Feature: Marketing on the move

There are more mobile phones than people in the UK. With 95% of the UK population owning a mobile phone, penetration outstrips the PC by ten to one. The mobile phone is now one of three things, along with the wallet and keys that the majority of people will not leave the house without.

It isn’t just the humble text message that is used and handset technology is developing so rapidly (and bear in mind most people get a free upgrade every year in order to keep up) that there are now more ways than ever to reach your audience with content rich media.

Findings published at the beginning of this month by Q Research indicate that the youth market is leading the field when it comes to not only embracing mobile advertising but preferring rich media. When asked what type of advertising they would prefer to receive on their mobile phone, 45% of respondents said text, 53% video and 70% picture advertising. In the same survey 32% of respondents said they are willing to receive adverts to their mobile and this increased to 71% for adverts on things they have an interest in and 76% on special offers.

With the exception of SMS, what are the different formats in which information is passed to the mobile?

MMS - Multimedia Message Service

MMS is an evolution of text and enables rich media including text, sounds, images and video to be sent to other MMS capable handsets. Most handsets are capable of accepting MMS but if not, the information can be retrieved from a website.

Bluetooth

Bluetooth is a radio technology making transmission of signals over short distances. It can be from a variety of electronic devices ranging from mobile phones to laptops and other hand held devices. Many promotions are now making use of Bluetooth with information such as coupons and vouchers being sent from advertising display boards.

Ringtones, wallpapers, games

These formats are often downloaded by the consumer and may be funded by the advertiser. Think “Crazy Frog”…or rather don’t.

Mobile internet banner ads

The major UK operator portals – Vodafone Live!, Orange World, O2 Active, T-Zone and Planet 3 – account for the vast majority of all mobile internet traffic. These portals are now getting enough traffic to sell banner ads on a CPT basis.

Mobile TV

Mobile TV offers immense potential for consumer engagement, but is yet to achieve widespread adoption. For example ITV1 achieved only 1,800 viewings a day three weeks after launch. Besides being a relatively new mobile format, mobile TV has been hampered by low penetration of 3G take up, without which it cannot be viewed. Earlier this month Sky released plans to offer mobile TV to 3G users in a bid to take the platform mass-market.

Mobile internet (WAP) - Wireless Application Protocol

WAP is used for mobile communications, allowing mobile devices to access information from a range of sources, notably the Web.

Mobile search

Google, Yahoo! and MSN are in battle with each other to sign up the networks. When people get used to using facilities such as Google Local, consumers will be able to search content on the move and at the click of a button.

Text still reigns supreme

Text messaging (SMS) has emerged as the pre-eminent non-verbal communication channel. Among 15-24s, 48% prefer SMS to any other form of written communication, compared with 28% who favour email, and 20% who opt for Internet Instant Messaging (Source: IPA Touchpoints survey 2006). But it’s not just about the teens. SMS now accounts for 36% of total written communication for all women (compared with 23% for men). Text is a way of life. We chat, argue, flirt, praise and ditch one another every day via text.

The mobile channel provides immediacy, engagement, interactivity and instant measurement. But here’s the rub: the mobile is an intensely private medium. Today an estimated 95% of text messages are opened, compared with 25% of emails (Source: IAB). The next growth phase for SMS is very delicate, so we must tread carefully. Campaigns must be permission based, respect privacy and adhere to legislation. [Footnote 2] In essence, consumers need to ‘opt-in’ to receive mobile marketing, and must be able to ‘opt-out’ with ease.

Guide to existing and emerging mobile formats

The array of mobile formats may seem baffling. Some are well established, others are yet to achieve serious scale. The effectiveness of each lies in the convergence of consumer take-up and ease of use.

SMS

SMS remains the dominant mobile format. Over 100 million text messages are sent in the UK each day and volumes reflect major events: on July 1st 2006, the day England clashed with Portugal in the World Cup, that figure peaked at 140 million. Brands from multiple sectors are harnessing our texting habit to provide SMS-based campaigns which make our lives easier, like telling us when our credit is due to be paid. SMS campaigns rely on memorable keywords and five digit short codes which provide respondents with a shortcut to enter competitions, to launch mobile internet sites, and to source targeted goods and services.

The main factors affecting redemption rates for SMS campaigns, as opposed to traditional Sales Promotion mechanics include:

The value and the desirability of prizes

The amount spent on the product versus the perceived value of the offer

The type of product and how consumers use/interact with it e.g. a snack food with a high volume, purchased daily versus a cereal product with a lower volume, purchased every few weeks.

The volume of consumption and frequency of people responding

The difficulty of finding an on-pack code and the complexity of the code message to be written on the text entry

The timing of the promotion (i.e. if the product has seasonal sales variations)

If the offer is restricted to one application per mobile number

SMS – Instant Win

Consumer finds a lucky code on-pack and sends a text message to an SMS short code. If the code matches any of the pre-selected winning codes, the consumer wins and is notified immediately e.g. promotions can include win a prize every minute/hour/day.

Depending on how difficult it is to initially find the winning/losing message PIMS-SCA would recommend the normal redemption range to be lower than a traditional Instant Win mechanic therefore between 2 and 25% as opposed to 25 – 50%.

SMS – Collector

Consumer texts an on-pack code to obtain points, which can be collected and exchanged for different prizes. PIMS-SCA would expect this mechanic to redeem lower than a traditional Collector promotion therefore between 1 and 4% compared to 5 and 10%.

SMS – Prize Draw

Consumer texts their contact details to participate in a draw where prizes are allocated on a completely random basis. In this mechanic there is no redemption risk for the prizes on offer as the promoter intends to give away all the prizes. However there is a risk from the costs involved in handling each application if more consumers participate than predicted.

When putting together an SMS activity, promoters need to be aware of the main factors which can impact on promotional budgets:

The risk of over redemption – i.e. too many people responding to the promotion

The costs per redemption

The value of the prizes on offer

The cost of receiving and responding to SMS entries.

Many promotions incorporate a return message to entries, from the promoter notifying consumers that there entry has been received or if they are a winner, for example. In this case, if more people enter the activity than anticipated, and they each receive a return text message, this can prove very costly to the promoter. For example,

Promoters would typically pay 4p-5p per return message to participants, unless this is borne by the consumer’s SMS message.

A promotion with a large pack universe therefore needs to carefully consider the cost of responding to consumer entries; e.g. a pack universe of 10,000,000 with a 5% response would generate £20,000 to £25,000 worth of return SMS costs.

Obviously a higher response rate will result in increased costs which can all be covered by the Promotional Risk Management Company.