For marketing service providers, the latest killer app isn’t a feature on their cell phones, it’s the ability to communicate with cell phones. E-Dialog’s recent acquisition of M3 Mobile, a mobile marketing company, is a perfect example of this.
“The mobile industry is similar to where e-mail marketing was ten or 12 years ago, and database marketing was 20 or 30 years ago,” said David Daniels, CEO of online marketing advisory firm The Relevancy Group, when considering the likelihood of consolidation.
Worldwide, mobile devices outnumber personal computers on a four-to-one basis, Daniels added. And for once, the United States is lagging the comparatively more mature Asian and European markets for technological adoption.
E-Dialog’s focus on relevancy in its marketing campaigns fits well with the attitude marketers need to bring to their mobile campaigns. “Part of the reason is that there is more price friction, or cost, for consumers,” Daniels said. “With e-mail, the costs have been bundled into our monthly ISP fees. We have done the same thing with mobile, but the cost is much higher in our minds. It is uncharted territory in our minds.”
The push for relevancy – and therefore the perception of higher benefit to offset the perception of higher cost – fits well with e-Dialog’s approach to e-mail marketing. Daniels cited e-Dialog’s relevancy trajectory approach to e-mail as fitting in well with consumer attitudes toward receiving mobile messages. “Basically, it ensures you are doing the right things to the right consumers with the right message at the right time through the right channel.”
Acquisition of these capabilities, as opposed to growing them organically, makes sense. “It takes time to go to market with [in-house generated technology], Daniels said. “And it’s hard to show that you have street credibility overnight by releasing a new widget.” Unlike e-mail marketing, setting up an SMS broadcasting system is very technically complex, he added. “From that point, it makes sense to acquire because of the domain expertise.”
E-Dialog will certainly be keeping that expertise on board. Its full team, including Gary Ackerman, M3’s president and co-founder, will remain with the company, and management will report to John Rizzi, the CEO of e-Dialog.
What do other potential acquisitions in the mobile marketing space look like? The most likely ones, according to Daniels, offer more than “just a tool that pushes out messages to text.
“They should have segmentation and measurement tools, and a database marketing approach to this,” Daniels said. “All the underpinnings of what direct marketing is, but in a different channel. Any company that would be a target would have to have a strong services component. This is a new industry, and any client is going to need a lot of direction and handholding.”
