Which mobile technologies will deliver for advertisers?
How can something as ubiquitous as the mobile phone cause so many headaches for brands and their agencies? Part of the reason is the constant re-incarnation of the handsets in consumers’ pockets.
The past decade has seen a range of new mobile-phone based technologies emerge to dazzle and baffle consumers and marketers alike.
Just as many were becoming comfortable with SMS as a technology, suppliers and digital agencies began extolling the virtues of multimedia messages (MMS), online video, mobile games,and a strange new media called the mobile internet.
Working out which of these is right for your marketing communications objectives is tough. But one thing seems certain, mobile marketing is likely to be big. According to eMarketer, mobile advertising spending reached $US1.5 billion ($A1.55bn) in 2006, and is tipped to hit $US14 billion globally by 2011.
But while each new technology has its virtues, the great unknown is whether any of these actually deliver a better outcome for advertisers than existing channels. And which technologies will stand the test of time as a means for brands to communicate with consumers?
It’s universally accepted that mobile – through whichever technology – is a highly-personal media, suitable for highly-targeted marketing campaigns. But despite this, or perhaps because of it, many brands have been nervous about engaging through the mobile channel.
Indeed, NetX lead creative Nic Hodges says in many instances the good mobile ideas fail to fly with clients.
“The client’s fear of getting into the mobile space is well-founded,” Hodges says. “Mobiles are a very personal thing, and if you present your brand in the wrong way or to the wrong people, it’s going to have a much bigger impact than if you are just doing it on the big screen.”
But for the managing director of Emitch Sydney, Lachlan Brahe, there is one very big question that remains unanswered – where does the money come from?
“It’s all very interesting, and there are a lot of opportunities, both as an acquisition tool and a retention tool,” Brahe says. “But this is a new media channel, so from what existing area should I be funding this?”
SMS
Short messsage service (SMS)is the workhorse for mobile marketing in Australia, with the 2007 AIMIA Mobile Lifestyle index showing that nearly 90% of the population are familiar with the technology.
Hence it’s been well exploited, within the obvious limitations. Together with its subsidiary company Fifth Finger, Ninemsn says that it has worked on campaigns involving more than five million Australians across dozens of major brands. SMS has also been the first technology to reach maturity, with the rapid growth rates of 30 to 50% experienced by SMS service providers earlier this decade fading to less than 20%. That figure is still impressive mind you, and shows there is plenty of headway left in terms of new brands engaging with consumers through SMS.
But it is possible, however, that consumers’ love affair with SMS is fading, with the technology in danger of being overshadowed by more visually appealing technologies such as MMS?
Where SMS has an advantage, however, is that it’s cheap, and can be sent and received by every handset out there. Moreover, despite its age, companies are still finding new ways to profit from SMS. Earlier this year in fact, the Ten Network signed a deal with mobile marketing firm Belong to resell SMS Short Codes (special telephone numbers which can command premium pricing) to its advertisers, adding a call-to-action functionality to their television commercials.
Damian Smith, general manager of digital media at Ten, says the response from advertisers has been strong.
“The selling point there is to say to clients, if you’re spending money on TV, this is a simple way of adding a direct response component to a branding campaign,” he says.
Short message service isn’t pretty, but it is cheap and consumers are familiar with it both as an inbound and outbound communication channel.
Ubiquity means it won’t disappear, but it is more likely to be superseded, just as text-based emails were superseded by ones including HTML formatting and graphics.
MMS & Bluetooth
MMS brings colour and life to mobile messaging, and with the ability to carry images and video. But this means bigger messages, and someone has to pay for the extra bandwidth usage. Hence MMS messages carry a price premium of upwards of five times that of SMS.
Further, the multimedia requirements of MMS mean not every handset is capable of displaying them, although this issue is fading over time.
According to Chris Noone, group mobile director at Ninemsn, MMS messages tend to be more absorbing for consumers, as they are somewhat akin to a slide show. But Emitch’s Brahe is sceptical of their long-term effectiveness.
“It’s all well and good to get a response rate to an MMS that is four times higher than that of its email counterpart, but if it costs four times as much, you’ve not really made any ground, have you?”
Fairfax general manager for media, Pippa Leary, says she is yet to be convinced of the value of MMS.
“MMS is just one of those things that everyone talks about and when someone shows us an application that is killer then we will be there.”
Bluetooth (a wireless technology that enables phones to connect freely to devices such as ear-pieces) is becoming popular as another means of getting content onto phones. The sales and marketing director of AURA Interactive, Adam Dunne, reports 40% growth last year in advertiser use of the company’s network of ‘BlueZone’ hotspots, which have expanded to 250 locations across shopping centres, cinemas and street furniture.
“More and more the brands are seeing the value of getting content and information into people’s hands through their mobiles, and appreciating that it is a lot more difficult than first thought through the carriers,” Dunne says.
Julian Lai, product marketing manager at 20th Century Fox Films, says his company is pleased with the success of Bluetooth campaigns.
“The feedback we have says that films that lend themselves to the younger audience have the best interest – the kids are really getting into downloading stuff through Bluetooth,” Lai says.
There are still barriers to overcome, however. Not all consumers know how to activate the Bluetooth settings on their phones, and some are concerned by the prospect of receiving content from un-trusted sources.
It remains a fringe activity, and high cost and lower handset penetration work against it.
Newer generation handsets will raise penetration, and carriers are likely to lower prices.
Many don’t know how to activate it or are sceptical of receiving content this way.
People are becoming familiar with advanced phones, and the growth of Bluetooth hotspots.
Mobile internet
Remember the disastrous flirtation with WAP (Wireless Application Protocol)? With faster data-transfer speeds, better handsets and better educated consumers, the mobile internet is making a comeback. That has created great opportunities for companies such as M.Net, which has developed technology for easily creating mobile web pages. Fairfax’s Leary says advertisers are seeking both call-to-action and branding opportunities.
She cites Toyota in particular getting a strong response to a call-to-action campaign on the Drive mobile site with consumers booking a test-drive. Leary says that growth has been strong, with numbers in the tens of thousands.
“We went through a really experimental stage where we didn’t know what kind of traffic we were going to get on these sites, but in the six months to March we experienced a 235% increase in unique viewers and a nearly 400% increase in page impressions,” Leary says.
Many of the advertisers that are embracing the mobile internet, such as banks and car makers, are the same as those who first embraced the internet. But the true effectiveness of the mobile internet as a marketing tool is uncertain. Noone says Ninemsn is now offering advertising on nearly all properties in its Mobilise portal.
The company has overseen the creation of sites for brands such as HSBC and Citibank, and has even run one campaign for Sony Ericsson which was a pure branding campaign with no call-to-action.
Promoters too are quoting higher click-through rates than for regular online banner campaigns, but Noone says it’s too early to say that greater click-through equates to greater effectiveness. The cost per acquisition for mobile campaigns is also higher, although Noone says it is clearly the more cost-effective option over online campaigns. He says traffic is also growing at more than 10% month-on-month.
There are simply too few people out there surfing the mobile internet today to call it a mass-marketing medium.
If the mobile internet shows the same growth curve as the regular internet, expect it to be a strong channel within the next five years.
Mobile search
If the explosive growth of search marketing in the online world is anything to go by, then search – and hence search marketing – will be the killer advertising medium for mobile as well. But it’s still a niche activity at present.
Major search brands such as Google, Sensis and Yahoo! all have mobile search offerings, but significant barriers stand between them and widescale adoption – not the least of which is consumer behaviour, with the majority of phone users unaware that they can use their device for that purpose.
Google has been tailoring its search engine and other products to the mobile device, particularly to deliver geographically appropriate content that is contextually relevant. A good example is when someone searches for pizza on their mobile phone, they likely don’t want detailed reviews of pizzas. They want to find a pizza place nearby that’s open.
Sensis has been making a strong effort behind its mobile search properties, and last year trialled a service that added geographical context to results. According to Gregan McMahon, Sensis manager of mobile product development, success with those trials will lead to a mainstream offering to advertisers being launched in June or July.
“What we found was that the geographically targeted call-to-action was very strong, and we were getting click-through rates of 4 to 7% across a variety of campaigns,” McMahon says.
“And we were also getting very strong conversation rates in terms of people downloading and converting those coupons into purchases.”
Again, the low level of consumer awareness means that advertisers will only hit a part of their small audience.
If Google can repeat it success in the online world on mobile, search shows strong potential.
Mobile television
Despite a proliferation of content, consumption of mobile television remains low, primarily due to consumer ignorance about availability and cost. More worrying for pundits – and what is yet to be truly tested – is the possibility that consumers simply aren’t interested.
But it’s still early days. Most mobile television today is offered on a subscription basis. According to Ten’s Smith, it will be difficult for the mobile content industry in Australia to grow based on a subscription model.
Over the past three years Network Ten has been making content available on selected networks, such as subscribers on 3 getting access to a Big Brother stream.
“The thing that will bring it to scale is removing that paid element and adding ads around it to help drive revenue,” Smith says. “And that is definitely what we want to be doing well before the end of this year.”
Vodafone is currently carrying mobile television content from Ninemsn with advertisements for brands such as Coca-Cola and Pepsi slotted in. Noone says the response from consumers has been good, with a preference for 15-second commercials run as single units only.
Right now the objective is branding only, but Noone believes that will evolve as the technology does.
“In the future you should be able to click into an ad then start interacting with the campaign but that’s still some way off,” he says.
Also some way off is the emergence of mobile games as a strong advertising medium. Few games developers are actively working in this space, although according to the mobile content consultant Jennifer Wilson, the idea of branded content is one that companies are discussing.
“There have been mobile games that have been built for advertisers particularly as part of an advertising function,”Wilson says.
“But I think what we will see in terms of games is classic in-game advertising, which will be brand product placement within games.”
However, games developers face the problem of having to create numerous versions of the same game to work with the vast variety of phones available in the market, and mobile games today remains a niche market oriented towards younger audiences. This is unlikely to change any time soon.
Publishers are happier today with a subscription model, and consumers have little experience with receiving video ads on their phone.
The introduction of ads to mobile television seems inevitable, but there are strong concerns that consumers will reject it, even if it reduces the cost of receiving content. Games have been a killer application in terms of digital content on mobile phones, but few advertisers have taken on the challenge of branded content in this medium.
