At last the stage is set for the triumph of mobile marketing

With telecom companies moving into media communications, mobile marketing could soon start living up to its media hype

Damian%20BlackdenIf you were to divide the current annual revenues derived from mobile marketing by the number of column inches written about the subject, you’d get a bloody small number. And yet we all feel compelled to write about it because it seems to have remained on the brink of actually fulfilling its potential for years.

I really think we’re getting there now. Many recognise that the mobile marketing opportunity is becoming much more of a reality – but I don’t think quite so many appreciate the seismic changes that are taking place.

Powerful telcos are having to switch whole industry categories, entire business models are being turned inside out, and there’s an ongoing betting game in play between basic and focused push marketing formats versus richer, contextualised pull-based techniques.

Many more people have significantly greater access to mobile content these days. Last year more than a billion phones were sold globally – that means 15% of the world’s population bought a new handset in 2006. And an increasing number of those were high end multimedia handsets.

There’s a second factor which is driving accessibility though: the cost of data. Historically the mobile carriers have relied on high margin income from data charges (the charges levied for accessing the internet, downloading videos, photos etc.) while they aggressively compete for market share via discounted call charges and handsets.

Phones When consumers did try to access the internet, the carriers did everything possible to keep them on their own mobile portals. First of all by making other mobile content harder to find and access, but also more expensive to view. This isn’t a new strategy. AOL applied similar principles several years ago and found that it was workable in the short to medium term, but not as a sustainable business.

The carriers have recognised the signs. They’re reducing the cost of data and making all mobile content easier to access, helped by the likes of Google which has established a beachhead on many handset homepages and favourites, by bundling its service as a pre-loaded facility.

However, this new cheaper and more accessible content is coming to consumers at a high price – a much greater amount of marketing activity will be aimed in their direction – however it will be more effectively targeted too. This is down to the carriers’ recognition that they have to generate incremental revenue from advertising and marketing if they are to compete in the new environment.

This is a very significant change in strategy. They are effectively changing industry categories from telcos to become media comms companies.

They’re restructuring and partnering with broadband and content suppliers in order to create new communication value bundles to attract subscribers – subscribers that they can profile, segment and target with relevant, engaging and timely marketing, for that is the only type of marcoms activity that’s likely to be accepted by today’s empowered and discerning consumers.

But there are new challenges. A new breed of mobile virtual network operators (MVNOs) are beginning to show us just how far the mobile sector could change. Eric Schmidt, chief executive of Google has gone on record on several occasions to say that he believes that ultimately mobile carriers will make their services free to consumers in return for being able to target them with advertising and other marcoms activity. He’s putting his money where his mouth is, with his ongoing strategy to provide San Francisco with free wi-fi in return for advertising of some sort.

Of course Schmidt has a vested interest in publishing that sort of view, given that his business is based on exactly that principle. However, MVNOs such as Blyk here in the UK and i-Wood in the Netherlands are in the process of launching highly subsidised consumer services, so long as their customers accept targeted advertising on a regular basis. Interestingly the new school MVNOs are betting on basic, highly targeted and efficient SMS and MMS formats, while the old school, like Vodafone, are putting their chips down on contextualised pull-based banners and video ads.

It’s easy to see why the new school are in the push-based game. Most forecasters put push at around 80% of the market value for the foreseeable future, yet most of the current advertiser obsession with mobile is focused on mobile video, branded content and so on, which could easily prove the forecasts to be inaccurate.

I’m keeping most of my options open at the moment, but I will place a bet. This is a battle that will be driven by the same two factors that defined the search engine conflict/ simplicity of interaction, but most of all relevance of content. Those that use exceptional targeting versus other media options in order to match customer and message will be the ones that start to see the greatest return on their stakes over the coming 18 months.

Damian Blackden is director of strategic marketing technologies for EMEA at Universal McCann


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