It won’t be long before rich media web content and wireless hand-held devices converge. Internet usage will become pervasive in new ways, and global electronic-commerce will be literally at our fingertips.
Key in this development is the convergence between mobile communication standards (like GSM) and PDA operating systems (Personal Digital Assistants like MS Windows CE and 3COM’s Palm OS). This will create a new class of devices that can display personal, localized, interactive, rich media messages — any time, any place and anywhere.
Opportunities to deliver interactive, one-to-one marketing messages (mobile marketing) and electronic commerce transaction capability (mobile commerce) into the hand of the user through wireless technology, are expected to be much greater than those on the Internet today.
Many people are already more familiar with and use the telephone more often than the PC. Also mobile phones are not only portable, they are also personal and use a secure smart card that can support the necessary secure identity and value management services.
These key factors fuel the growth of mobile commerce because the new wireless devices are the next point-of-sale (POS) devices. They enable user consumption of a variety of information-based or online-activated products and services. Marketers will have the opportunity to send personalized (one-to-one) interactive messages to the screen of unique users, depending on the time of day, their current location, and their user preferences.
Internet marketing and commerce revenues will look like child’s play compared to the mobile marketing and mobile commerce opportunities to come.
Cell Phone Ubiquity
Internet usage growth depends on PC access, but the cell phone is threatening to overtake the PC in Internet connectivity.
The cellular industry’s growth has been even faster than the Internet’s. Makers of wireless phones sold a record 162.9 million units world-wide last year, a 51 percent increase from 107.8 million units in 1997, according to Dataquest Inc.
Industry sources project growth from today’s estimated 150 million subscribers to 250 million by the year 2000. There are more than 400 mobile networks in more than 140 different countries. Within three years, Logica predicts that 5.1 million Europeans will be spending 2.7 billion per year through mobile services.
Currently there are far more mobile phone users than Internet users throughout Europe. The following chart provides a clear picture of the opportunities to come.
Marketers will love the new opportunities created by the AutoPC. For example, suppose McDonalds has a database that stores customer preferences. Suppose Mr. Smith is driving on the E19 to Paris and is 5 kilometers from the next McDonalds drive-in.
The McDonalds database (GPS) tracks and identifies Mr. Smith as someone who likes Big Macs and does not visit any other McDonalds on the E19. A graphically rich ad is sent to Mr. Smith’s AutoPC display, alerting him to take the next exit for an offer valid only at this McDonalds Drive-in: two Big Macs for the price of one. Mr. Smith accepts the offer, and the discount coupon is automatically downloaded into his AutoPC. Besides the Big Macs, he also orders medium fries and a large coke, paying the bill automatically by credit card before picking up his order. After consuming the two Big Macs, the McDonalds loyalty program automatically uploads Mr. Smith’s MacMiles into his AutoPC for future exchange. Sound like an episode from the Jetsons?
Companies that fail to get ready for the one-to-one marketing paradigm will definitely lose the battle for the customer when mobile marketing and mobile commerce enter our lives.
Unlike Internet marketing and commerce, mobile marketing and commerce will blast-off in Europe first. Why? Because Europe already has a standard digital mobile phone network in place. This digital network has accelerated the acceptance of mobile phones and mobile services. In the US, on the other hand, there are a number of non-compatible mobile phone standards competing for customers.
Here are some examples of what is happening throughout Europe:
- In the UK and The Netherlands, mobiles are used to deliver information services to consumers, services that are self-provisioned through a web interface.
- In Spain, mobile and banking networks are linked so that when a customer uses an ATM, their account balance is automatically sent to their handset.
- In Finland, mobile handsets are used to buy goods from vending machines.
- In Portugal, bank customers can use mobile phones to perform bill payment functions they previously had to perform at ATMs.
- In Germany, mobile phones are used for secure log on to home banking services.
Companies like Nokia are looking at ways to create mobile advertising networks like DoubleClick for the Internet. With advanced ad server software and technology for mobile phones, telecommunication companies will be able to target users based on profiles and preferences. This will result in new ways to communicate and interact with brands.
Those who want to grab these new opportunities will have to change their mind-set toward thinking permission (as in Seth Godin) and precision. Mobile phones and PDAs are personal devices by nature. Mobile marketing, in essence, will be about inviting your customers and asking their permission to build a profile in return for relevant services. Only then can marketers retain their customers and build a mutually beneficial relationship.
Mobile marketing will also present new challenges for the creative professionals responsible for concept and content creation. Mobile content will have to be personal and precise, leaving out any information that is not relevant. Marketers will have less space to communicate the benefits of their products and services. A new “art of micro marketing” will be born. Commercial messages will bear many similarities to the current marketing formats used in banner and button advertising on the Internet.
Combining access, mobility and personalization will bring a new dimension to the field of interactive marketing. Mobile marketing and commerce companies will be able to provide services any time, any place, anywhere on any device.
Like in the early days of Internet commerce, mobile marketing and commerce will have a large impact on such industries as financial services, travel, publishing and telecommunications. New entrants will provide customers with more access to services and more personal services. Competition will be a matter of providing the right service, at the right place and at the right time.