Industry Blog

Marketing to a community of one

Time to read: 4 minutes

A few years back, if you could not deliver a crisp elevator pitch on your company’s “mobile advertising strategy,” you were regarded as a laggard and even somewhat foolish for not joining what was undoubtedly the gravy train of the century. This mobile advertising bubble reached a frenzy of hype at Mobile World Congress 2009 where I fear many people went home to purchase their very own hockey stick so they could remind themselves hour-by-hour just how much money they were going to make. In the end, the only people who saw hockey stick growth in revenue were the producers of those never-ending Mobile Advertising conferences.

We all knew advertising would come to mobile and it will be huge, that’s a given, but even now in 2013, the advertising dollars spent in the mobile channel lags far behind any other medium. For example, eMarketer revealed that in the US advertisers spend $66.35B on TV, but only $4.41B on mobile. The situation in Europe is similar. It’s not a question of technology - that has mostly been there for some years - it’s more about the difficulty of putting together a complex ecosystem of mobile ad-networks, publishers, agencies, and mobile operators. Additionally, it’s about consumer behaviour on mobile. Both of these factors still lack maturity. However, some things have changed in the past few years with innovative and interesting models appearing, and interestingly, it seems more to do with “mobile marketing” than “mobile advertising”.

Firstly, a new micro economy has spread over most of the developed world where increasingly all of us are becoming accustomed to making small, impulsive purchases for “instant gratification”. Whereas previously we would purchase a music CD, now we download a track. Previously we would purchase a word processor or a game, now we download an App. It’s not just the e-world, it’s the real-world, too. In many cities including for example London or Barcelona, there are racks of bicycles downtown. No need to purchase your own bike, just rent one for an hour or two. Zipcar encourages people to rent a luxury car just long enough to show off, literally an hour or two. And there are even companies such as air-bnb that will rent out your house for just a day or two to a visitor while you are away on holiday (….with your permission, one assumes).

Pushing this trend along is Internet culture which continues to educate the world that “everything must be free” – or at worst, very cheap. Either way there’s no going back to the old days of big, up-front commitments.

Interestingly, this trend did not start in the developed world. It has always been that way in the developing world. If you want to buy a cigarette in many developing countries, you buy one, not the whole pack. If you need one battery, you buy just one battery. This “just what I want, just when I want it” culture may be new to us in our “developed” world, but it’s not actually new.

Secondly, in the telecoms world, investment in Mobile Analytics continues to grow. TechNavio's analysts forecast the Global Big Data market in the Telecom sector to grow at a CAGR of 55.24 percent over the period 2011-2015. Whereas previously analytics was something of a luxury, it is fast becoming a necessity if only because we have finally realised that if we in the telecoms industry don’t do this, our Over-the-Top friends will surely do it for us. And they are not well known for being big-hearted with their revenues. Operators, as we have always known, hold vast amounts of data on user trends, behaviour and usage. This is simply because they are operating mobile networks on which data is flowing in an increasingly interconnected world. The new thing is that operators are at last finding ways to harness this data into up-sell and cross-sell opportunities.

Both of these trends are enabling the more innovative mobile operators to target small, highly specific groups of users with “just what I want, just when I want it” customised promotions.

One recent example is the regional carrier C-Spire in the US. Although they had a successful mobile data business, they realized that many users were not signing up for long term gigabyte plans as they didn’t believe they needed them. So, they launched a set of targeted plans to meet specific needs. An example is that they offer inexpensive data plans to “non-data users”. The plan is made affordable by restricting premium content such as video. Then, if the user tries to watch video, the first 30 minutes are free but after that they are invited to purchase the video for a few dollars. Given that this user is now at their point of interest, take-up rates are high. Data plans could be custom built and targeted to all kinds of specific cases. For example, service providers can analyze the sites that a subscriber frequently access and automatically build an individual plan around it.

A second example of targeted marketing using mobile as a medium is where operators are leveraging HTML5 coupled with mobile analytics to promote targeted content (as opposed to a targeted data plan as above). There are a few cases of this but one recent example is the Portuguese operator Optimus. They are currently using a “clientless browser toolbar” as a content promotion mechanism targeting small groups of users with interactive content beyond classic image and video. Such toolbars, coupled with analytics, can bridge the gap between niche third-party publishers and subscribers with specific interests but no inclination to go searching for content buried in the long tail of the mobile-internet. Furthermore, the analytics capability can include context such as location and current buying behaviours in order to fine tune the promotion. And of course, because it is HTML5, this capability is browser-agnostic. But where is the mobile operator’s revenue in this example? Effectively, the mobile operator holds the leys to what is valuable “advertising inventory” – they have the knowledge of each subscriber and can direct that subscriber to any source of content they choose. The operator can essentially offer advertisers a “user-specific advertising billboard”.

Mobile advertising may find itself overtaken by a more sophisticated and subtle “mobile marketing” of targeted promotions dependent on user profile, behaviour, location and context. Initial results point to incremental revenues, (not the huge revenues we tend to associate with mass-market advertising), but also, reduced churn as subscribers take up this “curated experience” as a discovery mechanism for new plans and new content.

It is probably not worth rushing out to dust off that old hockey stick just yet, but it certainly is progress.

This blog was published by Mobile Marketer on July 09 Click Here, Mobile Commerce Daily on July 09 Click Here and Luxury Daily on July 09 Click Here