Investment in mobile marketing is expected to explode in the next five years as communication with customers via mobile phones evolves beyond simple text messages to sound and pictures
Mobile telephony is growing ubiquitous, sophisticated and multi-functional. By the end of 2005, Jupiter Research estimates that 299 million people (76 per cent of the population) will subscribe to a mobile service in Europe – in the UK the figure is expected to reach 47 million (79 per cent of the population). While penetration levels are beginning to plateau as they reach saturation point, the handset sector continues to evolve. For instance, 36 per cent of Europeans have camera functionality on their phone in 2005, but this figure is set to nearly double to 70 per cent by 2010.
As more of us own a mobile, brands are looking to talk to us in more sophisticated ways. Codemasters, for instance, has set up a mobile gaming division (MW last week) as it seeks to get more people playing its games and raise brand awareness, while Orange is telling us about its SMS football alert service (MW August 25).
With mobile phones playing an ever more central role in consumers’ lives – not only for communication but increasingly for information and entertainment – marketers’ interest in the medium is fast awakening. Marketing investment in the mobile channel is expected to grow rapidly over the next five years. Jupiter predicts that spending on mobile marketing in Europe will increase six-fold, from â¬110m (&£75m) in 2005 to â¬688m (&£470m) by 2010, as more marketers begin to incorporate mobile into their plans.
Burgeoning investment will come from a range of sectors. Mobile content owners, such as mob.tv or redalertz.com, are likely to concentrate on communicating with their customer databases, promoting personalisation content such as logos, ringtones and wallpapers. There will also be more initiatives from companies offering “infotainment” content services such as news, sports or gaming. The personalisation and infotainment market is set to triple in size from â¬3.3bn (&£2.25bn) to â¬9bn (&£6bn) between 2005 and 2010.
Further interest will come from broadcast media owners and publishers, as they look to build interactivity into their programming in order to establish closer relationships with audiences and generate fresh revenue streams. The same is true of packaged goods, travel, fashion and financial services as they create cost-effective channels for relevant and personal customer communications.
These activities would require consumer permission and opt-in, so in theory, they would only be received by subscribers willing to participate. However, most consumers will receive marketing messages from their network operator or handset retailer, promoting handset and service upgrades, so they will become accustomed to receiving such messages.
As mobile data services expand, and the channel grows increasingly visual as well as verbal, marketing message formats will become richer and more varied. In 2005 text-only SMS messages are the dominant form of mobile marketing, with 72 per cent of mobile media budget spent on this format. But this will diminish as marketers turn to the audio-visual capabilities of MMS, video and WAP-based content, which have more impact.
Rich media will be used to convey stronger brand messages or to demonstrate products and services through pictures and sound. Early adopters of rich mobile media have been Coca-Cola in Germany, UIP films in the UK and cable operator Noos in France.
Alongside the growth in retention-driven mobile marketing, investment in acquisition-driven advertising on operator portals, such as O2 Active or Vodafone Live!, will increase as subscriber access to the mobile internet expands, traffic grows and potential ad impressions multiply. Jupiter predicts that spend in this area will grow from â¬5m (&£3.4m) in 2005 to â¬199m (&£135.7m) in 2010, as opportunities open up in content sponsorships, display advertising and sponsored search. The mobile is to become a visual multimedia infotainment device.
Operators have the most to gain from increased investment in mobile marketing, but also the most to lose. As legitimate marketers exploit mobile media, so too will unscrupulous traders targeting unsuspecting consumers with spams and scams. Although cost is likely to inhibit the widespread distribution of unsolicited messages, the personal and intimate nature of the channel will amplify consumer reaction to spam.
Network operators will have to monitor mobile marketing activity, instigate controls and checks to mitigate abuse, and encourage best practice if they are to build consumer confidence in mobile marketing. This will allow brand marketers to fully exploit the channel and successfully engage their target market in mutually beneficial communications.