Marketing to Go
The appeal of mobile devices for marketers is unquestionable. They’re everywhere; they’re personalized to one person and so (in theory) highly targetable; and they’re becoming capable of higher functions all the time.
According to estimates from marketing research firm eMarketer, total U.S. mobile advertising spending will reach $1.7 billion this year, up from $878 million in 2007, and should hit $6.5 billion by 2012. While that will be only a fraction of the $1 billion spent worldwide on mobile marketing four years from now, U.S. mobile will be important beyond its dollar amount because the nation’s economy is so highly interactive and offers so many chances for cross-media promotions.
In the U.S. right now it all begins with text messaging, something more than 137.7 million U.S. users do every month, according to stats from Nielsen Mobile. Earlier this year Hearst Magazines Digital Media struck a deal with mobile service ShopText to let readers of its magazines, including Cosmopolitan, CosmoGirl and Seventeen, use their mobile phones to buy products, request samples or enter sweepstakes they see advertised in the magazines.
“We started offering the service about two years ago, at a time when I was starting to see how many girls were just in love with their cell phones,” says CosmoGirl editor in chief Susan Schulz. “They were literally sleeping with them, using them as an alarm clock. They became a fashion accessory.” Users register for a ShopText account and then can text in a short code to take part in sweepstakes or order products, if their account is linked to a credit card.
One item that can overcome mobile ad resistance is a coupon, according to a September study from ABI Research. That survey found that one-third of U.S. consumers who got text-message ads were more likely to respond if they also received an incentive, such as a coupon, free ringtone or music.
But big-name brands are paying attention to mobile coupons, too. In June Coupons.com announced a deal to put its coupons on the Yahoo Mobile service and offered its platform free to marketers for the next year. And rival coupon distributor Cellfire launched two marquee tests earlier this year: one with a regional McDonald’s market in Utah, and one that would let Kroger grocery shoppers browse for coupons on their phones, choose the ones they want to redeem and have the discounts linked to their loyalty cards at checkout.
Mobile advergames offer another opportunity for promotion. Agency AKQA and the dotMobi consortium found in June 2008 that 22% of respondents in the U.S. and the U.K. reported playing a game on their mobile handsets. But other research suggests that relatively few users — 3.4% — downloaded a game to their phones; most people prefer to play games already loaded at purchase or to “sideload” games from their PCs.
That may create opportunities for ad-supported mobile games to cut the costs to consumers, but questions remain. Engaging mobile games are costly to produce, and many publishers offering advergames branded by names like Suzuki, Jeep and, most recently, Burger King still charge for the products, either as a flat purchase or as a subscription. In the case of the BK City mobile game, users pay $2.99 a month for access to the games, marketed with in-store signage at the April 2008 launch.
Ad-supported models may also figure in mobile’s future as a way to defray the cost of higher wireless functions like video. Google is currently testing display ads on YouTube Mobile. And last month MTV Mobile began running pre-roll video ads for the U.S. Air Force on the programming it offers over several wireless carriers’ video-on-demand platforms.
SNAPSHOT
Targeted mobile ads in 2008 valued at less than $1 billion worldwide
Entertainment offers dominate in mobile marketing (44%), followed by food and beverage (21%) and beauty/personal care (15%)
Active users of mobile social networks will go from 54 million today to 730 million by 2013
