Mobile Marketing & the Challenges that Lie Ahead

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360i Point of View on Mobile Marketing & the Challenges that Lie Ahead

August 2010

Overview If this Summer of Mobile series has been largely bullish on mobile marketing, that’s because the vast majority of marketers can be doing more to reach consumers who are increasingly turning to mobile as the first screen, not the third. We’ve attempted to address the challenges that marketers face, and those are enumerated here. By understanding the challenges, marketers can plan for them and, in the best case scenarios, use them to their advantage.

This is the seventh and final report in this series on mobile marketing. Read the previous editions on 360i’s Digital Connections blog, where you can also subscribe to receive more updates on mobile and digital media. You’ll find much more coming on mobile marketing and media.

Key Marketer Challenges

1) Insights are often less accessible. Some research firms have beefed up their mobile offerings over the past year, but such information often isn’t as robust as what’s available for websites and internet users.

2) It’s another source of data to monitor. Marketers need to analyze how mobile users

are accessing their mobile sites and how those behavior patterns match up with what users are doing online. This can be even more complicated if there are separate mobile sites and applications.

3) Fragmentation will be one of the more persistent mobile marketing challenges.

Which devices and operating systems are used by your target customer base? How does your target audience divide their time across various mobile channels? How can you find them across a jumbled array of publishers and ad networks? How do you develop enough creative units that work across all of the devices included in a media plan? Fragmentation becomes a hurdle at so many stages of the process.

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August 2010

4) Scale will continue to be a challenge in the short-term. Consider mobile search

projections from RBC Capital Marketers that ran in Silicon Alley Insider. Over the coming years, mobile search will grow at a faster pace than global web searches, but even in 2012, mobile volume will be about a quarter of web search. The issue of scale pops up everywhere, and it’s closely correlated with the fragmentation issue. Do you target consumers on the iPhone where mobile media consumption is robust, or do you go broader across different devices and operating systems to achieve the maximum reach? Scale issues will ease as more publishers, networks and devices ramp up their users, usage and inventory.

5) Many marketing opportunities are entirely new for mobile. From SMS ads to

location-based check-in deals and mobile barcodes, these new opportunities require new creative and new thinking for how to best use them. The biggest challenge is the learning curve to understand how these very new marketing opportunities can tie in with marketers’ overarching strategies.

6) Costs tend to be too high or too low. Advertising rates tend to be higher than what

marketers are used to paying for similar inventory online, sometimes exponentially so. These costs can often be justified (refer to mobile’s brand impact in the Mobile Marketing Overview for some rationale), but it makes mobile more difficult to sell. Alternatively, marketers will often run mobile campaigns with miniscule trial budgets so the impact underwhelms, and there isn’t a chance to optimize the campaign. Disheartened, marketers can wind up dismissing mobile as ineffective before fully understanding how to best use it.



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August 2010

7) Integration is imperative. Given how seamlessly consumers use their mobile devices

to navigate between digital and traditional experiences, marketers need to tell a cohesive story. Email and radio can build SMS lists, in-store messaging and Sunday circulars can promote mobile shopping apps, and barcodes on packaging can drive video views of a trailer. This requires coordination across marketers’ organizations and agencies that wasn’t always done with online marketing, and wasn’t always necessary in the same way it is for mobile.

8) The ownership of mobile in a marketer’s organization is often unclear. Is the

owner a digital marketing lead, even if mobile has major traditional marketing implications? Is mobile used strategically or more tactically? Which agencies can handle which elements of mobile marketing? Top-down buy-in can elevate mobile’s visibility within an organization, but it also needs to be clear who will execute on the vision.

9) The pace of innovation and change continue to accelerate. Quick, name the latest

“iPhone killer” Android phone being released this week. Name the top paid and free apps in the iTunes store. Name the hot mobile ad network that just got funding. Whatever the answers are, they’ll be different next week. Some of what’s new and improved will matter, and much of it won’t. Even established companies may be under the radar for marketers with limited experience in mobile. Companies like 4INFO, Greystripe, InMobi, Millennial Media, NearbyNow, Nexage, SCVNGR, Square, ShopSavvy and Whrrl all sound like some alphabetic jumble until marketers understand how they fit in with mobile advertising, shopping and social media.

10) Mobile shopping can try the patience of marketers and consumers. Coupon

scanners can be difficult to implement at the point of sale. Staff in stores must be trained how to accept mobile barcodes or SMS-based coupon codes. The variety of barcodes adds to the confusion. With completing transactions, the challenges include security concerns, on-site usability issues and widely varying capabilities by merchants.

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August 2010

All of these challenges can and will be overcome. Some require a learning curve, from marketers figuring out how to run integrated mobile programs to consumers learning how and why to scan a barcode. Many just take time, as the trends of smartphone adoption, mobile search usage and mobile shopping are all accelerating at a fast clip. Marketers have an incredible opportunity today to address these issues head on: ramping up adoption by educating their colleagues and their consumers, pushing their research vendors, agencies and publishers to address their needs and continually optimizing their mobile programs to better achieve objectives.

360i’s Concluding Thoughts

We’re now at a turning point, where mobile usage is prominent enough for it to be a viable marketing channel for any kind of marketer or brand. At some point, mobile media usage will likely rival and then surpass internet usage, and this will fundamentally change how marketers find and build relationships with their target audiences.

There are tremendous opportunities within mobile. The perspectives throughout this series on mobile can help make the case to expand your mobile marketing initiatives, from the market norms to the shopping habits to the best practices for a range of mobile advertising tactics. Beyond all this, there’s the opportunity to experiment, learn, optimize, lead and serve consumers in ways that competing brands aren’t able to do yet. These benefits can further add to mobile’s returns.

Granted, mobile marketing has its challenges, from fragmented handset and operating system markets to evolving metrics and pricing standards. And the last thing any marketer should do is to allocate a few dollars to some mobile add-on just to be able to say they’re doing mobile marketing; that only sets up such programs to underwhelm the marketer – and the consumer.

Such obstacles, though, shouldn’t get in the way of incorporating mobile when and how it makes sense. With all of the opportunities mobile offers today, at this point mobile should be included in any major integrated campaign or marketing program, and it should always be part of the consideration set.

Next Steps Contact your strategic advisor at 360i to figure out how to further your goals through mobile marketing.

About 360i

360i is an award-winning digital communications agency that drives results for Fortune 500 marketers through insights, ideas and technologies. 360i helps its clients think differently about their online presence and evolve their strategies to take advantage of the new world of marketing communications – one where brands and consumers engage in interactive and multi-directional conversations. Current clients include Kraft Foods, JCPenney, Coca-Cola, NBC Universal and H&R Block, among others. For more information, please visit blog.360i.com or follow us on Twitter @360i.

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Mobile Marketing & the Challenges that Lie Ahead