Outlook 2005: Moving DM From the Computer Screen to the Third Screen

After years of speculation about mobile marketing as a viable media channel, it finally has arrived thanks to a gaggle of mobile innovations, technology and service providers. Consumer software applications, text messaging, ring tones, games, secure transaction processing and even 3D graphics and streaming video are a reality on cell phones.

The acceptance of mobile phone technology has elevated the cell phone from a voice communication device to a personal information source. The latest technologies render endless possibilities for mobile marketing. The mobile channel represents the birth of the newest advertising medium.

However, mobile marketing did not appear overnight. It has been said the mobile channel is a direct result of the Internet, but they are not the same. Mobile marketers stand on the Internet’s shoulders, but mobile is different and has evolved into a unique marketing channel with differences and advantages over other media channels.

Unlike the early days of the Internet when the only users were early adopters, cell phone adoption is at a mature stage. The Cellular Telecommunications & Internet Association counts 169 million wireless subscribers from all walks of life.

More U.S. households have access to a cell phone than to the Internet. Internet connections in the United States have surpassed 100 million, with an estimated 600 million worldwide. By contrast, there are 1.4 billion cell phone subscribers worldwide. The global wireless market is expected to add an average of 186 million new subscribers yearly, according to In-Stat/MDR, topping 2 billion by 2007.

The medium’s growth has spurred many icons of Internet advertising to make the leap to mobile. These interactive advertising leaders see the same features touted by the Internet at its inception: the digital format, interactivity, pervasiveness and worldwide reach. Mobile is taking interactive to the next level.

The cell phone is direct and pervasive. Though many Internet users have four or five e-mail addresses, most cell phone users have only one phone number. This translates to direct consumer access at any given time.

Two main models exist for marketers to reach consumers through the mobile channel: mobile media buying and Short Message Service, otherwise known as text messaging.

An interactive mobile media buy lets marketers reach consumers while they use their cell phones to access Wireless Application Protocol sites, play games or view video. Beware the seller who offers opt-in SMS lists. Mobile spam will damage a brand’s reputation and turn off an otherwise enjoyable consumer experience.

Successful mobile marketing is achieved by combining the two solutions, mobile media buying with follow-on SMS. Similar to the Internet, marketers can buy targeted interactive inventory in sports, youth, entertainment and business content.

More than 40 percent of the nearly 170 million cell phones in the United States have these capabilities, with tens of millions of impressions in targetable inventory.

Combined with targeting and optimization technologies similar to those of the Internet, and armed with the ability to geo-target to a consumer on the go, marketers can reach an unparalleled level of demographic insight, creating a multitude of options. As a result of these media buys, the marketer builds its own opt-in list as consumers respond to offers within the mobile content. SMS is the second stage of the overall campaign. As a marketer’s m-opt-in (mobile opt-in) list grows, SMS marketing is the ideal follow-on solution.

Another option for mobile marketing is the use of short codes. These are five-digit codes, approved by all major U.S. wireless carriers, that can be placed in traditional media. They are similar to toll-free numbers and URLs as a direct response tool for consumers. Consumers type the code, along with a keyword identifying the campaign, into their text messaging interface and receive an SMS response. This model can be used for voting and contests, and it offers an interactive solution for offline media such as print, broadcast, radio and outdoor.

The mobile channel brings about new lessons, techniques, tools and technologies to advertisers and marketers focused on direct response: Mobile is portable and therefore better for reaching active-lifestyle consumers; mobile can reach consumers while they are immersed in an event like a concert, trade show or sports, providing true “proximity marketing’; mobile is a better means in which to cross media market (i.e., text-to-vote, text-to-win backstage passes); and mobile requires all marketing initiatives to be interactive, yet does not pull the user away from the actual experience.

What’s Next?

With the broad acceptance of mobile content, short codes and text messaging to the marketplace, mobile is becoming an established marketing avenue. Mobile has the potential to become a vital part of almost all marketing mediums, offering interactivity and tracking capabilities never before available for print, broadcast, radio and outdoor.

Forces larger than marketers have fueled mobile’s growth. Wireless carriers invested in infrastructure to support customer desires and needs. The wireless networks support a plethora of interactive bells and whistles, including snapping and sending pictures with camera phones, downloading content such as ring tones, screensavers and wallpaper, sending and receiving text messages and e-mail, viewing WAP and Internet. And with the new high-speed networks, video is streamed at TV quality direct to consumers’ mobile phones.

Mobile advertising will assume a new role in 2005. The biggest change will be the growth of ad-supported mobile content. Today, consumers pay for the content, but as with all other entertainment and information media, they expect “free” or ad-supported access to this type of content.

CNN recently launched the first mobile news service to be supported entirely by an advertiser, Xerox. Dow Jones & Co., however, is sticking with its paid subscription model and charging $3.99 a month for The Wall Street Journal Mobile. It may add advertisers as the subscription base builds.

With the introduction of mobile ad serving technology, organized mobile content networks and mobile media planning tools, content providers are now prepared to provide marketers with highly targetable and accountable opportunities.

Though the mobile channel is still in its infancy, it has proven remarkable for marketers. As consumers continue to embrace mobile phone content, marketers will have more tools to reach consumers in new ways.

Tom Burgess is founder and CEO of ThirdScreen Media, Waltham, MA, a provider of mobile media management services. E-mail him at [email protected]

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