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The power of mobile marketing

Guest post by: Campbell Corser

Article Overview: Australian businesses can be frustratingly slow when it comes to adopting new technology, and mobile marketing is one area where few companies have dared to tread.

The power of mobile marketing

Australian businesses can be frustratingly slow when it comes to adopting new technology, and mobile marketing is one area where few companies have dared to tread. But with the growth of smartphone use, the adoption of location-based services like Foursquare, the growth of platforms like Android, new advertising markets like the iAd and AdMob channels and the explosion of location-based search, businesses have no excuse to ignore this rapidly growing market.

Mobileactive business development manager Vanessa Hunt says the Australian market has over 100% penetration, but businesses simply aren't paying attention.

"The best way to approach this is to know that every single person has a mobile, and some people have two. It's an extremely personal medium; it's a fact of life and now just commonplace. Mobile marketing is a part of our lifestyles, and marketing ties into that."

Mobile marketing is especially important considering users are much more receptive to mobile ads than they were even a few years ago.

According to a study conducted in 2009 by the Australian Interactive Media Industry Association, 39% of mobile users state they would accept ads on mobile in exchange for content or special offers, while 22% said they would accept ads without an incentive.

Further, 56% said they would take ads from companies they have made a deal with, while 37% would accept ads from companies with whom they already have an existing relationship.

That means there are potentially millions of customers ready and willing to receive mobile ads and engage with your business – all you have to do is take advantage of the opportunity.

What does mobile marketing look like? Ovum analyst Craig Skinner says mobile marketing refers to any marketing practice that "targets the customer in a mobile environment, whether that be through smartphones, tablets or even netbooks to an extent".

There are a number of forms of mobile marketing, ranging from text message campaigns to display advertisements designed specifically for devices like smartphones. Here are five of the most popular methods:

• Visual advertisements

Call them banner ads, display ads or interactive ads – they fulfil the same purpose. Visual mobile ads show the user graphics or a picture advertising a business or service, in the same way they do on a normal desktop page. The only difference is they've been tailored to a mobile device.

This is where mobile marketing is really becoming a prominent force. Google broke into this space in a big way last year when it bought AdMob for $US750 million, and Apple has followed with the introduction of the iAd platform.

They aren't shy about their ambitions, either. At the recent World Wide Developer's Conference, chief executive Steve Jobs says Apple hopes to control 50% of the mobile display advertising sector by the end of the year.

However, this segment of the market still remains relatively small. According to research group EMarketer, only $US593 million will be spent on mobile advertising in the United States this year. But that number is set to explode, with the firm expecting spending of $US1.56 billion by 2013.

• SMS

SMS marketing has been around for over a decade, but many businesses simply don't think of using it. Hunt says these SMS campaigns can deliver you a lot of benefit for such a small, cheap effort.

"SMS promotion stuff comprises a lot of what we have been asked to do, along with mobile publishing like apps and websites. Anything like coupons or transaction discounts are being sent through SMS market and it's becoming really popular."

SMS is a powerful medium. A recent study from Harris Interactive shows 40% of 18-34 year olds are "somewhat interested" in mobile marketing SMS messages, but once they receive mobile information, 28% will purchase an advertised product in store.

• Mobile sites

Mobile marketing isn't just text messages and fancy, interactive displays. Mobile websites are one of the most crucial business developments to emerge over the past few years, and if you don't have one you may be trailing behind the rest of the pack.

Mobile is about immediacy. If users have to wait even a few more seconds for your clunky site to load up, they'll move on.

A recent report from Forrester Research shows 19% of online retailers are currently developing mobile sites – the other 81% risk being left behind.

• Apps

The applications industry, a market that barely existed two years ago, has transformed into one of the most important forces in marketing. Now companies create apps purely to show off their brand, and Skinner says this isn't just for the big boys anymore.

"Certainly in Australia, the iPhone apps industry has grown enormously. Applications really allow you to have a deeper engagement with a brand, and the more sophisticated apps are now allowing smaller businesses to get in on the action."

• Location-based search and SEO

SEO isn't the most obvious thing to include in a mobile marketing story, but it's probably the most important. Not only does the growth of smartphone use imply immediacy, it's also increasingly making location-based marketing extremely important.

Listing yourself on Google Maps, Foursquare or the soon-to-be-released Facebook Places feature, tagging your site with suburb names and other location data, are just some of the ways you can make sure shoppers in your area know you're around.

According to the AIMIA study, 43% of respondents said they had used their phones to carry out a mobile search in the 12 months to September 2009, compared to 47% who stated at the time they intended to do so over the next year.

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Examples of mobile marketing

Examples of mobile marketing range from simple, message-based marketing tactics to full-blown campaigns that cost tens of thousands of dollars.

Mobile sites are probably the most common form of mobile marketing, and some Australian businesses have been particularly quick to jump on board here. Specifically, these experts say the big four banks offer well-tailored mobile sites.

As an example, National Australia Bank offers a fairly comprehensive website, but its mobile site is fairly simple and easy to use.

These experts say a successful mobile site strikes a healthy balance between the practical and the aesthetically pleasing, being easy to load and simple to navigate. Entertainment group Hoyts uses a particularly effective strategy to send discounts to customers. When a customer enters a cinema foyer, they turn on their phone's Bluetooth and have the chance to receive discounts on confectionary or even tickets.

While Hunt says Bluetooth technology is now a little out-dated, it's still a good use of effectively using mobiles to give discounts and create value for customers.

"Mobiles are very personal devices, they very rarely get turned off and by doing that sort of marketing it allows customers to continue using their phones as they would have done anyway."

Sponsored links for mobile ads are also a popular form of mobile-based marketing. Many of them appear the same as they do on a normal desktop search, but are often related to locations, given that users are searching on their mobiles when they are out and about, rather than in one place.

Undoubtedly, the biggest form of mobile marketing is the smartphone app. Hundreds of Australian businesses now use smartphone apps to promote their business, and even giant companies like Qantas are incorporating mobile technology into their booking procedures, allowing users to receive a boarding pass on their mobile.

Dozens of other companies like Catch of the Day, Lasoo and Myzerr are using iPhone apps to promote themselves. It's a lot of work (and money), but it can pay off if you create the right program for the right audience – Domino's managed to gain over $2 million in sales through its app.

But even though large brands are using this technology to promote themselves, some of the most innovative examples of mobile marketing are coming from smaller, independent SMEs.

In the United Sates, Mexican restaurant owner Peter Shipman started a mobile marketing campaign using paper advertisements at a nearby university. Students just took a picture of a 2D barcode on the post, sent it to a specified number and then received a coupon – and there's no reason why an Australian business can't do the same.

Shayne Tilley from SitePoint says there are countless ways small businesses in Australia can use mobile marketing to their advantage.

"There are many simple ways businesses can use this. Look at a hairdresser, which could send an SMS to someone who's booked an appointment, or sending them a discount, or so on. If you look at it just as another form of marketing, it's very easy to engage."

"You need to make it all part of the customer experience, so offer something of value rather than just another ad or something. It really is just a basic offer that you should be doing."

How should SMEs approach mobile marketing?

The big question – how do I do it?

One of the first things SMEs need to consider is their focus – what is it exactly you want to achieve? Can you reach your target audience through an SMS campaign, or a comprehensive app? Will you need a simple mobile site, or do you need to start listing on all the location-specific services you can think of?

Palmer says SMEs, especially those smaller SMEs dabbling in mobile marketing for the first time, should start off with some basic search ads.

"People are just spending so much time creating searches, it's good to try some search ads. People aren't using mobile internet the way they use desktop internet, they are trying to gain quick access to information, so these results are extremely relevant."

The best entry point for mobile ads is a search ad, usually displayed on a site like Google or Bing. Google ads appear the same as they do on a desktop search.

Palmer also believes the rise of mobile search underlines the importance of building a mobile-based site.

Another step up would be the use of SMS marketing. Hunt points out the majority of Mobileactive's work as requested by clients consists of these campaigns.

"Definitely SMS promotion stuff is a lot of what we get asked for, so anything like coupons and transaction-based marketing is what we do."

Examples of SMS marketing campaigns include sending out coupons to users on a database, along with information including product pictures and information about sales. Some businesses even request users show a cashier the SMS in order to retain a discount.

These campaigns are usually fairly easy to set up, but can be expensive if you have extensive databases. However, there are some concerns, with Palmer pointing out that "SMS marketing isn't necessarily a rich interactive experience".

Instead, he believes applications are the product of the future.

"The iPhone applications market has grown enormously, and there are apps that are allowing you to have a deeper engagement with your customers. You can throw your brand on it, and we've really moved past the "gimmicky" style app. Instead, the metric is now engagement – how are users engaged with your app?"

Some of the more successful iPhone apps – Domino's, Catch of the Day and Lasoo – are offering something of value, like a coupon search service or at least the ability to order a product.

Of course, these initiatives cost a fair amount of cash. But there are cheap, simple alternatives. Skinner says if you don't have the money to launch a comprehensive SMS coupon campaign, or don't have the money to create a mobile site, there are still some simple SEO techniques you can use.

"Even if it's just a matter of making sure your business is registered for using Google Maps, or are listed on as many maps as you can, then that will get you going."

"If they're in the middle of Melbourne searching for a café, it doesn't require much effort but you're still reaching the customer extremely easily and effectively because of this type of technology."

List your business on Google Maps, Foursquare and the upcoming Facebook Places service when it launches later this year, to make sure your business is at least out in the open.

But it doesn't stop there. As these services become more popular, Tilley says it's worth rewarding customers that are finding you through their mobiles.

"Looking at things like Foursquare, that form of location-based marketing is just brimming with opportunities. I've heard stories of cafes ordering free coffee to the "mayor" of their shop on Foursquare, and then it creates competition and really creates some good activity – all on mobiles."

What to avoid Mobile marketing is a relatively new territory, and SMEs will naturally be careful before committing too much money to such a new endeavour.

And rightly so - these experts say businesses need to be cautious and keep some crucial points in mind before embarking on a full-blown mobile marketing campaign.

Skinner says a major problem is that companies will often try a quick marketing tactic and then not tie it in with the company's overall strategy.

"You need to maximise the effectiveness of your overall marketing spend. It's all good to try something out on an ad hoc basis, but you need to tie your spending into an overall marketing strategy."

"The key to that is knowing your customers, looking at what they are doing and then matching your marketing behaviour to the customer behaviour."

According to the Australian Communications and Media Authority, mobile spam is becoming a huge problem, with plenty of fines being given out to SMS spammers.

"Just make sure that you don't fall into spamming, and falling into going against the law there," Skinner says.

Palmer says businesses need to keep in mind when using SMS marketing the messages need to include the name of the sender, contact information and the option to subscribe.

"Many businesses are certainly aware of SMS spam. Be very conscious of not annoying the customer, because mobile is such a personal device and broadcasting spam is not going to be seen favourably."

But even with these caveats, Skinner says there is still a good opportunity for businesses to get ahead of the game as mobile marketing is still in its infancy.

"Australia is still lagging behind the US and some of the Asian markets in this regard, even though Australian users have been relatively fast adopters themselves. Australian businesses need to push themselves to catch up – all they need to do is try it out."

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Article Tags: australian businesses, mobile marketing, new technology



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