Upwardly Mobile
I forgot my mobile yesterday morning. It brought home to me something I already knew: I’m lost without it. It’s no wonder then that smart marketers are targeting us through our phones, writes Jon Burke

Mobile marketers use text messages (SMS) and multimedia messages (MMS) to reach consumers on one of the most personal devices we possess, our mobile phones. In fact, there are already more mobile phones in use worldwide than televisions and computers put together and mobile marketing gives the opportunity to get key messages across to every one of these phones. What’s more, mobiles typically have one user, which means they are a powerful channel to deliver highly targeted and relevant information. At a time when we hang up on telemarketers, delete spam and throw direct mail into the bin without opening it, we remain receptive to marketers “texting” us. Welcome to the next frontier in direct marketing.

“The main attraction of mobile marketing is that, unlike direct mail or e-mail, people tend to read the message. Indeed, statistics show that 94 per cent of text messages are usually read within an hour of receipt. When we use our mobiles, we’re in a more intimate, personal mode than when we use our computers - that’s much more task-oriented and these days we tend to ignore or avoid online advertising. With mobiles, people are more likely to notice and engage with the advertising,” says Rafid Mukadam, General Manager of Knowledge Oasis Muscat-based mobile marketing company, Infocomm.

Mukadam goes on to say: “The potential for mobile marketing in Oman is huge, especially as mobile phone penetration is so high – according to the most recent figures it’s more than 95 per cent. What we see here at the moment in terms of marketing possibilities via the mobile phone is very much the tip of the iceberg. Look out for more personalised messages and focused campaigns in the future. It’ll soon be common to receive promotions on your phone – supermarket coupon codes, raffle ticket numbers, that type of thing.”

Continuing further, Mukadam says, “also we’ll be seeing more opt-in campaigns – that’s where the consumer signs up to receive ads or sends a text to a number on an ad to receive more information. This type of campaign gives a sense of personalised communication because the consumer starts the dialogue. Only a one-to-one phone call can better that in terms of personalization. Another thing to watch out for is location based mobile marketing – basically ads are sent to your mobile depending on where you are. This has been introduced very successfully in several countries already.”

Campaigns of the type Mukadam mentions have already been undertaken successfully around the world. In India, for example, telecom operator Hutch India, allows customers to download coupons to their mobiles for two-for-the-price of-one offers at nearly 400 retail outlets. An insurance company in the UK sends customers an SMS five days before a policy expires, warning that they will soon find themselves without cover. The result has been a 20 per cent reduction in churn.

Location, location, location
The location-based advertising that Mukadam mentions is gaining popularity in Asia in particular. When mobile customers of StarHub, Singapore’s second largest telecom operator, enter a mall, their mobiles alert them to special discounts in stores and restaurants. This location-based advertising service helps businesses generate almost immediate sales by pushing specific marketing or promotional SMS messages to a customer who is near a participating shop. StarHub feel the messages translate to heightened brand awareness, better response actions and even increased market share.

A similar initiative was tested by another Singapore operator, M1 using 1,000 volunteer customers in the popular shopping area of Orchard Road. Indeed, M1 claims that attracted by the discounts, mobile users rushed to sign up for the scheme. Marketers at Massachusetts’ CambridgeSide Galleria Mall have also tried an opt-in mobile marketing scheme to bring in the shoppers.

The phone numbers of nearly 2,000 customers were collected and over a six-month period, they received 39 discount offers from 19 tenants via SMS. Shoppers then showed their phones at the mall’s information desk to receive vouchers to redeem in stores. According to a Mall spokeperson, an amazing 80 per cent of all the text vouchers were converted. “The tenants that participated all saw a jump in their sales,” he says.

Other innovations are also being tested. Singapore’s M1 has launched an opt-in service whereby text messages are scanned for keywords, and the user is sent a relevant 10-second ad. For example, a text about a restaurant would prompt an advertiser’s display of a recipe or restaurant special offers. Another trail by M1 involved volunteers photographing barcodes on advertising billboards with their phones if they wanted to know more about a product or offer. The phone’s browser then connected them to the advertiser’s website.

These marketing experiments are all voluntary: operating licences generally bar the release of personal user data or delivering advertising without the consumer’s consent. Their strength is that the users who sign up signal their interest and willigness to participate meaning that the messages and incentives sent tend to have a high success rate.

UK firm Blyk has taken the opt-in idea one step further. Blyk is a network with a difference – it is funded by advertising. It gives 16 - 24 year-olds free mobile texts and calls in return for receiving around six mobile marketing messages a day. When signing up for the service users give Blyk details of their hobbies and habits – giving potential advertisers the opportunity to focus messages. Among Blyk’s target group the idea has proved attractive, and reached its goal of 100,000 users six months ahead of plan. To illustrate the point, in a recent Blyk campaign to promote a new novel, 67 per cent of the Blyk subscribers targeted responded to a text offering a 90-second audio download of the book’s opening chapter. Of these, 51 per cent downloaded the clip. Those that were not interested were pointed to the publisher’s website, where they could browse other novels.

“It’s a great idea. Young people are very open to the idea of receiving advertising – as long as it has something to say to them that is relevant and of interest,” comments Mukadam.

“It certainly makes sense for Blyk to target the youth audience who are used to technology, do more with their phone and are receptive to ads, but age doesn’t have to be an issue as long as advertisers get their incentives right in terms of the target audience. On top of that, as the market develops, advertisers will be looking to keep consumers engaged – and they will venture beyond text-based advertising to incorporate multimedia formats: video clips, web pages, and music and game downloads. 3G will of course be central to this,” the Infocomm GM suggests.

Take Off
Without doubt the arrival of 3G is instrumental in changing the face of mobile marketing. “There really is a vibe in Oman that now is the time for mobile marketing,” says Rehan Moosa, Infocomm’s Assistant Sales and Marketing Manager.

Clearly motivated by the topic he goes on to say: “There are so many new possibilities with 3G and people are always looking for new platforms for their messages. Mobile penetration here is almost 100 per cent. Just compare that to the number of Internet subscribers. On top of this, as far as big brands are concerned there is a feeling that the market for online advertising is saturated and they’re looking at more personalised and focused options to communicate with customers. They want to reach people who are really interested in what they’ve got to offer. Mobile marketing today is where Internet advertising was about 10 years or so ago - it’s about to take off.”

While analysts cite a variety of impediments to the growth of mobile marketing, marketers themselves feel that possibly the real limiting factor in this area is that not enough work is done to integrate mobile into the overall marketing mix, and advertisers need to ‘think holistically’ when planning their campaigns. “Look at the Muscat Eye Laser campaign,” says Moosa. “They’ve used text messages with great success but their strength is that it forms part of an advertising campaign that has been thought through and combines different media.” His GM agrees: “Mobile is without doubt a personal way to reach consumers who can be incentivised through information services and compelling content, as well as more relevant and targeted messaging. However, the clear difference in the market over the past 12 months has been the embracing of mobile marketing as an integral part of cross-media brand campaigns and it’s now receiving big brand backing from the likes of Coca Cola in markets such as India and China and from McDonald’s and Dunkin’ Donuts in Europe and Asia.”

Industry analyst Gartner has forecast that the market for mobile marketing will surpass $2.7bn this year, up from $1.8bn in 2007. What’s more, ABI Research estimates that mobile marketing will grow to $24bn worldwide in 2013. Certainly Oman seems poised for mobile marketing to take hold in a big way given the phenomenal increase in mobile phone penetration in the sultanate which, according to the Telecommunications Regulatory Authority (TRA) Annual Report 2007, has jumped from 25 per cent to 95 per cent in just 3 years.

This tremendous rate of growth has been higher than in the rest of the region but the degree of penetration is still lower than that of neighbouring countries implying that there is still room for growth in this segment. The TRA report also acknowledges the increasing importance of data traffic with the typical mobile subscriber sending an average of 100 text messages a month – this represents a 16 per cent increase compared to the previous year. With figures like these perhaps mobile marketing could be more aptly named upwardly mobile marketing.

Most current marketing is done through SMS text messaging but with the introduction of 3G phones, picture and audio messaging as well as mobile Internet are becoming increasingly popular.

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