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October 5, 2007

Giving Mobile Marketing a Try

Mobile marketing can be a great way to create customer loyalty, increase sales, and generate awareness about your business. However, a mobile marketing campaign differs from a campaign on the Web. Several different varieties of mobile marketing campaigns exist. One of these ways is an opt-in SMS (short message service) campaign. Consumers are persuaded to give the advertiser their cell phone numbers in exchange for special offers or alerts delivered via text message. For instance, a retailer might send SMS alerts to customers with a reminder that it’s time to reorder a product and then offer a 15 percent discount coupon urging them to buy now.

Another variety of mobile marketing campaign is a display ad designed specifically for local search on the mobile Web. Such ads can also be used to drive traffic to an offline business. Here’s an example of such a campaign: A consumer searching from Yahoo! Local on a cell phone might be trying to find information on running shoes. That consumer would be served an ad within the search results for a nearby shoe store. The consumer could click on the ad for more information or even click to call the store.

Marketing Potential

Currently, mobile marketing is used primarily by large corporations; however, online and offline companies are beginning to see its potential. A cell phone is a very personal device. People take it with them wherever they go. This makes it easy for marketers to develop a relationship with customers through their cell phones. Messages sent to a mobile phone are more likely to be read than email sent to a PC, which can get caught in the spam filter.

As a result, mobile marketing has the potential to be more effective than other forms of advertising. For instance, consumers typically redeem 5 to 20 percent of the coupons delivered to cell phones because mobile marketing campaigns are highly targeted and are opt-in. This compares to a mere 1 to 3 percent of coupons redeemed when received through direct mail or email.

Mobile marketing can help you gather valuable data like cell phone numbers for consumers interested in your products or services. Once a customer opts in to receive an offer or an alert via text message, you can put their information in your database and use it later for loyalty marketing and customer retention. Additionally, mobile marketing can help generate buzz about your products or services. Your offers reach consumers while they are actively shopping or socializing. This is when they’re more likely to make buying decisions rather than when they’re at work.

Growth Potential

The growth potential for mobile marketing is huge. The number of worldwide mobile phone users is expected to grow from 2 billion in 2005 to approximately 3.3 billion in 2010. Currently, there are over 2.8 billion mobile phone subscribers. In the U.S. alone, we had 233 million subscribers at year-end 2006, which is over 76 percent of the population.

SMS messaging is increasing as well. In December 2006, approximately18.7 billion SMS messages were sent in the U.S., an increase of 92 percent over the same period in the previous year. The global mobile ad market is expected to reach $9.5 billion in revenue by 2011, while the U.S. market is projected at $2.3 billion.

No doubt fueled by this exciting growth, reports are that 49.2 percent of marketers are thinking about conducting a mobile search campaign, and 13.8 percent will definitely conduct a campaign or test campaign this year, according to Marketing Sherpa.

Success With Mobile Marketing

To succeed with a mobile marketing campaign, you must know and understand your customers. For instance, you need to know if your customers are heavy text message users, and if they frequently use their cell phones to find products and services. If not, a mobile campaign may not be worthwhile.

If you do go into mobile marketing, don’t forget: Every mobile marketing campaign must be opt-in. Otherwise, you risk alienating your customers. It’s important to campaign wisely, as noted in the quote below from a December 2006 Forrester Research Report.

“The near ubiquity of mobile phones and accelerating consumer acceptance of applications other than voice make mobile a powerful new channel for marketers. When done right, mobile campaigns yield high response rates and increase consumer engagement. Still, 79 percent of consumers are annoyed by the idea of mobile marketing. To avoid consumer backlash against ads on their phones, marketers must adopt a mindset where value replaces interruption and campaigns are designed for an abbreviated and immediate mobile experience.”

The Cost of Mobile Campaigns

Mobile marketing campaigns can be expensive; however, there are some low-cost options you can explore. You might be able to find a carrier that allows you send or receive a batch of SMS messages for about $200. Some carriers do not charge their customers to receive text messages; others include a certain number in their standard plans, and these included messages usually cost less than 10 cents per message.

However, sophisticated SMS marketing services can start at $3,000 or more. This includes hosted, Web-based mobile messaging campaign software, which provides a dashboard interface, reports, a customer database, and various other tools. Then you can spend another $100 to $300 monthly for hosting fees, plus up to 10 cents per message. Some mobile ad campaigns run $5,000 to $10,000 and more. Inexpensive campaigns are called blind buys. You can’t select the mobile sites where you want your ads to display. These campaigns can be launched quickly, sometimes within a day. Expensive campaigns take more time to launch, but they allow you to specify the sites where you want your ads to display.

While it’s not yet common for typical Web sites to market directly to consumers via their cell phones, many companies are testing this strategy. It’s a good time to start learning as much as you can about your customers — find out what would trigger a response and what would be a no-no. Then experiment with a mobile marketing campaign. If you don’t, your competitors soon will.

Author:  Susan Esparza is the Senior Editor at Bruce Clay. She joined Bruce Clay in November 2004 and has written extensively for clients and internal publications. She also knows where the knives and forks go in a buffet line. The latter makes her invaluable to the Bruce Clay organization.