FMCGs regain their taste for mobile marketing

UK mobile operators are accelerating their marketing initiatives as ads sent via SMS and MMS become increasingly important for brands including Coca-Cola, Domino’s, Burger King and Marks & Spencer.

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The moves come as FMCG brands spearhead the growth of the mobile messaging channel, estimated by Informa Telecoms & Media to be worth $70m (£43.8m) in the UK by 2015.

Vodafone is set to become the third UK mobile network operator to launch a service enabling brands to target its subscribers via text message. It has issued a request for proposal to suppliers to run the service, according to industry sources.

Everything Everywhere, the UK’s largest mobile operator, revealed it’s preparing a further rollout of its Orange Shots service, launched last year.

Similarly, O2 Media is increasing the headcount at its rival initiative O2 More, investing in its location-based SMS ad service You Are Here, which is now responsible for over 50% of O2 More’s bookings.

The moves come a week after the Internet Advertising Bureau and PricewaterhouseCoopers published their mobile ad spend report for 2010, which revealed total UK spend on mobile was £83m.

Mobile messaging accounted for only £1.6m of total spend, despite O2 and Orange launching their mobile messaging services last year.

Clare Messenger, Everything Everywhere’s head of mobile marketing, told new media age that mobile messaging’s share of the IAB figures was below her expectations.

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However, Everything Everywhere aims to redress this by making Orange Shots available to its T-Mobile customer base by the end of the year.

“We hope to expand the service beyond the youth audience [its initial target base] to let advertisers target by behaviour as well,” said Messenger.

She added that in early trials, audiences aged 24 and over were more responsive to targeted mobile messages than those aged under 20.

“This may be because they have more disposable income, so we’ll be taking this into account when rolling out the service,” Messenger said.

Prior to the rollout across T-Mobile, Everything Everywhere will launch a website to let Orange Shots users indicate what types of ad they’d like.

Vodafone remains the only major UK operator without such a service. According to industry sources, however, it’s requesting proposals from agencies to help it launch a mobile ad messaging service.

A Vodafone spokeswoman denied that a service similar to O2 More or Orange Shots would be launched this year, though. If it were, Vodafone would be a late entrant in a rapidly growing market.

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O2 Media’s headcount is understood to have increased three-fold to 50 staff members since its inception last year, according to market sources.

Shaun Gregory, O2 Media MD, said the growth of the company has been bolstered significantly by the addition of its You Are Here location-based messaging service.

“Well over half the campaigns we’re booking are location based, and this has helped people wake up to the possibilities of SMS,” Gregory said, adding that O2 More’s customer base has almost reached 2.5m.

You Are Here has attracted the interest of brands including Burger King, Marks & Spencer and Streetcar.

Kamlesh Raichura, M&S’s head of CRM, said its recent location-based campaign using O2 More had proven effective at driving footfall to its stores.

“As the use of smartphones and technology develops, we’ll be able to continue trialling new projects and integrate the SMS programme with the mobile web and other digital campaigns,” he said.

Alistair Stewart, Streetcar’s digital marketing manager, said, “Using location-based mobile messaging has helped us get across one of our core messages: that one of our vehicles is always nearby.”

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He added that its recent O2 More campaign had proven so effective that it was seeking similar targeting opportunities beyond the O2 customer base.

FMCG brands including Coca-Cola and Domino’s Pizza are helping to spur the increased interest in mobile messaging as a marketing channel.

Jude Brooks, Coca-Cola’s interactive manager, said its latest mobile messaging campaign Gimme Credit was one of its most successful in terms of engaging with users.

“Coca-Cola wouldn’t be interested in just buying a list of names and then sending out a load of messages,” she said. “If it’s an opted-in list for people who want to receive messages then why not use it? SMS is good as a marketing tool but not necessarily as an advertising tool.”

Similarly, Domino’s multimedia manager James Millett said SMS is one of its most effective digital marketing tools. “Obviously, it’s not a channel for branding,” he said. “If we send an SMS to our customer base on a Friday night, it’s as effective as any other digital channel when it comes to response rates. It’s also a quicker way to get our message out.”

Media agencies approached by new media age have called for greater transparency when it comes to the opted-in figures reported by mobile operators, however.

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James Tagg, head of mobile at SMV Group, said, “Operators say to us they have x amount of people opted in. We’d like an independent way of verifying that for clients.”

James Connelly, MD of mobile specialist agency Fetch Media, also said that commercial SMS marketing was limited as a mass-market channel due to privacy issues.

“We’ve booked campaigns using O2 More for a number of clients, including Streetcar, and the results have been impressive, especially with the location-based element,” he said. “However, I’m limited in the number of messages I can book because some schemes have a cap of one a day. On other mobile channels [such as search or display], you can run 10-15 campaigns a day.”

O2 Media has moved to address such concerns among agency staff and has appointed Nick Pestell as head of agency sales at O2 Media.

“I think that as well as the industry, agencies and the way they approach mobile are going through quite a big change at the moment,” he said. “They’re looking to work with us to ascertain where mobile fits into the media plan so that it’s not just bolted on to strategies.”

This story first appeared on newmediaage.co.uk

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