for a monthly or per message fee.
• WAP -- Wireless Application Protocol is the current standard for transferring wireless web pages to cell phones for small screen display. To be WAP enabled, a cell phone must have a WAP browser capable of reading and displaying web pages coded in WML, a wireless equivalent to HTML, the web markup language.

Is Mobile Marketing Right for You?

The mobile phone advertising market totaled approximately $45 million in 2005; however, it is projected to jump to $1.26 billion by 2009. While the market is still in its infancy, it is expected to ramp up as the year progresses for reasons previously discussed. What's not to like, except a little consumer ire. Industry experts predict consumers will tolerate mobile ads if rewarded with free usage or lower fees.

Need More Branding Information? - Read Our Next Article on Creating Personas.