Mobile Marketing: Is It Really the Next Big Thing?

You’ve probably read recently that mobile marketing is next big thing. More than one executive, seeing the cell phone as the key to a portable, omnipresent one-to-one relationship, has called it the “most powerful marketing tool in history.” That day may come, but make no mistake: We’re not there yet–not even close.

With consultancy Deloitte & Touche predicting close to 2 billion wireless users worldwide by year’s end, the medium’s potential is not the issue. But the fact is, most consumers still use mobile phones primarily for simple voice calls. Mobile users who carry their phones with them at all times may be in the majority, but those who regularly use the text and picture messaging, e-mail, and content download features on their handsets are in the minority. The addressable audience is not as big as it seems.

For starters, even consumers who use the messaging functions on their phone are likely to view text-message-based ads as intrusive. Yankelovich’s consumer trends monitor reveals that a significant percentage of consumers already feel constantly bombarded by advertising. This begs the question why they would consent to receiving marketing messages on their phones—messages they help to subsidize through SMS and MMS fees paid to their wireless carriers. JupiterResearch analyst Niki Scevak calls the cell phone “a wonderful response mechanism” but cautions that its personal nature “makes it a very poor delivery mechanism for advertising.”

Then, too, with a vast array of handsets available and take-up rates of mobile video and Java technology still low, marketers face hurdles that go beyond consumer willingness to accept their pitches. After all, there is only so much information you can convey in a basic text message.

And until major brands commit significant resources to the medium, it is difficult to imagine wireless as a channel that millions will tune into. Most leading advertisers are still sitting on the sidelines, waiting for someone else to make the first move. Undoubtedly, many are cautious of embracing unproven technology, but they would do well to remember that online advertising, once the subject merely of hype, is now integral to most companies’ marketing and sales strategies. If wireless is going to be the next frontier, some amount of experimentation will be necessary, and the environment cannot help but be hit-or-miss at the outset.

Yes, mobile marketing is coming of age, but for now it is a medium that is riding on its potential, not proven success. Consumers, wireless carriers, and advertisers all will have to do their parts if this situation is going to change. Consumers’ phone usage will have to evolve beyond voice.

Carriers can encourage a change in habits by offering promotions and more-attractive pricing on premium nonvoice applications such as MMS and mobile TV, which are better conduits for rich marketing messages. But they should take care to perfect basic communication functions before asking subscribers to pony up more money for premium services, says Elkin. Bad experiences with dropped calls are likely to leave consumers skeptical of the quality of more-advanced applications.

During the next few years, bandwidth and handset limitations gradually will ease, opening the door for TV-style sponsored audio and video streams. Advertisers must exercise patience as the mobile channel evolves. It may become a highly effective means to reach, acquire, and retain customers, but that day still lies ahead.

For now, two things are certain: Regardless of hype, mobile marketing is not going to be an instant cash cow, and like the Internet, it is here to stay.

Noah Elkin is a senior analyst at eMarketer, a New York-based market research firm. He will be writing “Mobile Marketing Brieflets,” a regular column.