Goin’ Mobile

CMO Magazine, June 2005

Nike is doing it. So are Volvo and Allstate. Hyatt tried it. “It” is mobile marketing—a direct, personalized channel of communication with the power to touch people anytime, anywhere via their mobile phones and other wireless devices. Consider the possibilities: There are some 184 million U.S. cell phone subscribers, collectively sending billions of text messages a year to one another, according to JupiterResearch. That’s 184 million potential customers, each one carrying a perfect little message-delivery system.

It’s a space that’s intimate and accessible at the same time—a space, in other words, that no self-respecting marketer can afford to ignore.

“Mobile marketing is personal, it’s interactive, and it has reach,” ticks off Jim Manis, global chairman of the Mobile Marketing Association (MMA) and a senior vice president at m-Qube, a major player in the nascent market for mobile content and applications. “You can reach your customer where that customer is at any time, connect individually and develop an interaction.”

In its full flower, proponents say, mobile marketing has the potential to serve up truly innovative opportunities. Picture shoppers downloading product information from your website as they comparison shop in an electronics superstore. Imagine preferred customers redeeming coupons by entering cell phone short codes directly into a point-of-sale system. Consider the ability to beam out customized video- and audio-rich messages to consenting consumers over a wide array of technologically advanced devices—next-generation PDAs, handheld gaming devices, digital music players, VoIP handsets—any device, really, that has a wireless connection and a screen as big as a business card.

Right now, however, when brand managers talk about mobile marketing, they’re talking about sending text messages to mobile phone users—and the occasional BlackBerry fan—who have opted in to play a game, download a ring tone, receive a sales promotion, enter a sweepstakes or receive content such as sports scores, headline news or weather updates.

“Consumers these days are mobile,” says Roman Vega, brand manager for Jordan, a Nike division that is exploring the medium. “As a brand and as a marketer, if you can’t bring them in to where you want to be, you go out to them.”

Mobile is hot right now, almost as hot as another market boom we all remember fondly: the Internet. “There’s a direct parallel between where we are in 2005 with wireless marketing and where we were in 1994 with the Internet,” says Bill Carmody, CMO at Seismicom, a brand promotion agency.

As in the early days of the Internet, however, there is as much peril in the marketplace as potential, cautions Carmody. The mobile arena is in a great deal of flux: Business models have yet to be hammered out, m-commerce standards are still in their infancy, fraud issues are still unresolved, and there is certain to be a winnowing of the many companies jockeying to take your message mobile. “Everybody is stumbling around in the dark right now trying to figure out this new medium,” says a national marketing firm director who asked to remain anonymous.

Companies that are only too happy to gush about their mobile campaigns grow coy when asked about results. “I would say right now 85 percent [of mobile initiatives] aren’t working,” says the director. “And the 15 percent that are working, well, those guys aren’t about to give away any secrets to their competitors. If anything, the people who have figured mobile out are even more paranoid than the people making all the mistakes.”

Companies aiming for the winner’s circle are taking a cautiously optimistic approach, launching pilot programs in select markets for specific customer demographics. And, rather than using mobile alone, they are adding wireless elements to highly integrated campaigns that also incorporate outdoor, online, desktop, print, radio and television. “I can say with confidence that we haven’t seen anybody who’s ready yet to do a pure-play mobile campaign,” says Cyril Lemaire, CMO at Euro RSCG 4D New York.

“If you’re concerned about fraud, if you need to see effectiveness and prove a rate of return, now is not the time to roll out a nationwide mobile campaign,” Carmody advises. “Start with a controlled environment, and see what the enhancement of wireless can do for you first.”

Testing the Waters
Long humbled by the explosive market in Europe, mobile marketing is coming into its own stateside as cell phones with microbrowsers gain critical mass, the population of mobile phone users increases, and text-messaging via short-message service (SMS) becomes the norm for a widening demographic of users. What’s more, a wave of technological improvements now making their way to the marketplace will soon let brand managers connect with customers in a richer, more user-friendly environment. Multimedia message service (MMS), the next generation of messaging technology, enables cell phones to send and receive graphics, video clips and sound files. The current WAP (wireless application protocol) and forthcoming WAP2 enable Web-browsing from cell phones, and evolving 3G data standards provide high-speed connections to make cell phone Web browsing as fast as an office Internet hookup.

All that growth and innovation has a wide range of marketers testing the mobile waters.

Allstate deepens its long-term sponsorship of Bowl Championship Series college football by putting its brand on standings delivered to fans who sign up for the alerts. Online powerhouses Yahoo, Google and MSN extend their reach by delivering news, sports, weather and other user-selected content to mobile customers. For a limited time, Hyatt offered selected business travelers (who opted in) special rates on hotel rooms.

Nike has also put its foot into the mobile waters. To commemorate the 20-year anniversary of the Air Jordan basketball shoe, Jordan, a division of Nike, developed the Air Jordan XX, a shoe that honors Michael Jordan’s basketball legacy with a series of 20 enigmatic icons etched onto its straps. A stylized 69, for example, represents Jordan’s highest single-game score; a six-fingered hand commemorates his six NBA championship rings.

“Consumers these days are mobile. As a brand and as a marketer, if you can’t bring them in to where you want to be, you go out to them.”
- Roman Vega, brand manager for Jordan, a division of Nike

To build buzz around the shoe, Jordan rolled out an integrated marketing campaign in mid-January that featured television, print, online, desktop and in-store elements, and for the first time in a nationwide Jordan campaign, a significant mobile piece, according to brand manager Vega. Consumers were encouraged to collect a series of clues to decipher the meaning of each shoe icon and then register on the Jordan website to play in an interactive game hosted by Spike Lee. Game winners received Air Jordan products, and the grand prize winner traveled to Denver for the athletic shoe’s launch during the NBA All-Star weekend in February.

Users could download a desktop application that provided access to clues via streaming video and could also sign up to receive bonus clues on their mobile phone, either as text messages or voice mail. Cell phone users also could download their favorite icons onto their handsets and sign up to receive voice mail from Lee.

Given the age and gender of its target customer—16-to-20-year-old males—the mobile piece was almost a no-brainer, says Vega. Delivering special clues only to cell phone users helped create the feeling of an inner circle, which is important to his customer base. “Jordan consumers are so in touch with the brand, they want to be a part of it. It’s pretty cool for a 16-year-old to get voice mail from Spike Lee,” he says.

Jordan customers seem to agree. The campaign generated more than 108,000 text messages and mobile downloads, a number that Vega says he is “very excited about.” And at the Denver product launch, many kids came up to Vega to show off the icons they’d downloaded to their handsets. “For me, it was encouraging to see that, especially in Denver, which is not a top market for us,” he says.

On the Track
Together companies have also found success with their early mobile marketing efforts. Volvo Cars of North America experimented with mobile as part of its XC90/NCAA College Football campaign in 2003. The company tapped it again for the four-month 2004 Volvo XC90 Winning Drive campaign, which also used online and television.

The online component included Volvo’s sponsorship of ABC’s Enhanced TV (eTV), which lets television viewers who use computers interact with certain broadcast shows by answering questions, joining discussions and responding to polls. The sponsorship gave the carmaker the opportunity to deliver messages to eTV-registered users on their mobile devices.

Opt-in mobile users received a text message from Volvo urging them to register to win a 2004 XC90 SUV by visiting the Winning Drive website. At the site, they could sign up to have football scores delivered to their mobile devices throughout the season.

The mobile component was used primarily to drive traffic to the campaign’s website, according to Denise Clause, eBusiness Manager for Volvo Cars of North America. “We always try to reach out to our consumers using newer channels, and we wanted to include mobile as a component,” says Clause. “Mobile was intended to supplement and complement the other media components, and we were quite happy with the volume.”

Indeed, 134,000 people signed up on the website for the contest, with 51 percent opting in for future communications from Volvo Cars of North America, according to Clause. “The goal was to acquire registrants and to establish a dialogue with potential customers,” says Lemaire of Euro RSCG 4D New York, which partnered with Volvo on the campaign. “The mobile and the sports were a different marketing approach for us than moms or crash-test dummies. People with mobile phones, they’re technology early adopters. They’re going to be vocal, they’re going to talk to their neighbors and friends.”

Keys to Success
In mining the new medium, the Jordan and Volvo campaigns incorporated two elements that mobile marketers say are critical to success: opt-in and value-add.

Bruised and battered by years of telemarketing and overwhelmed by a more recent flood of spam, Americans are in no mood to have their mobile phones ringing with unwanted communication of any kind—especially when they may have to pay to receive it. “The cell phone is such a personal medium. Consumers will get angry at anything that looks in the least bit like spam,” says Heidi Lehmann, vice president of strategic alliances at Third Screen Media and vice chair for the MMA’s best practices committee.

To prevent a campaign from blowing up before the first phone rings, a brand must put an unequivocal emphasis on protecting its customers’ privacy with clearly delineated opt-in programs, says Lehmann. But beyond the issue of opt-in are more ticklish questions that need to be addressed. When a customer opts in, how long does that permission last? And what products and services does it cover? If a consumer signs up to download a free ring tone, for example, can you contact him about other related giveaways?

Jordan’s Vega has no qualms about reusing the phone numbers of consumers who opted in to the Air Jordan XX campaign to deliver information on other Jordan products. But others aren’t so sure. “We advise our clients to be very cautious about moving too far away from what [the customer] actually opted in to,” says Steven Feuling, CMO at Starcom Worldwide, a media buying and planning agency. “You don’t want to be in the dangerous position of appearing in any way spamlike.”

To avoid that appearance, marketers must offer customers real value in exchange for their opt-in, says Feuling. “If they’re allowing you to get close to them in their personal space, you need to truly offer value to the consumer.”

But value is a slippery commodity, one driven by demographics. The same free ring tone bonus that sends a 16-year-old male reaching for his mobile will leave a 35-year-old mother of two unmoved. Indeed, marketers shouldn’t contemplate mobile without knowing three crucial things about their target demographic: Are consumers open to mobile marketing? Are they comfortable with mobile devices? And what do they value?

It’s no coincidence that mobile campaigns like Jordan’s and others have targeted “Millennials,” those in the 16-to-24-year-old segment. These cell phone-toting consumers are perfectly amenable to paying for ring tones, playing games on their handsets and giving out phone numbers and e-mail addresses for contests and other promotions.

“In the same way that Gen X-ers pioneered the Internet, Millennials are pioneering wireless,” says Seismicom’s Carmody. “They’re completely comfortable with the technology. It’s part of their culture.”

Gen X-ers and Baby Boomers aren’t quite so fluid. To those groups, an invitation to join a contest or hear voice mail from a celebrity can come across as an invasion of privacy, a waste of time or both. “Gen X-ers and Boomers are looking for a lot less responsiveness,” says Carmody. “They say, what’s the offer and am I interested or not?”

A good offer, though, will pull those groups in, as Third Screen’s Lehmann has found. For example, marketers have had much success with “click to call” programs, which send promotions to the cell phones of business travelers, who then call a dedicated line to book a hotel or reserve a car at a discounted rate.

Such programs—indeed, to some degree, all wireless promotions—come with a built-in degree of trackability, which is like catnip to CMOs. “Targeting and accountability"—two of mobile’s big strengths—"are extremely appealing to marketers,” observes Lehmann.

But while companies such as Jordan and Volvo can easily track click-throughs, the larger metrics question remains to be addressed, acknowledges Irené Waldman, director of marketing services at Visa USA and cochair of the MMA’s new metrics committee. The up-front analytics of a given campaign may be easy to gauge: where a customer comes from, how he responded to an offer, what he opted to receive on his mobile unit. What’s not yet clear is how to measure whether mobile marketing influences his feelings about the brand and his willingness to actually make a purchase.

With many brand leaders holding back from full-bore mobile until they see empirical evidence of influence, either from their own campaign or somebody else’s, the MMA metrics committee is now in the first stages of designing a study that will measure mobile marketing’s positive or negative net effect, Waldman says. MMA hopes to have results by midsummer.

In general, observers predict that the next 12 to 18 months should bring some growth and maturation to the mobile market, making it a more stable medium from which a wider array of companies can benefit. But for the present, those Internet bubble comparisons still ring true.

How to flourish in such an environment? “Marketers who didn’t lose their heads during the dotcom boom kept asking: What is my objective here? What is the best way to reach my customer?” reminds Seismicom’s Carmody. “Yes, we’re all looking at a ton of options with mobile right now, but you have to keep going back to the basics.”