With the advent of all new media, advertising and sponsorship have always played a part. It took radio 20 years to find a profitable business model, and as my grandfather used to say World War I played a big part. Years after the mass-market embrace of the Internet, companies are still struggling with the collapse of the online advertising market and the collective expectation of goods and services for free. Wireless carriers in the United States need to take steps today to prepare for the proliferation of mobile advertising, because it will inevitably play a significant sponsorship role in the financing of mobile data services. Those carriers that best understand the potential — and potential pitfalls — of mobile as a marketing medium will be best positioned to take advantage of future revenues.
Mobile marketing is coming along at a time of profound cultural change in American society. People’s relationships with brands are changing; Generation Y consumers are beginning to demonstrate significant buying power; and early adopters are embracing wireless as a symbol of their lifestyle choices. Understanding this cultural context is critical as carriers, agencies, and advertisers begin to explore mobile marketing.
In contrast to the wired Internet, which was fostered by an antiregulatory stance and nurtured by national governmental agencies, the mobile Internet faces an uphill battle for ubiquity. With the recent backlash against operator investment in spectrum, it’s time for re-examining existing subscriber relationships and data as an incremental revenue stream. The stakes have never been higher: Customer acquisition costs approach $400 per subscriber across the board, prepaid plans are becoming more prevalent, and the general public is highly suspect of new technology claims. There are only approximately 4.4 million wireless Web and messaging subscribers in the United States today, according to Cahners In-Stat Group, but this figure is expected to grow to approximately 71.1 million in 2005.
As this growth occurs, wireless carriers need to develop the potential of data as an incremental revenue stream. The dollars spent today on wireless data will increase substantially if critical information is delivered with sensitivity to time and context. Today, advertising and branding campaigns can be integrated into the context of premium entertainment services, stimulating data usage and encouraging immediate transactions for personalized services.
Any meaningful long-term marketing relationship in the mobile space must take into account relevance to the end user. Permission-based marketing campaigns must allow for cultural and geographical nuances, including a traditional resistance to “push” services. In a global culture increasingly saturated by media of all kinds, the most powerful messages can be communicated through implicit trust and exchange of value. Carriers’ core billing relationships with subscribers are an incredibly valuable asset that holds great potential for growing mutually profitable relationships well into the future. Trials across the world have shown subscribers will willingly opt in for value-added services and are highly likely to respond to multiplayer competitions and branded promotions.
Ironically, while multimedia advertising pervades nearly every aspect of daily life, integrated megamedia campaigns incorporating print, TV, Internet, and the mobile channel can be the most effective. If a marketing message (slogan, logo, or jingle) is personalized and delivered at a point of impulse in a context where payment is convenient and secure, carriers may begin to recoup their investment in spectrum and infrastructure within the next decade. The key for carriers and ad agencies looking to capitalize on the mobile channel is to remember that subscribers can disengage and embrace competitors’ products or services at any particular instant of inconvenience or abuse. Mobile marketing must cater to subscribers’ individual preferences and lifestyles; it holds the promise to deliver compelling value for the coveted one-to-one relationship.
Timely and Personal
This emphasis on the personal relationship with the subscriber is crucial; time-conscious and event-driven campaigns can drive sales of myriad products and services. In fact, Finnish teenagers spend more money on mobile communications through short message service (SMS) than they spend on clothing. (Full disclosure: I’ve been to Helsinki and don’t doubt this one bit.) Context is key, and with the advent of location-based technology the opportunity to drive offline purchases at a given point in time becomes palpable. Again, the emphasis should center on delivering value to each individual subscriber. Digital coupons can facilitate the institution of the impulse buy; preselected and relevant coupons may very well encourage opt-in for long-term loyalty programs. Instant feedback on marketing messages becomes an extremely valuable asset. Today, the mobile channel is radically altering communications across multiple sections of society, with far-reaching implications for an emerging global culture — which is being fashioned largely by an emergent youth market.
Next time: Generation Y Leads the Way