Connecting brands with the mobile sweet spot

For most in the wireless industry, marketing has been an opportunity lurking in the shadows – plenty of hype and lofty dreams resting squarely on the potential that marketing can deliver. And yet most companies’ interest ends when it comes time to pay the piper.

That’s not to say there aren’t companies making hay out of the existing mobile marketing business. Mobile marketing has climbed to a $4 billion market annually, according to the latest projections. While that number pales in comparison to traditional marketing spend, some wireless executives and industry leaders say the market will double this year alone.

The “year of mobile marketing” has been predicted many times, and because of that, many of the very groups and people that could help make that happen are sitting on the sidelines. Companies willing to take big chances with their dwindling marketing budgets are hard to find, and it’s a problem that’s growing more pressing by the day.

With so much resistance and nagging problems like funding, measurement roadblocks, and the absence of industry-wide guidelines standing in the way, mobile marketing has become just as much a red flag in one camp as it is a checkered flag in another.

“Folks are thinking about the promise of mobile … but today as we’re growing up, we really just want people to think of mobile as a medium,” David Katz, VP of mobile advertising and publishing at Yahoo, said on a panel at CTIA recently. “If they just lined us up against TV and any other medium, they’d be very happy.”

With all the talk about mobile marketing not reaching its point in the sun yet, Moderati CEO Jon Vlassopulous is convinced that only means the market opportunity will be even greater than imagined. “It’s definitely a nice, new way for marketers to get involved,” he said.

MTV Networks is one company that has seen steady growth in mobile advertising over the last two years; in 2007, the company brought in a negligible amount of revenue from mobile advertising. But today, MTV has a dedicated mobile ad sales staff, according to Greg Clayman, the company’s EVP of digital distribution. It wasn’t too long ago that MTV considered mobile an experimental marketing option, and little more than that.

All in all, there was no mistaking the fact that mobile was high on the minds of CTIA attendees, and not for all the usual reasons or dreams of the mobile promised land.

Hi, I’m not a PC
It’s so patently obvious it borders on the mundane, but when it comes to marketing, one of the greatest factors mobile has going for it is that it’s not a PC. On the flipside, PCs don’t suffer from the limitations (some blindly inherent) that mobile gets plagued with. But for some, mobile is a welcome respite from the sometimes greater mess online.

“We always say to brands that mobile is just better internet,” Moderati’s Vlassopulous said.

Yahoo’s Katz said mobile’s greatest challenge lies in its areas of instability. “It is a multi-legged stool, but it’s not that much more complicated than what happens on the PC,” he said. “We do see – and I think it is conventionally known now – higher clickthrough rates on mobile than PC. It has to do with the usage models.”

Katz added that he’s a little surprised to find ad models that were discredited on the PC years ago now crawling their way to mobile.

“When you put up a bad quality ad, you may put up a great ROI for an advertiser, but you’re going to piss off the consumer over time,” he said. “We’re a lot further along on the PC … we’re just figuring out how to do that on mobile.”

BrandinHand President Eric Bader said his firm has seen twice as much interaction on mobile versus online using the same amount of money. He argued that mobile regularly gives a bigger return on the same investment.

The battle for dollars
“Right now, mobile spend is so small that it’s actually somewhat impervious to the fluctuations in the market,” Bader said. “There’s no such thing as a mobile budget. Brands don’t have a mobile budget. Mobile budgets are earned; they’re derived from other channels.”

Historically, a potential client would only request a mobile campaign when they’re in a “use-it-or-lose-it scenario” following the cancellation of some more experimental endeavor. Though, Bader said, those experimental dollars are drying up.

The level of investment in mobile from large brands is so minimal that Bader calls it a “rounding error.” The challenge in getting more investment is simple enough to overcome. The easiest way to get clients to re-up on mobile is to prove that the same dollars in mobile outperform other channels.

“Mobile budgets are in the digital budget,” according to Paul Palmieri, president and CEO of Millennial Media. Palmieri is emboldened by the opportunity to reach larger audiences and said some mobile companies have come to him saying they’d like to try mobile first because of its performance.

Greater than branding power
What may have started as another outlet for banner ads and simple brand awareness has become something entirely more useful.

BrandinHand, for example, uses eight different business objectives when approaching mobile campaigns.

“There’s a whole other world in mobile advertising and mobile marketing that we’re currently engaged in,” Bader said. “We don’t just use it for brand awareness.”

Trials, sampling, database growth and management, productivity in-store, interactive shopping lists, and loyalty programs are just some of the services that have become the flavor of the week at many firms.

BrandinHand’s strategy is to tackle brands’ problems whether they might be failed revenue opportunities or glitches in existing services. Wal-Mart loses an average of $60 in potential sales every time a customer leaves the store, Bader said, adding that there’s probably a mobile solution that could fix that.

Regardless, campaigns shouldn’t be pursued as a one-size-fits-all proposition, said Jack Philbin, co-founder and president of Vibes Media. Nearly every campaign’s objective comes down to the CMO involved in the project.

“Conversions have different definitions for different people,” Philbin said. “You’re basically building an experience with people in a very different method and manner” with branded entertainment. “You can be in the same industry with very, very different objectives.”

As such, solutions have to be matched up with each client’s unique problems, he added.

Gauging value with less data
It should come as no surprise that so much of mobile marketing’s success rests in the numbers.

“We need brands to be measuring performance on mobile to grow this into a business of a size that matters for a company like Yahoo,” Katz said.

Bader argued that the players need to collaborate on building a data stream that gets incorporated into much larger business tracking platforms than today. Most agencies currently do little more than make “pretty pictures out of data,” Bader said, hinting that a more comprehensive approach is needed.

“Fundamentally, you’ve got to choose who we’re going to please first and who we’re going to please later,” Palmieri said. Millennial Media focuses on the advertisers.

Vlassopulous said he’s found that mini case studies are the easiest way for marketers to find their way around the numbers trap. “We’re rolling out the carpets and walking it every day,” he said.

Measurement shouldn’t go completely away, Vlassopulous said, but there are more valuable data points that can be provided through mobile campaigns.

Placing value or potential return on a client’s investment is the tricky part, he added. He routinely finds himself asking “what’s the return on that?” and readily admits “I’m not sure how to track it.”

Campaigns to remember
Marketers can now point to numerous campaigns as mini case studies to convince brands of the potential impact mobile can deliver.

Moderati’s Vlassopulos said he’d like to see one genuine, large-scale campaign hit every media outlet on the map. If a campaign of that magnitude was supported by a large media event and included major touchpoints such as the iPhone, TV commercials, and short codes, the industry would have the most powerful case study on mobile marketing yet.

Like many others, he believes the greatest case for mobile marketing can only be made through direct comparison with other media in the same campaign. Part of the problem is that agencies and brands that are used to traditional media have become lazy, Vlassopulos said. Oftentimes $300 million will get budgeted in one meeting for a traditional campaign, whereas mobile carries a much smaller price tag, involves a lot of stops and starts, and all for much smaller numbers.

BrandinHand’s Bader talked about the boost mobile is giving to film releases. While film marketing typically gets delivered around a 48-hour push leading up to theatrical release, there are many forces that cause potential moviegoers to change their minds by the time Friday rolls around, Bader said. Mobile enables studios to sell tickets days before the release date when hype is at its strongest point. 

Car dealerships are using mobile to book test drives. “Frankly, it’s the same concept as the movie example by getting people to commit,” Bader said. “If you can enable it right there … that matters to a car dealership.”

Finally, Bader discussed a recent campaign his company did for Charmin. “Most people have no interest in having a relationship with the Charmin brand,” he said. With that in mind, the teams identified a problem consumers might be having and determined a reasonable connection to Charmin. So they came up with a mobile-enabled database that lets users search for top-rated clean public restrooms on a map. Being a wiki, the platform allows people to contribute comments and ratings as well.

Vibes Media pegs its mobile marketing strategy around integrated campaigns. It’s less interested in impression-based advertising.

The company recently worked with Subway on a campaign that delivered mobile coupons while interacting with users, Philbin said. Looking back now, he said it’s nearly impossible to gauge the success of the campaign based on metrics or usage.

“Redemption in couponing is one of the really hard points in the industry,” he said. “It really varies by retailer, depending on their actual scanning system. The mobile phone can obviously track all of that. We’re going to get there, but redemption is a huge issue right now.”

Vibes Media was not able to track redemption rates for coupon codes in the Subway campaign and that’s a perfect example of why many marketers and brands alike are still leery of mobile.

Still, there are points of optimism coming down the line. The Mobile Marketing Association announced that the four major U.S. carriers – Verizon Wireless, AT&T, Sprint, and T-Mobile – will be collaborating on a common set of marketing guidelines to make campaign rollouts easier and quicker to run.

The organization and carriers hope the agreement will help grow the mobile marketing space by reducing costs to the tune of $200 million a year. The MMA will be releasing a draft of the guidelines in early May, and a final document is expected by the end of June.