Opportunities in Mobile Marketing & Advertising 2008-2009

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CT · 203-325-8193 · www. Mobile Phone Market Share _____________________________6 Table 1.1: U.S. Online Video Advertising Viewers ________________________10 Table 1.com. Copying Prohibited.2: Interest in Mobile Marketing Among U.S. Stamford.S.Table of Contents Table of Contents ________________________________________ i Methodology ____________________________________________v Executive Summary _____________________________________ 1 Chapter 1: Overview of the Mobile Marketing Business __________ 5 Introduction ______________________________________________________5 Mobile Advertising _________________________________________________7 Where the Mobile Ads Go _______________________________________________ 8 Enabling a Critical Mass _____________________________________________8 Potential Market Size ______________________________________________10 Background of Mobile Marketing Services ______________________________11 Audience Demographics____________________________________________12 Where Ads Are Going Now__________________________________________12 Table 1. i . Mobile Phone Users _______9 Table 1.simbainformation.3: U.4: Global Mobile Advertising Spending by Format _________________10 ©2008 Simba Information.

Opportunities in Mobile Marketing & Advertising 2008-2009 Table of Contents Table 1.5: Interest Among U. ii .6: Top Mobile Web Destinations by Ad Impressions Served __________12 Chapter 2: U. Off-Deck Content ______________________________________18 Handset Equipment Suppliers _______________________________________18 Ad Networks_____________________________________________________19 The Role of Mobile Advertising_______________________________________21 Mobile Performance ___________________________________________________ 21 Outlook for Mobile Industry Structure _________________________________21 Table 2. Industry Structure _________________________ 13 Introduction _____________________________________________________13 Wireless Carriers _________________________________________________14 Carriers Role vis-à-vis Advertising _______________________________________ 15 Competitive Environment ______________________________________________ 15 Carrier Outlook ______________________________________________________ 16 Content Creators and Aggregators ___________________________________17 Developers and Ad Agencies ____________________________________________ 17 On-Deck vs. Copying Prohibited.com.S.1: Mobile Ad Networks and Their Benefits _______________________20 Table 2.2: Mobile Advertising’s Effect on Consumers’ View of Brands ________22 Chapter 3: Technology and Implementation _________________ 23 Introduction _____________________________________________________23 Marketing Formats____________________________________________________ 24 Transmission Technologies _________________________________________24 WAP: Wireless Application Protocol _______________________________________ 24 Third Generation (3G) _________________________________________________ 25 Operating Systems ___________________________________________________ 25 Text Messaging and SMS Codes _________________________________________ 25 SMS Outlook ________________________________________________________ 26 ©2008 Simba Information.S.simbainformation. Stamford. Teen Mobile Phone Users in Receiving Mobile Advertising in Exchange for Incentives________________________11 Table 1. CT · 203-325-8193 · www.

5: Use of Mobile Data Services ________________________________38 Table 5. Copying Prohibited.6: Mobile Analytics Vendors __________________________________40 Table 5.3: Mobile Data and Communications Activities ____________________36 Table 5. 2008-2012P ______________32 Chapter 5: Usage Patterns.4: Mobile Web Usage by Age _________________________________37 Table 5. CT · 203-325-8193 · www.2: Reliance on Mobile Devices.com.Opportunities in Mobile Marketing & Advertising 2008-2009 Table of Contents Click-Through Rates_______________________________________________27 Future Technologies_______________________________________________27 QR and Other Scanning Technologies _____________________________________ 28 Chapter 4: Growth of Products and Services _________________ 29 Mobile Marketing for Diverse Products: Growth _________________________29 Search and Location-Based Services __________________________________31 Search via Mobile Platforms ____________________________________________ 31 Location-Based Services _______________________________________________ 32 Pioneering Location-Based Services ______________________________________ 33 Geographic Positioning System (GPS) and Mobile Commerce _______________33 Table 4.7: Mobile Ad Recall by Age Segment. Q2 2008 ___________________40 ©2008 Simba Information.1: Mobile Content Usage_____________________________________35 Table 5. Select European Nations ________________________________________________30 Table 4. Stamford. iii .1: SMS Advertising Audience and Response Rates.2: Global Location-Based Service Users. 2002-2007 _______________________36 Table 5. Measurement & Analytics __________ 35 Usage Patterns___________________________________________________35 Tween Usage ________________________________________________________ 37 Steady Choices ______________________________________________________ 38 Measurement and Analytics _________________________________________39 Young Users’ View of Mobile Marketing____________________________________ 40 Table 5.simbainformation.

com. iv . Mobile UGC Revenue __________________43 Chapter 7: Policy Considerations __________________________ 45 Introduction _____________________________________________________45 Impact of FTC and Other Regulatory Restrictions ________________________47 Spectrum Usage__________________________________________________47 Privacy and Security ______________________________________________48 Future Developments______________________________________________48 Industry Response and Best Practices _________________________________49 Chapter 8: Case Histories of Mobile Marketing ________________ 51 Introduction _____________________________________________________51 Obama for President 2008: “Celling of the President”_____________________51 Nokia: A Manufacturer Supports Services ______________________________54 Kinetic Mobile: A Focused Ad Agency _________________________________56 Hyundai Motor America: Integrating Mobile Into Launch Campaign __________58 Table 8.1: Estimated Cost of Obama Text Messaging Campaigns____________53 Chapter 9: More Examples of Mobile Marketing Projects and Experiments __________________________________________ 61 Chapter 10: Conclusions _________________________________ 65 ©2008 Simba Information. CT · 203-325-8193 · www.1: Comparative Estimates.simbainformation. Copying Prohibited. Stamford.Opportunities in Mobile Marketing & Advertising 2008-2009 Table of Contents Chapter 6: Social Media and User-Generated Content __________ 41 Introduction _____________________________________________________41 Social Networks __________________________________________________41 Carrier Opportunity: Buying In (European Examples) ________________________ 42 Bringing Ads to Mobile UGC _________________________________________43 Table 6.

Copying Prohibited. However. This report focuses on the mobile marketing services delivered to handsets. where possible. Simba conducted interviews with executives and managers in all categories of the mobile marketing industry. Treo and similar devices) which provide Web access. ©2008 Simba Information. such visions are seasoned with “wishful thinking. Simba acknowledges that portable. BlackBerry.Methodology Enthusiasm about mobile marketing is generally very high. including conventional “cell phones” and the growing base of “smartphones” (such as the Apple iPhone. In addition. v . Inevitably. to devise a “consensus” outlook for the scale and speed of mobile marketing development. Stamford.com. including reviews of predictions from independent and company-sponsored forecasts.simbainformation. This report is based on extensive analyses of companies and organizations in the mobile marketing sector. The research team attended numerous industry conferences and meetings to hear the views of technology vendors. which is more lethargic than the vendors would like.” especially as vendors hope to deploy new services (and generate new revenue) as soon as the audience is enabled. Simba has examined their demonstrations and listened to their views about the progress of mobile marketing deployment. wireless devices (such as laptop computers logged onto wireless networks via venues such as coffee shops and urban WiFienabled locations) provide even more opportunities for mobile marketing. wireless carriers and service providers. CT · 203-325-8193 · www. it includes the focused objectives of companies that sell consumer products and services along with the business goals of technology vendors who hope to participate in a vast new opportunity. Simba has synthesized the forecasts of growth.

relative sizing based on customer observations. Simba uses a broad definition of mobile marketing.simbainformation.” The highly visible “mobile advertising” subset focuses on the delivery of specific marketing messages—especially those with a sales offer and a call to action. general guidance provided by executives (weak. CT · 203-325-8193 · www. Stamford.). portable handset devices.com. ©2008 Simba Information. size of competitors. Methodology for Projecting/Estimating Results When reported information was not available. including the one developed by the Mobile Marketing Association: “The use of wireless media as an integrated content and direct responsive vehicle within a cross media or stand-alone marketing communications program. flat. Copying Prohibited. there is also a process for measurement of concrete results (message delivery and sale).Opportunities in Mobile Marketing & Advertising 2008-2009 Methodology the focus of this report will remain on services aimed at always-on. estimates were developed by Simba Information using the above sources. library-spending studies and searches of online news databases. number of titles. Simba also uses: historical trends. All Simba estimates in this report are marked (E) and all projections are marked (P). etc. vi . as with other advertising.

marketers may take longer to review return-on-investment using this new platform. mobile marketing revenue at about $7 billion in 2012. The global economic turmoil that accelerated in late 2008 has had significant impact on the advertising/media industries and may affect the mobile marketing community in the near-term. the opportunities for mobile marketing are vast. 1 . telecommunications. Diverse technologies. Copying Prohibited. thus delaying major mobile marketing initiatives. and consumer product and services providers. Various forecasts. traditional advertisers may show reluctance to experiment during this economic lull. as analyzed for this report. they will focus on targeted platforms that deliver measurable. Yet even the most enthusiastic providers acknowledge that they are still seeking the best formulae for successful.S. Thousands of mobile marketing projects are under way.simbainformation. population of teenagers and older). ©2008 Simba Information. beyond the initial focus on SMS (short message systems)/text advertisements. Optimistically. future growth is fueled by new applications of “search” and display advertising. actionable messages and transactions. Significantly. financial relationships with wireless telecommunications carriers plus potential regulatory pitfalls add stumbling blocks along the route to mobile marketing success. With the widespread adoption of mobile handsets (by more than 80% of the U. Mobile media perform that function. put total U.com. ongoing mobile marketing operations. CT · 203-325-8193 · www. Alternatively. more than double the level of 2008. it is possible that as marketers seek to optimize their spending.S. Stamford.Executive Summary Marketing via the growing array of wireless personal devices is the dream of technology.

technologies and services.simbainformation. music or other digital content. such as graphic display ads or Short Message Service (SMS) text messages.g.Opportunities in Mobile Marketing & Advertising 2008-2009 Executive Summary On a global basis. mobile marketing is expected to generate $12 billion by 2011. “Mobile marketing” encompasses many applications.com. information and video entertainment. • • • • • “Mobile advertising. Location-based services (LBS). compared with $24 billion for Internet advertising and $450 billion for all advertising. The range of forecasts underscores the difficulty in building a valid revenue model based on today’s limited experience. According to Informa Telecoms & Media. especially for advertising that is connected to a physical transaction (e. eMarketer and ABI Research. a sale or transaction conducted via the handset. at a store).) The U. share of that worldwide boom will be about 20% to 30%.” the most visible segment of the mobile marketing world today. Despite the uncomfortably wide range of expectations. Point-of-sale support. which amplifies the value of Internet searching to steer mobile users to a service or product provider. Mobile commerce (m-commerce).S. including: • Advertising delivered to a mobile phone handset. (The 2011-2013 figures are estimates and projections from Gartner. these providers work in collaboration with product/service vendors to integrate marketing and advertising into the mobile content. 2 . Search-based marketing. accounts for barely 2% of all advertising expenditures. CT · 203-325-8193 · www. presumably ones that are nearby. respectively. including downloading of ringtones. 2006 saw $871 million spent worldwide on mobile advertising. Copying Prohibited. The consistent bullish expectations encourage companies to find the “correct” way to build this potential opportunity. ©2008 Simba Information. such as music. Stamford. which (using geographic positioning data) can alert phone users to the proximity of a product or service (such as restaurant or specialty store). $19 billion by 2012 and $24 billion by 2013. depending on which forecaster you believe. Content suppliers. all of the predictions point emphatically upwards.

e. Regulatory.com. legal and standards organizations: In the U.simbainformation. each having their own objectives in this collaborative business. Handset suppliers: Equipment manufacturers. Stamford. the Federal Trade Commission and the Federal Communications Commission have looked at practices and abuses in the mobile marketing environment. The growing popularity of smartphones. Audiences: Young audiences—the so-called “Generation M” (Mobile Generation)—are the primary target of many mobile marketing efforts.S. Nokia. Sales of movie and concert tickets have been among the most widespread uses of mobile advertising. Research In Motion. about 30% of this age cadre has no wireline phone connection).. Copying Prohibited. open new opportunities for mobile marketing. CT · 203-325-8193 · www. rely on mobile communications. automakers. entertainment companies and a new breed of advertising agencies are among the most actively involved in mobile marketing. hence they seek to encourage applications (such as advertising and marketing) that support more usage (although they are concerned about overburdening their wireless networks which would require them to invest in additional costly infrastructure). 3 . They operate the networks and generate revenue through usage of “air time”. These consumers. mostly under age 30. Motorola. AT&T Wireless.S. Rules that govern other telecommunications plus privacy/security and pricing appear to apply to mobile marketing. which offer greater graphics and video capabilities. • Wireless telecommunications carriers: In the U. the largest carriers are Verizon Wireless. LG.Opportunities in Mobile Marketing & Advertising 2008-2009 Executive Summary The mobile marketing community includes several intertwined but independent categories of providers. often as their only phone device (i. such as Apple. Samsung.. Their devices fit the requirements of the carriers on whose networks they are used. • • • • Each of these industry participants plays a role in shaping the scale and development of mobile marketing. Sony-Ericsson and many other companies that supply personal receivers. Sprint and T-Mobile. ©2008 Simba Information. Marketers and advertising agencies: Consumer products companies.

CT · 203-325-8193 · www. Stamford.simbainformation.com.Opportunities in Mobile Marketing & Advertising 2008-2009 Executive Summary This page intentionally left blank ©2008 Simba Information. 4 . Copying Prohibited.

com.simbainformation. reception devices and processes to deliver appropriate marketing messages to individual users—either pushed to users through the systems or pulled (on demand) by the user. Location sensitivity. Active engagement with users (instant feedback). Stamford. and Rich-media enabled. Initially. Mobile marketing encompasses services that are contextually relevant. Personal and social media enabled. Copying Prohibited. although elaborate plans are under way to enable targeted video and enhanced services via mobile handsets.Chapter 1 Overview of the Mobile Marketing Business Introduction The mobile marketing ecosystem includes the technical infrastructure. 5 . Marketing via mobile platforms has attracted a wide array of industry interest because of several important attributes and capabilities: • • • • • Always on. the major application has been delivery of text messages from a brand. Applications include: ©2008 Simba Information. CT · 203-325-8193 · www.

February 2008. when that merger is completed. Federal Communications Commission. Table 1. and Search: the user seeks a specific product or service. Barriers include the restrictions (such as technology limitations) imposed by the oligopoly of U.S.simbainformation. a standard for sending images. As devices become more robust and include more features. which collectively control more than half of the U. Stamford. Copying Prohibited. audio. ©2008 Simba Information. Verizon will have about 70 million customers). CT · 203-325-8193 · www.com. Verizon is acquiring Alltel. 59 million for Verizon Wireless.S.S. the potential for mobile marketing will grow. text messages. Mobile Phone Market Share T-Mobile 11% Alltel* 5% Other 9% AT&T Wireless 27% Sprint Nextel 22% Verizon Wireless* 26% *Verizon is merging with Alltel Source: Annual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services. photos and longer messages using the WAP (Wireless Application Protocol) standard—the de-facto world standard for the presentation and delivery of wireless information and voice services on wireless handsets and other devices—used to deliver ringtones. Call backs.e. wireless carriers. video.1: U.Opportunities in Mobile Marketing & Advertising 2008-2009 Overview of the Mobile Marketing Business • • • • • Short Message Service (SMS). dominated by Verizon Wireless and AT&T Wireless. i. 6 . another wireless carrier. wireless market (about 61 million customers for AT&T Wireless. Web browsing via enhanced handsets and smartphones. Multimedia Messaging Service (MMS).

Others see mobile advertising in a more holistic way: as a means for providing value to customers by giving them information when. Two important behavior trends are emerging for mobile advertising: • Consumers will accept mobile advertising if they receive value in exchange. It may be promotionally related and it is using the Web browser as a mobile marketing platform. LTE (Long Term Evolution. CT · 203-325-8193 · www. 7 . Stamford. • These two trends are helping to define the line between content and advertising—a line that is increasingly blurred. free airtime or other discounts in exchange for seconds of attention. but it is content. A click on a particular icon in the advertisement opens a browser window with Pizza Hut nutritional statistics on healthy eating and its menu. carrier decisions about the use of new technologies. Some industry leaders view mobile advertising as transferring the Internet vision of pay-per-click to a new platform. another advanced wireless technology) and other platforms deter marketing initiatives. such as 3G and 4G (third and fourth generation wireless formats). The incentives include free content. This is mobile advertising. Similarly. The search will be sponsored by Pizza Hut. The consumer drives the content and context of the message. ©2008 Simba Information.com. Mobile Advertising Mobile advertising is one component—arguably the most visible one—in the mobile marketing ecosystem. the line between mobile advertising and mobile marketing will blur. Advertisers and marketers must weigh the value of reaching immediate markets with today’s technology against the risk of investing in next-generation applications with no guarantee of when such services will be available and widely embraced by potential customers. This is content. Moreover. where and how they want it and via the device they choose.Opportunities in Mobile Marketing & Advertising 2008-2009 Overview of the Mobile Marketing Business The carriers' policies—such as a recent Verizon Wireless plan to charge for text messages—ripple through the mobile marketing business. to be relevant to them. Copying Prohibited. Consumers want value for their attention—they want the content whether it be video. This is an application of mobile marketing. coupons or advertising.simbainformation. To illustrate: consumers will use the mobile Web to search for a pizza restaurant in their vicinity.

Nokia and Samsung. BlackBerry and Treo. YouTube and mobile Web. the new “G Phone” devices using Google’s Android software.S.com. One positive factor about the future of mobile marketing is the growth of the installed base of Web-enabled mobile devices—either enhanced “standard” phones or full “smartphones. voting and purchase/transactions. by 2010. i. Motorola. subscribers who paid for mobile Internet access jumped by 28% (74 million to 94 million) from the first quarter to the second quarter of 2008. a smartphone. About 19% of mobile consumers now use a smartphone.” such as the Apple iPhone. The best prospects for interactive mobile marketing stem from growing deployment of mobile Web services. according to Nielsen research. allowing TV-like commercials (either original creations or adapted from a broadcast TV campaign) to be delivered to a handset. Copying Prohibited.e. there were about 40 million active mobile Internet users in the U. 8 .S. As of May 2008. which rely on smartphones.simbainformation. according to a November 2008 study by The Kelsey Group. familiar online services delivered via a small-screen wireless device.S. SMS and MMS: This category includes ad messages that can be delivered by the various messaging formats.. mobile device users. according to Nielsen Mobile. These simple messages allow brands and companies to deliver their content and connect with consumers through surveys. The number of U. which also found that: ©2008 Simba Information. Mobile video ads: This category is a blend of television. CT · 203-325-8193 · www. as well as products from LG. sweepstakes.Opportunities in Mobile Marketing & Advertising 2008-2009 Overview of the Mobile Marketing Business Where the Mobile Ads Go • Message: Text. Nearly 50% of other mobile phone users plan to buy an advanced mobile device. Mobile Web: This category offers mobile Web browsing (search and banner ads). • • • Enabling a Critical Mass About 80% of Americans over the age of 12 have a mobile phone or smartphone. Downloadable Applications: These range from ordering ringtones or movie tickets to delivery of games. That is just under 25% of all U. Stamford.

Copying Prohibited. For example. Stamford.Opportunities in Mobile Marketing & Advertising 2008-2009 Overview of the Mobile Marketing Business • 60% of mobile data users are “more likely than average” to find mobile advertising acceptable. 23% of mobile data users expect to see more mobile advertising. CT · 203-325-8193 · www. For example. an eMarketer study identified a great and growing appetite for Table 1.simbainformation.2: Interest in Mobile Marketing Among U.com.S. Beyond the seeming contradictions of the Nielsen and Synovate forecasts are more studies that demonstrate the complexity of choices facing the mobile marketing industry. about threequarters of mobile phone users said they are “not interested” in mobile marketing. • • • Other surveys have generated widely divergent—often contradictory—results. 25% of mobile Internet users recall seeing some form of advertising while using the mobile Web. Synovate. Mobile Phone Users (on a 10-point scale) Highly Interested (8-10) Moderately Interested (5-7) 2005 2006 2007 Not Interested (1-4) 0% 20% 40% 60% 80% Source: Synovate “Mobile Attitude and Usage Study” for Mobile Marketing Association ©2008 Simba Information. Indeed. during three consecutive years. in a longitudinal study it has conducted for the Mobile Marketing Association for several years. and 32% are open to mobile ads if they lower wireless bills. 9 . has identified very slight changes in Americans’ appetites for mobile marketing.

3 $15. Hence a conundrum is developing of whether 2009 144.3: U.3 $11.2 2011 $12. August 2008 (typically smaller than 5 inches.S.2 3.000.4 0. Nonetheless.000 service/signals. especially younger audiences.000.3 0.2 1. The barriers for mobile video 2011 165.000 from their desktops (or laptops) to the handheld mobile device. Copying Prohibited. Online Video Advertising Viewers # of Viewers online video advertising.000. Thanks to a continuing influx of new technologies and applications.8 $19.000 viewers will extend their appetite for video ads 2010 155. The eMarketer forecast (Table 1. are very comfortable with the miniature displays. the value (and appeal) of mobile video advertising may be greater than current expectations suggest (see Table 1. While some skeptics deem that 2013 183. Stamford.000.4: Global Mobile Advertising Spending by Format ($ in billions) 2009 Mobile messaging Mobile display Mobile search Total Source: eMarketer. If consumers are turning to mobile handsets for more of their online experiences.000. March 2008 $6.4) for global mobile advertising typifies the expansion of Table 1.9 2.simbainformation.000 advertising include cost and vitality of 2012 175.2 ©2008 Simba Information.6 1.2).2 2012 $14.000 the relatively small screens of handheld devices Source: eMarketer. and the restrictions it forces upon marketing content.4 0.4 2010 $9.000 Potential Market Size The various segments of the emerging mobile marketing category will grow at significantly different rates.Opportunities in Mobile Marketing & Advertising 2008-2009 Overview of the Mobile Marketing Business Table 1.6 $7. the actual growth rate may shift during the coming spurt. often less than 2 inches) are not conducive to videos—either advertising or other content—in fact many mobile users. 2008 130.000. CT · 203-325-8193 · www. 10 . screen size.com.0 0. may deter some marketers from embracing mobile video presentations.

Table 1. among others.S. 11 . and an estimated $52.5 billion in worldwide revenue in 2006. Starting from a much bigger base.5 billion in 2007. Display and search will grow. Today. broadband capabilities. although they will continue to represent. with the advances of cell phones. threefold and sixfold.7 trillion SMS messages being sent—not all of them for advertising. with 3. September 2008 ©2008 Simba Information. respectively. about one-third of the global mobile advertising market by 2012 (compared to about one-sixth of mobile advertising today). Teen Mobile Phone Users in Receiving Mobile Advertising in Exchange for Incentives 6% 6% 15% Extremely Interested Very Interested Interested Somewhat Interested Not Interested 21% 52% Source: Harris Interactive for CTIA-The Wireless Association.5: Interest Among U. of course—revenue will top $67 billion. so do the range and capacity for mobile marketing growth. MMS or Multimedia Message Service is starting to take hold as a marketing tool. By 2012. SMS generated $47. and transcoding software.simbainformation. As technology related to the mobile space improves. Stamford. MMS and nextgeneration formats) will more than double during the 2009-2012 time frame.com. according to Portio Research. messaging (SMS. collectively. Background of Mobile Marketing Services The first SMS phones were limited to 160-character text messages. CT · 203-325-8193 · www. Copying Prohibited.Opportunities in Mobile Marketing & Advertising 2008-2009 Overview of the Mobile Marketing Business each sector.

It is slightly more male than female.6) shows. Table 1. “Generation M”—especially the youngest segment (i.e. By mid2008.S. Copying Prohibited.S.simbainformation. 6 7 8 9 10 Source: Nielsen Mobile AdRelevance. broadcast or online media can be extended via SMS or MMS to reach the consumer at or near the point of sale.1 million ages 13-17 and 4.Opportunities in Mobile Marketing & Advertising 2008-2009 Overview of the Mobile Marketing Business Mobile marketing and advertising—plus the evolving opportunities of mobile search— are developing a framework of practices that are drawn from traditional and online media. There are about as many teens using the mobile Internet as there are people over age 55 (5. branding campaigns in print. 12 . music or other incentives. Stamford. As the Nielsen Mobile study (see Table 1.com. many marketers believe that a fundamental value of mobile media stems from its flexibility to be integrated into conventional marketing campaigns. Nearly half of U. For example. according to a May 2008 Nielsen Mobile Report.4 million age 55 and older). teen mobile phone users indicated they are at least “somewhat interested” in accepting mobile ads so long as they received something in return. CT · 203-325-8193 · www. such as free air time. the focus was on entertainment. Moreover. Yahoo!’s significant commitment to mobile services attracted considerable attention: four Yahoo! mobile sites ranked in the top 10 most visited destinations. July 2008 ©2008 Simba Information. teenagers)—are amenable to online ads. One reason for the surprisingly large number of teenagers (more than half) who claimed to be “not interested” may be the fact that their parents pay for the mobile phone service. Audience Demographics The U. news and mobile mail. mobile Internet audience (age 13 and higher) is about evenly split between those under the age of 35 (52%) and over age 35 (48%).6: Top Mobile Web Destinations by Ad Impressions Served Rank 1 2 3 4 5 Web Destination Yahoo! Games Yahoo! Finance Yahoo! News ABC News MTV Comedy Central MSN Hotmail NBA Yahoo! Music ESPN Where Ads Are Going Now Marketers go where the audiences are.

com. AT&T Wireless. 13 . At the core of all mobile services are the carriers—a shrinking handful of licensed wireless providers that operate the technical infrastructure over which all mobile services are transmitted. These companies ultimately control the relationship with their customers by supplying service. Leveraging their experiences in online services. albeit overlapping. Sprint/Nextel. objectives. hence their role in marketing services is likely to increase (see On-Deck/Off-Deck section later in this chapter). companies such as Yahoo!. Stamford. ©2008 Simba Information.simbainformation. each working at its own pace and with different. T-Mobile plus many independent and virtual mobile providers. In addition. CT · 203-325-8193 · www. Google plus dozens of ad network packagers have introduced services that are customized for the mobile platforms. Separately.Chapter 2 U. often subsidized handsets and billing. content creators and aggregators—including advertising networks—are building systems and relationships to use these mobile transmission networks. which is an offshoot unit of the world’s largest handset manufacturer. new competitors are springing up in this category. In the U. Copying Prohibited. the major carriers are Verizon Wireless.S. such as the Nokia Media Network.S. Moreover. the biggest carriers are developing or investing in content.. Industry Structure Introduction Mobile marketing involves the inter-relationship and collaboration of several categories of service and technology providers.

although its recent alliance to offer service via the G1 “Google” phone changes the landscape of the industry. Next generation mobile Web services are expected to be compatible on any mobile device. This quest for exclusivity is behind the “walled gardens” (also called “on-deck” content) favored by some carriers and equipment makers who are protective of their systems. the consolidation of carriers (such as Verizon Wireless’ acquisition of Alltel) and the market strength of handset makers affect the nature of the industry.” as it is dubbed. play a role in applications including mobile marketing. runs on Google’s “Android” software. Wireless Carriers Verizon and AT&T collectively control more than half of the U. mobile market. The “gPhone. Actually. The devices they make must be capable of supporting current and next-generation services. Apple and Motorola. Mobile marketers have little input in such realignments. The relationships between these sectors of the mobile industry are constantly shifting. especially marketers’ demands to reach a near-universal market. Sprint/Nextel. ©2008 Simba Information. the current primary implementation of mobile marketing. has been losing customers for more than a year and faces an uncertain future. Copying Prohibited. In particular. although possibly not universal compatible access. with the promise that it can be upgraded as new features are developed. The arrival of the “G1” phone (“G” as in “Google”) in late 2008 is a possible game-shifting event. T-Mobile initially was the exclusive carrier for the device.com. Samsung. All handsets today can handle WAP (Wireless Application Protocol) text messages. Stamford. However. The boom in smartphone usage will require considerable standardization to assure that marketing messages are viewable on any brand of handset.S. the next largest U. Marketers want to be assured that their messages can reach every prospective customer. marketplace circumstances. T-Mobile concentrates largely on corporate users.simbainformation. mobile carrier.S. 14 . seem to assure that the industry will migrate toward technical compatibility. CT · 203-325-8193 · www. but some of the services they seek to provide may be affected by these industry developments. such as Nokia. Industry Structure The companies that manufacture mobile phone equipment. This flies in the face of some carriers and handset makers who prefer to offer an exclusive capability to attract customers to their platforms.Opportunities in Mobile Marketing & Advertising 2008-2009 U. “Wild cards” are still being introduced into this equation. although such consistency is not guaranteed. no matter which equipment is being used.S.

simbainformation. AT&T. Cox plans to test Long Term Evolution Technology.com. have tried several times to enter the mobile arena. For example. a higher-capacity 4G standard being adopted by AT&T. The marketing significance of such alternative mobile providers is that cable companies could be well positioned to offer integrated marketing and advertising packages to content partners. Competitive Environment Amidst this fluid environment. CT · 203-325-8193 · www. The growing interest of mobile publishers (content packagers).). the nation’s third largest cable operator. A collaboration with Sprint for a service called “Pivot” was abandoned in 2007. Current licensing arrangements do not permit direct benefits. are also exploring other wireless options. gradually encouraged carriers to open their systems. Verizon Wireless and operators outside the U.S. Industry Structure Cable TV companies. which could also be used by legacy phone companies (Verizon. which seek to become full-service communications suppliers. they are looking for ways to share in the revenue of services carried via their networks. etc. Stamford. companies such as Mobile Posse and Digital Sidebar are proposing ways to place advertisements on idle screens. marketers may advertise on cable’s video channels or online portal sites—and supplement their messages via mobile and location-based advertisements on the wireless platforms run by the same parent companies. Other large cable TV companies. Carriers remain protective of their networks.Opportunities in Mobile Marketing & Advertising 2008-2009 U.S. unveiled plans to launch its own wireless service in 2009. notably Comcast and Time Warner Cable. 15 . the rival wireless carrier providers (current and pending) are accelerating their assault on market share—and value-added services to recruit and retain customers. Cox Communications. but the major cable companies are exploring alternative operations. Such an approach. At the same time. especially to compete against Verizon and AT&T. many of which have deep backgrounds in advertising-supported services. For example. Carriers Role vis-à-vis Advertising Mobile carriers originally expected that consumer subscriptions and premium services would generate all revenue—much as it did in conventional wireline telephony. may play a big part in the bundled services (the so-called “triple play”) that carriers are offering to customers. In November 2008. albeit sometimes reluctantly. Copying Prohibited. ©2008 Simba Information. which will be delivered via Sprint/Nextel’s network while Cox builds facilities using spectrum it has acquired. but new ventures are being explored.

simbainformation. which was owned jointly by EarthLink and SK Telecom of South Korea.com. Most notably. Copying Prohibited. One unsettled element of this competitive situation involves the footprint of existing wireline carriers (the legacy landline businesses of AT&T. especially if the aggressive cable companies finally devise a solution to bring mobile into their bundle of communications services. pricing and service packages. CT · 203-325-8193 · www. the opportunities for such action are becoming scarce. D. the dominance of a handful of carriers will govern the direction of the mobile industry— affecting all aspects of it. including the relationships with mobile marketers. Similarly. Industry Structure At this point in the wireless communications evolution. These “mobile virtual network operator” (MVNO) services have included ones from Disney Mobile.Opportunities in Mobile Marketing & Advertising 2008-2009 U. have survived. where AT&T is the dominant legacy wireline phone company. which offer prepaid services for customers who don’t want a service contract or who have bad credit. ©2008 Simba Information. AT&T’s exclusive relationship with Apple gave the carrier the sole right to sell the Apple iPhone in the U..S. Carrier Outlook Competition will remain intense. Almost all adults who care to have a mobile phone now actually have such a device.S. may choose to use AT&T Wireless phones (such as the Apple iPhone now) and still remain tied to their landline offered exclusively in those markets by Verizon. mobile users may opt for a Verizon wireless phone—or any other carrier. However most such services quickly failed. hence mobile customers in cities such as New York. but with relatively small customer bases (in the hundreds of thousands) and limited services. with overall penetration leveling at about 86% of U. Hence. Mobile ESPN and Helio. Stamford. which were believed to be ad-friendly formats. the only way that carriers can grow is by luring users away from each other. “virtual wireless companies” (resellers of other companies’ bandwidth) have sought to carve a piece of the industry. Wireless services are not restricted by legacy relationships. residents age 13 and older in 2007. The carriers are seeking to tempt customers away from each other through a variety of technology. Although further consolidation is possible among the carriers (following the VerizonAlltel merger). The ESPN and Disney services focused on bundling content and highly directed services (such as team scores on Mobile ESPN). Boston or Washington. In addition to facility-based carriers. often based on content and affinity marketing opportunities. Virgin Mobile and TracFone. Atlanta.C.S. according to M:Metrics. Verizon and the cable TV companies). Chicago or Houston. 16 . starting in summer 2007. in Miami.

Marketers produce or underwrite such hybrid entertainment.Opportunities in Mobile Marketing & Advertising 2008-2009 U. Industry Structure In either case. such as games and contests tied in to events on other media (like sports broadcasts or game shows). the lines are blurring between content creators. etc. For example. Some agencies specialize in certain applications. are playing a major role in content aggregation. including content aggregators. It has developed oneway.). consumer packaged goods (Kraft. For example. Java games. Content Creators and Aggregators As is the case elsewhere in the digital media sector. chats and location-based services for clients in the entertainment (Warner Bros. including mobile games. SMS. CT · 203-325-8193 · www.com. ringtones. New York and London) has created 1.S. Dunkin Donuts) and other categories. ipsh! is a subsidiary of Omnicom Group Inc. wallpaper. especially among younger customers—an estimated 15% of all U. restaurant (McDonald’s. packagers match the message to a specific marketing message. Others are focused on specific functions that mobility enables or encourages. Fox. Online portals and search engines. etc.). for SMS advertising. advertisers and media distributors. which also allows them to bring their advertisers to specific mobile sites. two-way. the landline telcos have an incentive to lure customers to become “total” users of one provider. ipsh! (based in San Francisco. retail (Kmart). ©2008 Simba Information. among customers under age 30. which may include a call for action (purchase) or brand awareness message. that share rises to nearly 30%—and (2) the possibility that Verizon or AT&T may abandon their decades-old gentlemanly agreement to stay out of each other’s legacy landline territory.000 mobile campaigns since it was formed in 2001. Many of these organizations are off-shoots of existing advertising agencies and Web design/development companies. with embedded advertisements— sometimes called “advergaming”—are a staple of the new digital environment. alerts.simbainformation. 17 . Kellogg’s. such as Yahoo!. Developers and Ad Agencies Hundreds of organizations have popped up to create content and marketing campaigns for the mobile marketplace. Copying Prohibited. homes have eliminated their wireline phone connections. In addition. promotions. The wild cards in this equation are (1) the reduced reliance on wireline phones. HBO. others provide full service mobile engagement.S.. Google and Microsoft. Stamford. games.

Off-deck content—also known as “direct-to-consumer” mobile sites—consists primarily of brand-owned sites offering material from third-party providers. It also has focused on similar categories. Carriers prefer on-deck service.S. adult ©2008 Simba Information. while “off-deck” content is outside the walled garden and available to any user. this is often called “on-deck” versus “off-deck” content: “on-deck” is material (including advertisements) controlled by the carrier. aggregators and carriers) have decided that the two distribution channels should co-exist. Most notably. The content services they select for their on-deck packages typically have mass appeal and are generally sourced from the largest media and entertainment brands. On-Deck vs. they are seeking ways to profit from both approaches.S.Opportunities in Mobile Marketing & Advertising 2008-2009 U.S. support and billing. there is a direct interactive relationship with a consumer. all parties in this equation (content companies. Through the handset. since its debut in mid-2007. recently spun off from Kinetic Worldwide. a global ad/marketing agency that specializes in “out of home” media. Off-Deck Content The digital content world has been debating the value of “walled gardens” for more than 20 years. has attracted customers to the AT&T service. With much of the content increasingly linked to advertising or marketing campaigns. Industry Structure Kinetic Mobile. In the mobile marketing environment. By November 2008. 18 . while consumers and many content providers favor the openness of unrestricted access to off-deck content.simbainformation. Apple’s iPhone. the iPhone 3G had become the most popular smartphone. On-deck services help drive overall data-service adoption. CT · 203-325-8193 · www.com. Stamford. Handset Equipment Suppliers Manufacturers of mobile handsets work with carriers to develop features that can distinguish products and enable carriers to offer services. Carriers fret that they will be merely wireless “pipe providers” rather than “value-added content providers” of choice who share in the revenue from content and services transmitted through their circuits. The off-deck provider uses the carrier’s infrastructure for signal delivery. outpacing the Motorola RAZR in sales as the best-selling handset purchased by U. Copying Prohibited. is jointly owned by WPP Group and its own management team. which has been available exclusively for AT&T customers in the U.

Ad Networks At the core of mobile advertising—as it is with online advertising—is the “ad network. conflicting studies—underscores the lack of clarity—or disinformation—that is rampant within the equipment and transmission infrastructure of the mobile industry. notably for digital content such as ringtones and music distribution.S. Industry Structure consumers. The major handset manufacturers. especially Nokia. mobile phones in the third quarter of 2008.4% market share.com.S.simbainformation. Although the icon-driven interface of the iPhone differs from the keyboard approach of most other smartphone devices. ©2008 Simba Information. In other words. Recent studies showed that the category of mobile phones with a QWERTY keyboard had the greatest year-over-year sales growth: 30% of handsets had keyboards in the third quarter of 2008. Consumers also like camera phones. according to NPD Group’s November 2008 report on thirdquarter sales. Motorola has invested in content suppliers. Another study from Strategy Analytics cited Samsung as the major supplier of U. according to NPD Group. with a 22.e. nearly triple the level of a year earlier. Their efforts coincide with greater competition for audiences in a mature market. especially Internet access features. Motorola and Apple. which have marketing applications as well as entertainment and personal enjoyment elements.Opportunities in Mobile Marketing & Advertising 2008-2009 U. the interlinked sectors of the mobile phone infrastructure are collectively supporting the development of applications and distribution that further enable mobile marketing and advertising. Stamford. Overall. Copying Prohibited. CT · 203-325-8193 · www. This offers great benefits to mobile marketers. 19 . The popularity of the iPhone represents a focus on functionality. RAZR had been ranked as the top-selling consumer handset for the previous 12 quarters. have supported and allied themselves with content and marketing providers. the overarching implication is clear: next-generation devices will have to include a more sophisticated input system than the standard 12-key numeric keypad.” typically a company that connects publishers (Web sites) with advertisers who want to place ads on those sites to reach specific customers. The dueling data—i. Nokia has established several production and ad network operations (which is discussed further in Chapter 8).

S. online set-up. RSS (syndicated) content or other messaging content. Greystripe. The ad network serves advertisements from its ad server. ad network companies range from giants to tiny specialized firms. AdMob.simbainformation. Vol. Medio Systems. provides adult advertising inventory Large ad network. global. blogs. global. Nokia Media Network. global. 1 by Peggy Anne Salz. strong presence in India Medium ad network. global. Millennial Media. presence in Asia Pacific & South Africa. Table 2. strong presence in social networking sites. online set-up. global. strong presence in social networking Medium ad network. presence Large search ad network. global. online set-up. Copying Prohibited. display and search advertising Source: Adapted from Bango White Paper. caters for a range of budgets Medium ad network. CT · 203-325-8193 · www.S. Stamford. caters for a range of budgets Large search ad network.S. Amobee and Mo’Jiva. 20 .Opportunities in Mobile Marketing & Advertising 2008-2009 U. global (predominantly Europe & U. online set-up. strong U. apply online. global. Yahoo! Mobile. Here is a brief—but far from exhaustive—roster of ad networks: Google Mobile. online set-up. 2008 ©2008 Simba Information. easily set up by contacting MCN. online set-up. online set-up. caters for a range of budgets Medium ad network.S. which responds to a site when content is requested.Biz Third Screen Media AdModa DeckTrade Google Medio Mo’Jiva JumpTap Yahoo! Benefits Large ad network. global. caters for a range of budgets Medium ad network. carrier presence Large search ad network. such as e-mail. global Medium ad network.1: Mobile Ad Networks and Their Benefits Network AdMob BuzzCity GetMobile MCN mKhoj ItsMy. Industry Structure they are matchmakers who take an inventory of space on various mobile Web sites and sell them to marketers who seek to put a relevant message in front of demographically correct users of that site or via other content delivered to users. global. caters for a range of budgets Medium search ad network. Third Screen Media (AOL). caters for a range of budgets Small ad network. focused). apply online. strong U. global.com. Quattro Wireless. online set-up. Screentonic (Microsoft). apply online. global. apply online. apply online. In the mobile sector. caters for a range of budgets Medium search and display ad network.

which provides marketing technology and services. One study that compared people exposed to mobile campaigns and those not exposed found that mobile ads can be effective in raising brand metrics. This research from Dynamic Logic found that mobile ad campaigns generated an average increase of nearly 24 percentage points in awareness plus elevated favorability and purchase intent (see Table 2. About 87% of mobile ads seek a direct response order or call for action. compared to about 13% that strictly intend to distribute a brand message. Users may be intrigued and pay more attention since it is perceived as personal and appears in a less cluttered environment. product category. sports.2). For example. Mobile Performance The value of any medium or campaign comes down to the results generated. which has hemorrhaged customers throughout 2008) may fold. Copying Prohibited. ©2008 Simba Information.com. CT · 203-325-8193 · www.Opportunities in Mobile Marketing & Advertising 2008-2009 U. news. business. Google’s AdSense for mobile content. such as billing. Stamford. Each system has an automated way in which marketers can match their advertising objectives to the appropriate audience. The Role of Mobile Advertising Mobile advertising has primarily been a direct response medium. 21 . service and ancillary support.simbainformation. DoubleClick. rather than branding medium. such as country. These relationships underscore the evolving ways in which ad networks and other entities in their value chains are establishing additional ways to reach mobile prospects. and the weaker carriers (notably Sprint/Nextel. early studies have indicated that it can effectively reach target markets. Outlook for Mobile Industry Structure Mobile marketing relies on the providers of technology. and relevancies. One reason for the significant upticks may be the relative novelty of mobile advertising. including mobile sites dealing with entertainment. Industry Structure Other sectors of the digital advertising community have formed alliances with mobile ad networks. and Millennial Media’s MBrand and Decktrade networks. Despite trepidations about the mobile platform and its overall reach. There are automated checklists. has integrated the capabilities of its DoubleClick Mobile advertising delivery system with mobile ad networks including AdMob. health and many other specific topics. The oligopoly of carriers may consolidate even further than it has in recent years.S.

with its Google phone device. market demonstrates the challenge of building commodity products in a large. automotive. Motorola’s tumble in 2007 and 2008 on the heels of Sony-Ericsson’s retrenchment from the U. financial services.S. consumer packaged goods. 22 .7% Survey included the following industries: alcohol. CT · 203-325-8193 · www.com. Industry Structure Table 2.Opportunities in Mobile Marketing & Advertising 2008-2009 U. and the quick expansion of HTC.0% 20. ©2008 Simba Information. The instant ascendance of Apple. telecom and travel. suggest that new providers can find a spot—but often at the expense of older suppliers. entertainment. thanks to the iPhone. retail. Stamford. Copying Prohibited.simbainformation.0% Aided Brand Awareness Brand Favorability Message Association Mobile Ad Awareness Purchase Intent 23. but limited. Source: AdIndex of Mobile.2: Mobile Advertising’s Effect on Consumers’ View of Brands 30. Dynamic Logic. only a limited number of handset manufacturers will remain in the market—offering a wider array of smartphones. July 2008 The barriers to entry—spectrum space and capital expenses—restrict new participants in the market.4% 4. Similarly.0% 25. although future mobile services using WiMax and other emerging technologies could modify the provider line-up.2% 6.9% 12.9% 5. On the other side. consumer electronics.0% 0.0% 10. the relatively low barriers to entry for content providers suggests that more such companies will compete—and seek to develop relationships with carriers and equipment makers.S.0% 15. marketplace.0% 5.

mobile phone technology has jumped ahead in spurts of three to six months. For example. The downside of rapid improvement is the need to upgrade facilities. The ability to develop marketing tactics for such platforms will itself evolve from today’s ventures. Stamford. especially ones that benefit from broadband.com.Chapter 3 Technology and Implementation Introduction In less than 20 years. Nonetheless. CT · 203-325-8193 · www. capabilities and reliability to handsets. such as WiMax and LTE (Long Term Evolution) networks are in development and may begin appearing after 2010. new components provide greater power. carriers and applications providers (including marketers) and a burden to them all. On the positive side. new platforms. the new Sandbridge Technologies SB3500 baseband processor for cell phones is said to be able to cut the cost of phones by ©2008 Simba Information.simbainformation. the specific nature of these future services is not yet defined. 23 . high-speed delivery of visual material. Mobile phone technology is advancing rapidly—which is generally both a joy to equipment suppliers. which includes the expense of developing additional (often expensive) products. Copying Prohibited. At the same time. These platforms will add new opportunities for mobile marketing. enabling services—such as mobile marketing—but also generating confusion and frustration. This frenzy is slowing but is likely to continue with the migration from third-generation (3G) to fourth-generation (4G) transmission technology.

These simple messages allow brands and companies to deliver their content and connect with consumers through surveys. SMS and MMS: This category includes ad messages that can be delivered by the various messaging formats. WAP sites are Web sites written in. or dynamically converted to Wireless Markup Language and accessed via the WAP browser. ©2008 Simba Information. WAP is an open international communications standard. become available. A WAP browser provides basic services of a computer-based Web browser but simplified to operate within the restrictions of a mobile phone. Stamford. allowing TV-like commercials (either original creations or adapted from a broadcast TV campaign) to be delivered to a handset. such as fourth-generation (4G) wireless service. Mobile Video Ads: This category is a blend of television. although not with the software programmability. CT · 203-325-8193 · www. 24 . Downloadable Applications: These range from ordering ringtones or movie tickets to delivery of games. Copying Prohibited. sweepstakes. have comparable single processors. • • • Transmission Technologies The quality and reliability of mobile marketing is in part dependent on and affected by the types of transmission services available from mobile carriers.simbainformation. voting and purchase/transactions. such as its smaller view screen.Opportunities in Mobile Marketing & Advertising 2008-2009 Technology and Implementation about 15%.com. WAP: Wireless Application Protocol Most U. Marketing Formats Four primary methods exist for mobile marketing: • Message: Text. Other mobile chip makers.S. familiar online services delivered via a small-screen wireless device. the Wireless Application Protocol which enables access to the Internet. which means that it can be upgraded as new applications and technologies. such as Broadcom and Qualcomm. The Sandbridge processor is software programmable. YouTube and mobile Web. Mobile Web: This category offers mobile Web browsing (search and banner ads). mobile phones use WAP.

Google Android. It is relatively easy to use for access to a large. according to Information Week. Copying Prohibited. Young users of mobile service have shown themselves to be willing to accept such marketing messages.Opportunities in Mobile Marketing & Advertising 2008-2009 Technology and Implementation Third Generation (3G) The third generation (3G) of mobile phone standards enables network operators to offer a wider range of advanced services along with improved efficiency and reliability. 25 . this is an encouraging signal—especially because the very nature of SMS triggers engagement and dialogue with prospective customers through a highly personal medium. Text Messaging and SMS Codes Common short code messaging has become the first model for mobile marketing. other OS competitors include Palm OS. Qualcomm's BREW. its users) is receptive to short code messages. For advertisers. The ubiquity of CSCs as a marketing platform means that it is a scalable vehicle for brands to connect to almost any mobile user.simbainformation. SMS is widely used for targeted advertising.com. Operating Systems Marketers—like other mobile applications developers—have to work within the Operating System (OS) framework that runs the handset devices. Beyond its wildly popular use for real-time messages between individuals. Stamford. The dominant OS provider is the Symbian Foundation. The term “common” refers to the ability of a single short code to reach handsets served by all major wireless carriers. an organization that Nokia owns (after buying out the stakes of other handset makers). Symbian OS holds a 47% share of the mobile OS market compared to Apple (iPhone OS) at 17%. SavaJe and MontaVista Software. Short Message Service (SMS) is a communications protocol that enables an interchange of short text messages between mobile devices. ©2008 Simba Information. addressable audience at a relatively low cost. capability for SMS is built into more than 95% of mobile phones in use today. usually expecting a message in return. 3G has enabled mobile video and broadband data services via wide area networks. Microsoft (Windows CE and Windows Mobile) at 14% and RIM at 15%.e. Advertising campaigns via SMS require a user opt-in action. typically fewer digits than standard phone numbers. to which a mobile user can send a message. Common Short Codes (CSCs) are a string of numbers. CT · 203-325-8193 · www. signaling that the handset (i.

Copying Prohibited. Because they’re so scalable. • • ©2008 Simba Information. which is discussed further in Chapter 8 in connection with the Obama presidential campaign. Promotional ads. Consumers have a high recall of SMS messages. coupons or discounts (15%) and donations to charity (3%). Texting can become an order-entry system for messages delivered via other media. marketers have universal reach. SMS Outlook As SMS persists as an ad medium. represent about one-third of the total SMS messages. broadcast. its integration with traditional (print. Stamford. Short codes are widely accepted and deployed worldwide and thrive in low. about 12% responded to an SMS ad—a far higher response rate than conventional direct mail (less than 3%) or online messages.com. primarily through the transmission of general information about a product. consumers found that 43% of people who actively text and 19% of total mobile phone users recall receiving SMS ads. 26 . online and other out-of-home) media will grow. Scalability: Because short codes work on any device.simbainformation. texting is especially simple and familiar.and high-tech environments. service or brand. marketers have used SMS for a combination of branding and direct response campaigns. Several indicators point to a robust future for short codes: • Global reach: They are widely accepted and deployed in North America and Europe. SMS messages can be dispatched economically for small and large campaigns. Just under half of SMS offers are focused on brand-building. CT · 203-325-8193 · www.Opportunities in Mobile Marketing & Advertising 2008-2009 Technology and Implementation Marketers have adopted SMS for a variety of applications and a recent analysis by M:Metrics of the percentages of SMS marketing messages received by type showed: information about a product/service/brand (42%). Of this group. An August 2007 M:Metrics evaluation of 40 million U. So far.S. Technology: Short codes work on low-tech devices. usually built around contests or coupons. contests (17%). for customers with smartphones. in the same way that cross-platform interactive connections via Web pages proliferated from TV and print advertising during the late 1990s and early 2000s.

CT · 203-325-8193 · www. Stamford. Copying Prohibited.simbainformation.Opportunities in Mobile Marketing & Advertising 2008-2009 Technology and Implementation • Engagement: Use of the familiar format through which mobile users communicate with each other means that short codes fulfill users’ expectations with a familiar and personal interface. But developments bear monitoring as business and regulatory decisions will affect the ways in which applications (such as marketing) can be implemented. • Click-Through Rates When a mobile user receives a marketing message (SMS or other format). Other technology factors are also works in progress.com. Future Technologies Wireless carriers are currently engaged in a vigorous debate about next-generation transmission standards. HSPA+ or Internet HSPA) extends the capabilities to offer faster data rates and provides significant battery life improvements. i. mobile ad click-through rates fluctuate from 2% to 20%. An offshoot called “Evolved HSPA” (also known as HSPA Evolution. Return on investment: Mobile marketing campaigns using short codes are relatively inexpensive and can generate almost immediate payback.e. 27 . The feud over WiMax (Worldwide Interoperability for Microwave Access) and LTE (Long Term Evolution)—all part of fourth-generation (4G) ecosystems—is beyond the scope of this report. ©2008 Simba Information. As part of the global rivalry among handset and infrastructure developers. fewer distractions from multiple banner or other ads on a single screen. more such technology developments are likely to surface during the coming years. For example. in part because of the lack of clutter on the mobile platform. and are consistently higher than online rates. The adoption of such technology may depend on the economic conditions that allow for their deployment and for customer adoption. especially ones for broadband formats that will greatly enable mobile Web services. According to a Nokia Interactive report conducted by Bango. High Speed Packet Access (HSPA) is a collection of mobile telephony protocols that extend and improve the performance of mobile services. he or she can respond with a click response.

Open. newspapers. Other technologies that integrate mobile reception and interactivity with traditional media are being developed. brand.S.Opportunities in Mobile Marketing & Advertising 2008-2009 Technology and Implementation QR and Other Scanning Technologies Beyond the transmission and handset technologies are a variety of converged features that can be used in mobile marketing. a Broadway billboard can become a direct mail piece for a show ticket purchase. ©2008 Simba Information. etc. billboards or other products (magazines. 28 . although fashion merchant Ralph Lauren offered a QR showcase in connection with a style guide issued for the 2008 U. By capturing the image of the code from the printed ad. Cell phones with cameras and specific reader software embedded within them can read the code. including location-based marketing. Marketers should be vigilant to make sure that their technology developers are aware of major technology breakthroughs and distribution schemes and to be sure that their content is compatible with any new devices or services that appear and are viable. They have not yet made much of an appearance in the U. interactive “conversation. a print advertisement in Vogue can connect a reader to a video of a fashion show. QR codes originated in Japan and have been widely deployed in Asia and parts of Europe. then a WAP (Wireless Application Protocol) browser (effectively a browser on a mobile phone) opens to reveal particular data that store. using a camera within a mobile handset. For example. immediate. Once the mobile browser opens.” Such enhanced advertising revenue is expected to appeal to mobile operators. CT · 203-325-8193 · www. The two-dimensional QR code resembles a familiar bar code. the consumer and brand begin to have a direct. product labels. This instant opt-in style of 2D codes is a key ingredient to successful mobile advertising.simbainformation. a customer can obtain information or directions regarding the product. With today’s Web-enabled smartphones.). Copying Prohibited. Customers decide to actively seek further information. QR (Quick Response) codes can be printed on posters. Stamford. except it is square and composed of blocks rather than lines.com. a bus stop advertisement can drive traffic to a nearby restaurant with information of location and a discount coupon. content owner or advertiser wants to show.S.

In particular. The shift toward ads for products and services not tied directly to use on the mobile handset reflects the growing appeal of mobile marketing.S.S.1). A comScore study of SMS advertising in five European nations (U. CT · 203-325-8193 · www.simbainformation. especially clothing/fashion. France. Although the European experience is not always a definitive signal of trends in the U.6% decline in the number of SMS ads for mobile-only services (see Table 4. The decline in car advertising reflects the fall-off of interest in automotive purchases during the economic crisis of 2008. 29 . the ratio is shifting. While SMS ads for mobile and media products/services are still threefold the number of ads for mobile-related products.K. the popularity of fashion and food (both restaurants and grocery purchases) bodes well for these categories as advertising moves to smartphone platforms. at the same time.com. Italy and Spain) identified 15. restaurants and food.. (It was about fourfold in ©2008 Simba Information. with their multimedia capabilities. Stamford.2% annual growth in the number of messages for consumer products and services. there are more messages for consumer goods and relatively fewer for mobile services (such as ringtones). a recent analysis of the categories of SMS ad messages offers a significant snapshot of what U. Germany. mobile phone marketers may expect. there was a 9. Copying Prohibited.Chapter 4 Growth of Products and Services Mobile Marketing for Diverse Products: Growth As the SMS marketing category matures..

Italy and Spain Source: comScore M:Metrics.1: SMS Advertising Audience and Response Rates.1% 5.3% 4.1% 6.792 25.2% 15.413 8.9% 3.0% 11. 2007 Downloads for mobile phone News or information Mobile phone or plan Entertainment Total Mobile + Media Sectors Clothing/fashion Restaurants Cars Food Financial services Consumer electronics Travel Total NonMobile + Media Sectors 40.6 3.8% Chg.6% 11. CT · 203-325-8193 · www.647 6.2% -9. Table 4.779 29.2% Aug. 2008) Received SMS Advertisements (in 000) Aug.simbainformation.) This migration reflects marketers’ recognition that the sole targeting criterion is no longer products/services for use on the mobile handset.1.587 3.3 3.4% 14.3% 4. Germany. Table 4.963 3.4 0.K.574 11.8% 4.Opportunities in Mobile Marketing & Advertising 2008-2009 Growth of Products and Services 2007.4% 2. 2008 3. although based on usage in five large European countries.7% 5. 30 .602 34.5 0.8% 6.037 4.8% 11.424 3.4 0.6 Results for mobile subscribers in the U.8 0. 2007 4.7% -2.024 % Chg. Select European Nations (3-month average ending Aug.0% -14.com.6% 4.2% 4.122 31.9 -3.0% -11..957 5.5% 7. 2008 35. October 2008 ©2008 Simba Information. Copying Prohibited.929 32.222 12. targeted audiences.1% 4.6% 4. -0.2% 9.0 0.4 1.915 22.9% 12.162 9.407 1. France.539 Aug.644 111.503 1.7% 5.982 1. especially to young.3% -15.7% 6. Specifically the growing popularity of clothing/fashion and food suggests the mainstreaming of SMS services.841 5.6% 38.1 0.2% 37.2% 3.731 2. -12.956 4.1% 17.0 0.9% 6.7% 6. Stamford.2% % Responded to SMS ads Aug.230 100. augurs the usage pattern that can be expected in North America. The drop-off of automotive messages is surely linked to the precipitous decline in car advertising and sales during 2008.4% 53.4% 15. 2007 and Aug.9 0.

The revenue model is significantly different—and still uncertain—but the transaction capability of search marketing is appealing. 31 . ©2008 Simba Information. handsets will include smartphone (Web access) capability by 2013.S. or about $1 billion to $1. As with an online search process. there is currently increasing search for products and services both in the local region and in distant locations. the development of mobile search reflects the growing popularity of smartphones.simbainformation. Tied to the expanding use of smartphones. Search via Mobile Platforms Mobile search is the ultimate direct marketing tool.2 billion. there is a tantalizing opportunity in the “pull” of search marketing. Most importantly. will account for at least 25% to 30% of that total. a customer can enter a word or topic into a mobile search engine. The scale of mobile search is potentially enormous. Marketers expect the term may be one connected with shopping. The large emphasis on local searches represents a need to find sources for immediate access and use. directions to a theater or gas station or other activity connected with an on-site transaction.Opportunities in Mobile Marketing & Advertising 2008-2009 Growth of Products and Services Search and Location-Based Services While mobile marketing often focuses on the “push” of interactive advertising. Copying Prohibited. according to The Kelsey Group’s October 2008 report Mobile Market View. Hence one of the most popular search categories is local entertainment and movie listings and start times. the revenue from mobile search may climb about eightfold by 2012 to nearly $4 billion. entertainment. Underlying these expectations for mobile search is the finding that nearly 18% of mobile users sought maps or directions via their handsets in late 2008. Among early adopters now using smart phones. CT · 203-325-8193 · www. About half of U.com. up from less than 11% a year earlier. refreshments or similar location-based service—such as the nearest pizza or coffee shop. although today’s level is barely half a billion dollars worldwide. an always-on “yellow pages” that enables a mobile user to look for a product or service from any location. Stamford. About 16% of them looked for products or services in their local area. Nearly 14% of smartphone users sought information about movies or other entertainment.S. While much of that growth will be in Europe and Asia. the U. compared to 10% in a 2007 study. compared to just over 8% in 2007. It allows marketers to reach a customer while en route to making a purchase.

The broader usage of smartphones will accelerate the popularity of mobile search. Google. Google negotiated for months in late 2008 with Verizon to make Google Search into the default browser and interface on Verizon smartphones. Location-Based Services The “last three feet” of a transaction is the Holy Grail. 32 . Yahoo! added an old-fashioned voice capability to its oneSearch mobile portfolio in October 2008. in part. Stamford. September 2008 ©2008 Simba Information. Yahoo!’s service bypasses the mobile browser and includes Search Assist. Copying Prohibited.000.simbainformation.000 61% 2011P 329.000 48% Source: eMarketer. In all categories. search will quintuple in use during the next five years— with more than 70 billion mobile searches conducted by 2013. It is tied. For example.000 119% 2010P 215. Users of BlackBerry and Nokia handsets can either speak or type a search for content ranging from cinema times and restaurant recommendations to sports or financial data. advertisers believe. This combination of technology deployment and user expectations indicates that mobile users will increasingly rely on smartphones for local commercial and social search experiences. will continue to represent a larger share of mobile marketing. For that reason. mobile advertising and marketing—which can reach a customer at or near the point-of-sale—is a major objective of many marketers.2: Global Location-Based Service Users. Yahoo! and other online search providers will be the greatest beneficiaries of the migration to mobile search. Technology plays a role in the mobile search roadmap. including on-deck. The growth of mobile search applications. 2008-2012P 2008P # of users % chg.000.com.000 53% 2012P 486. which features spelling suggestions and real-time related concepts for better search results. offdeck and SMS services. 61. Microsoft won out with a package that provided Verizon with a more generous revenue sharing feature plus a guarantee of substantially higher payments.000 -2009P 134. Eventually.000.Opportunities in Mobile Marketing & Advertising 2008-2009 Growth of Products and Services All of the major online search providers have been seeking deals with carriers and handset makers.000.000. CT · 203-325-8193 · www. Table 4.

The bigger dilemma is whether—and how—customers will buy larger.simbainformation. CT · 203-325-8193 · www. costlier products via their handsets. equipped with a point-of-presence chip (such as an RFID: Radio Frequency Identification microprocessor) can be used for proximity-based services. limited exclusively to iPhone users. Stamford. For example. the mobile handset. This aggressive expansion reflects the increasing use of smartphones and Americans’ representation of about 20% of the global market for LBS. the audience for mobile location-based services will reach about 100 million users by 2012. 33 . In the U. able to deliver all of the same services. servicebased advertising. The smartphone is a supplement or replacement for the desktop or laptop computer. a social mapping service that offers location-based. m-commerce has proven itself via the sales of ringtones and other handset-oriented content. since customers seeking a product or service are most likely to respond to messages that recognize their position. They represent the real value of a portable service. On a micro-purchase scale. Nokia and others have tested chips in handsets which can be swiped past readers and fuel pumps or other retail locations to automatically make debit or credit payments for purchases. included localized banners on the CBS Mobile News and Mobile Sports sites. Copying Prohibited.and place-relevant connections. space-.. time. Mobile commerce is potentially a major component of the mobile marketing equation. able to direct users from wherever they are to an appropriate (local) merchant.Opportunities in Mobile Marketing & Advertising 2008-2009 Growth of Products and Services to mobile search. Quattro Wireless introduced a similar location-based advertising inventory in September 2008. which began in February 2008. ©2008 Simba Information.S. As smartphones become more widely used. They enable contextual. The project.com. Pioneering Location-Based Services CBS launched Loopt. Moreover. Geographic Positioning System (GPS) and Mobile Commerce GPS—built into every mobile device—will encourage more location-based and mobile search opportunities. that question is likely to diminish. pointing Loopt users to local businesses based on their physical location.

com. This prospect is being developed.Opportunities in Mobile Marketing & Advertising 2008-2009 Growth of Products and Services Married to handset marketing. they may be adapted to encourage one-touch ordering. CT · 203-325-8193 · www. the options are extensive. Since most mobile advertisements involve calls to action.simbainformation. Stamford. ©2008 Simba Information. Copying Prohibited. although adoption may be very slow— especially if the economic downtown discourages customers from making impulse purchases. 34 .

Measurement & Analytics Usage Patterns Predictably.simbainformation.to 24-years-old) use Mobile Content Usage more of the interactive features. younger customers (“Generation Y. Basically. The Pew Internet and American Life Project ©2008 Simba Information.com. Taking photos 21% 13% Checking e-mail Browsing the Web Video calling GPS services Listening to music Playing games 10% 9% 4% 2% 12% 5% 8% 3% 3% 3% 1% 1% Source: Accenture. CT · 203-325-8193 · www. December 2007 survey Americans’ love affair with mobile devices encourages marketers to pursue this platform as a marketing medium. the rate is Older (45+) triple that of their parents’ Only phone calls 27% 69% generation (see Table 5. Stamford. Baby Although only a small share actually Gen Y Boomers & (18-24) do browse (about 9%). As evidence of the indispensability of mobile phones (including smartphones). older and younger mobile users rely on different features of their mobile devices.1).1: aged about 18.” now Table 5. most notably browsing the Web.Chapter 5 Usage Patterns. 35 . Copying Prohibited.

simbainformation. To understand how mobile phone users may embrace mobile marketing messages. Measurement & Analytics Table 5. Stamford. CT · 203-325-8193 · www. it is useful to know how they use existing mobile services. 36 .3: Mobile Data and Communications Activities (Among mobile device users) % who have EVER done this Send/receive text message Get a map or directions Watch video 58% 14% 10% % who do this on a typical day 31% 3% 3% Source: Pew Internet and American Life Project Survey. The Pew Internet and American Life study of what Americans do with their mobile devices (both standard handsets and smartphones) looks at similar data in a slightly different way.2). 2002-2007 (% of respondents who said it would be “very hard to give up” device) 2002 Cell phone Internet Television Landline telephone E-mail Blackberry or wireless e-mail device 38% 38% 47% 63% 35% 6% 2006 43% 38% 44% 48% 34% 22% 2007 51% 45% 43% 40% 37% 36% Source: Pew Internet and American Life surveys. Pew identified a number of activities that suggest a proclivity to use mobile marketing/advertising features (see Table 5. “Generation Y” Table 5. December 2007 ©2008 Simba Information. while other services have waned (see Table 5. Most notably the “generation gap” between young customers and their parents (i. 2002-2007 has asked consumers “how hard would it be to give up” a device or service they use for communications and media access.2: Reliance on Mobile Devices.e.3). Copying Prohibited.Opportunities in Mobile Marketing & Advertising 2008-2009 Usage Patterns.com. Reliance on mobile devices has increased annually.

use of mobile content is likely to become more widespread. Targeted mobile advertising can fulfill that requirement. Marketers are counting on their interest—and previous examples from the online world suggest that as customers become more familiar with a medium. more than three-quarters of older users merely make voice calls on their mobile phones. paving the way for Table 5.4: Mobile Web Usage by Age 10% 7% 12% 10% 23% 13-17 18-24 25-34 35-44 45-54 55+ 11% 27% Other Source: comScore M:Metrics. Copying Prohibited. Measurement & Analytics and “Baby Boomers”) demonstrates the significantly different expectations they have for their mobile devices. Conversely. they are more willing to tolerate—or even enjoy—marketing and advertising options that seem customized to their interest. 37 . As smartphones make inroads into all age groups.com. compared to just over one-quarter of younger customers.Opportunities in Mobile Marketing & Advertising 2008-2009 Usage Patterns. Stamford. “tweens” (ages 8 to 12) use a mobile phone.simbainformation. Hence. According to Accenture’s survey. Tween Usage It is not just “Gen Y” that has embraced mobile phones among America’s youth.S. May 2008 ©2008 Simba Information. Nearly half of U. while 12% of young mobile users take advantage of that function. the expansion of technology set the stage for more marketing opportunities—although it is not yet clear that older customers will expand their usage patterns. only 1% of older customers listen to music via their handset. CT · 203-325-8193 · www.

such as home or parent’s office phone.5). Most dramatically.Opportunities in Mobile Marketing & Advertising 2008-2009 Usage Patterns. a comparison of late 2007 data and mid-2008 data showed that in four categories—SMS. a “Firefly” model which can only send and receive calls to pre-programmed numbers.5: Use of Mobile Data Services (Users in millions) 180 160 140 120 100 80 60 40 20 0 SMS MMS Games Mobile Web 85 70 140 102 80 62 78 160 Q4 2007 Q3 2008 Source: Limbo and GfK/NOP Mobile Advertising Report. Steady Choices Even as the mobile marketplace segments use by age and demographics. This measurement helps marketers and content developers identify categories toward which they must pay attention and consider services. Stamford. games or other extra-fee services to these phones. CT · 203-325-8193 · www. the burst in mobile Web usage (about 25% in less than one year. October 2008 ©2008 Simba Information. games and mobile Web access—the number of users continues to climb (see Table 5.com. but coming off a relatively small base) underscores the great potential for mobile Web advertising.g. the primary reason parents cite for giving their kids a mobile phone is “safety” or an emergency. Table 5. Notably. 38 . MMS. Copying Prohibited. Measurement & Analytics the next generation of mobile devotees.simbainformation. there are ways to keep track of overall usage—largely to gauge the viability of each emerging category of content and applications. The Nielsen survey found that 68% of parents prohibit downloads of ringtones. According to a September 2008 Nielsen survey. Many of the kid-friendly phones have limited usage (e.

CT · 203-325-8193 · www. smaller scale. Measurement & Analytics Measurement and Analytics Measurement of mobile usage. Most of them offer a dashboard for desktop analysis of how a marketing campaign (or general usage of a mobile site) is succeeding. RSS feeds or other directions. Some of the services. Mobile analytics allows mobile site owners to obtain insight into traffic and sight usage.Opportunities in Mobile Marketing & Advertising 2008-2009 Usage Patterns. Not all devices enable geographic detection because the gateway’s IP address is used. Lack of cookie support on mobile devices and changing IP addresses mean that it is hard to track the identify of unique users. study in 2008 found that 71% of businesses do not measure mobile traffic to their sites and half of firms do not know how many unique users landing on their sites originate from a mobile device. a Utah-based provider of online business optimization software. Despite the growth in mobile Internet access via smartphones. Geographic identification is murky. An Omniture Inc. is still in its infancy. there is still a paucity of measurement of mobile usage. Following are some hurdles facing mobile marketing analysts: • JavaScript is the most common way of collecting data for Web analytics.simbainformation. Copying Prohibited. contends that intelligence from mobile traffic can be used to improve Web site content for mobile users and for marketing. mobile analytics have evolved at different paces (owing largely to mobile’s later arrival and for now. users may come to a mobile site via search. offer real-time monitoring and analysis. 39 . which include mobile-specific metrics. e-mail. including analysis of how customers respond to mobile advertising and marketing messages. Detecting the source of traffic is not a stable process. ranging from data gathering technology to user measurement.6 provide mobile analytics services.com. which will retain customers on the Web site for longer periods and increase conversion rates. enabling them to make data-driven decisions. direct entry. Omniture. The companies cited in Table 5. Just as Web analytics have become a vital tool within the online marketing world. such as Bango’s. Hence marketers who want to see a more ©2008 Simba Information. not a GPS signal. Measuring mobile Internet traffic.” is not easy and provides many challenges. but not all the mobile browsers execute JavaScript. Webmasters are adopting mobile analytics to complement their online analytics tools. Stamford. also called “Mobile Analytics. • • • As mobile Web becomes widespread.

where users may use their smartphones for business and noncommercial/non-entertainment applications. Young Users’ View of Mobile Marketing Another view of mobile marketing recall appears in a spring 2008 Nielsen mobile study. Q2 2008 (% of U. which found that young users are most likely to recall mobile advertisements. CT · 203-325-8193 · www. Penetration of smartphones in this age category is large but not as pervasive as it is in the older professional age brackets. The relatively high recall rates of younger users demonstrates how engaged they are with the devices. Stamford.com.Opportunities in Mobile Marketing & Advertising 2008-2009 Usage Patterns.simbainformation.6: Mobile Analytics Vendors Admob Amethon Bango Coremetrics DeckStats mobileStats Mobilytics Motally Nedstat Omniture Tigtags XiTi Source: Simba Information complete picture of what's happening with their mobile users must retain an analytics supplier. Nonetheless. the high ad recall levels among teenagers are another reminder of the long-term opportunity in mobile marketing as this age cohort grows up.7: Mobile Ad Recall by Age Segment. Copying Prohibited. 40 . Table 5. data users who recall seeing ads on mobile phones) 70% 60% 50% 40% 30% 20% 10% 0% All Data Users 13-17 18-24 25-34 35-54 54+ 30% 34% 31% 25% 17% 58% Source: Nielsen Mobile’s Q2 2008 Mobile Advertising Report ©2008 Simba Information.S. Measurement & Analytics Table 5.

The participants are largely within the target demographic age group and behavior group of smartphone users.simbainformation. With this audience available—all of whom want to connect with others.S. two of the liveliest elements are user-generated content (UGC)—the kinds of homemade productions that appear on YouTube—and social media. Mobile access and input to these ventures is rampant. visitors in August 2008. MySpace had 71 million. MySpace and many other personal and business-oriented services).com. Friendster had more than 80 million members worldwide with 97% of them outside the U.Chapter 6 Social Media and User-Generated Content Introduction In the Web 2. 41 . which includes all kinds of collaborative relationships (Facebook.0 environment. Stamford. they are exploring how to take advantage of their platform.S. What the services need are means to connect their users via mobile. share information and pictures [one of the top uses of social networks and of mobile phones]—social networks have become communications systems. Increasingly. CT · 203-325-8193 · www. Social Networks Facebook had close to 43 million unique U. Copying Prohibited. A natural progression for them is ©2008 Simba Information. Hi5 tracked 55 million monthly visitors worldwide.

com. 42 . comments. have information about these users including telephone numbers. Vodafone and Telefonica UK-02. carriers around the world are looking at how to create their own social networks that take advantage of their infrastructure. That is the case with Zyb (www. In August 2007.Opportunities in Mobile Marketing & Advertising 2008-2009 Social Media and User-Generated Content to become communications platforms. Ireland-based Newbay. Legacy wireless carriers are waking up to the fact that they have the quintessential social network at their fingertips.S. Copying Prohibited. This client enables people to connect to their various social networks through their phones. In the U. it converted this ability into a social network on which people can manage their contacts and communicate with them through photos. One way to plunge into this sector is for telecom carriers to acquire pioneer mobile social networking ventures. It has up to 60% repeat usage. T-Mobile and Alltel (now part of Verizon). a social networking gateway called LifeCache which is a mobile social network aggregator. Carrier Opportunity: Buying In (European Examples) Figuring out how—and who—will exploit this social networking/mobile opportunity now confronts the industry. Deutsch Telecom Group [T-Mobile]. home location) and opportunity for mobile commerce. identity profiles (e. If users take a picture. they can then upload it to any of the social networks they belong to. They “own” millions of consumers.g.com). the lifestyles their consumers have and what the consumers want to have access to.zyb. Newbay has license agreements with Orange/FranceTelecom.simbainformation. The system also works on the Web and mobile Web. A client application is either downloaded onto a cell phone or pre-embedded in a device. instantly.. It stores petabytes of user data on its systems. the data they have. the European carrier. bringing its potential customer base to 250 million users worldwide. Stamford. profiles and texting status updates. purchased Zyb in May 2008 for €31. Another company that has moved into that space is Dublin. The company has focused on enabling photos ©2008 Simba Information. currently about 20% of that audience uses Newbay’s product. licensing mobile network access and creating their own mobile platforms.5 million. They can become virtual private networks. Vodafone sees it as fitting within its “Total Communications” strategy of integrating the mobile and PC customer experience by adding to the communications services it offers to customers. a Danish firm that provides backup services for data and contacts on mobile phones. CT · 203-325-8193 · www. Newbay has partnered with US Cellular. As such. Vodaphone.

00 $7. One global revenue forecast for mobile UGC (by ARCchart) projects it will generate up to $6. An earlier study by Juniper Research identified similar.00 $1. nearly 10 times the current level.60 $5. but albeit slightly lower growth.00 $5.6 billion worldwide in 2012. Juniper Research ©2008 Simba Information. Bringing Ads to Mobile UGC (User-Generated Content) Throughout the Internet community. In both studies. ad revenue was a major part of the business model. which also included subscription and transactional fees. texting.com. there has been extensive focus on social media and “user-generated content” (UGC). Stamford.Opportunities in Mobile Marketing & Advertising 2008-2009 Social Media and User-Generated Content first because calling. Distribution systems such as YouTube and the capabilities of mobile phones to capture and transmit still pictures and motion video have fueled this UGC burst. 43 . contacts and photos are the four top things that people use cell phones for at this time. Advertising becomes part of their mix on the data download side with banners and sponsorships.00 $4. The major issue with advertising at this time is that it is without context or personalization. Copying Prohibited.00 $3.70 2007 2012 $0. CT · 203-325-8193 · www. ARCchart.00 $6.00 Sources: eMarketer.com. Mobile UGC Revenue ($ in billions) $0. Matching mobile advertising to UGC is already underway.1: Comparative Estimates.simbainformation. Table 6.00 $2.60 Juniper Research Aug 07 $0.70 ARC chart Jan 08 $6.

In this situation.com. banners. ©2008 Simba Information. Hence. CT · 203-325-8193 · www. the major challenge to advertisers is matching marketing messages with the highly personalized. Copying Prohibited.simbainformation. and often unpredictable. UGC-related mobile marketing may take on new forms—possibly putting a reliance on product placements or similar embedded marketing methods. UGC content and settings. Stamford. 44 .Opportunities in Mobile Marketing & Advertising 2008-2009 Social Media and User-Generated Content In the case of UGC. pre-rolls or other conventional Internet ad formats may not be effective.

which has responsibilities for consumer protection (including the Do-Not-Call regulations). Copying Prohibited. 45 . Moreover. CT · 203-325-8193 · www. additional issues may emerge that will affect the deployment of mobile marketing. tariffs. equal access by any service to communications networks. As the wireless and mobile phone industries grow and modify their operations. In other words. such as the ones operated by telephone or cable TV companies or wireless phone service providers. all content—including content that is supplied or financially supported by that carrier— faces the same operating conditions. federal oversight may affect mobile marketers. These network operators would not be able to put any content restrictions upon certain users of their networks.Chapter 7 Policy Considerations Introduction Mobile marketing is governed by many federal policies that cover wireless communications. as Congress reviews communications industry operations on topics such as “net neutrality” and wireless security.simbainformation. direct marketing and deceptive advertising reviews. The primary agencies whose decisions affect mobile marketing are: • The Federal Trade Commission (FTC). some anti-trust oversight and is deeply involved in telemarketing.com. Stamford. access and other rules. advertising regulations and consumer protection. Net neutrality assumes open. ©2008 Simba Information.

CT · 203-325-8193 · www. In addition to the federal jurisdiction. Congress has adopted and continues to consider legislation that may affect how mobile media is used for advertising and marketing. Thus. and the Florida Attorney General has filed charges against companies that offered ringtones via mobile messaging. Copying Prohibited. some state attorneys general have brought cases against marketers for sending text messages to mobile phones. Proposed legislation also affects privacy and security—especially personal information—which continue to be hot buttons in the mobile world. there is an effort to use autodialing (“robo-calls”) to reach such totally unwired customers. customers—including the growing number of phone customers whose ONLY connection is via a wireless phone. For example. spells out penalties for spammers and companies whose products are advertised in spam if they violate the law. Most such directories are now used for voice messaging. ©2008 Simba Information. rules that apply to wireline telemarketing also apply to mobile marketing.Opportunities in Mobile Marketing & Advertising 2008-2009 Policy Considerations • The Federal Communications Commission (FCC). private companies are developing directories of wireless phone numbers and selling such databases to marketers. which primarily oversees use of the airwaves (spectrum) and has also been involved in First Amendment (freedom of speech) and the Do-Not-Call oversight. establishes requirements for those who send commercial email. but comparable directories for text messaging will soon be available.simbainformation. Rules that restrict hours for calling and prohibit harassing phone calls apply to wireless as they do to wired communications. must use opt-in procedures at the domain level to authorize marketers to reach their mobile devices. Legislation. • For the most part. and the Department of Justice can further enforce its criminal sanctions. FCC rules also prohibit sending unsolicited e-mail to wireless devices. At the same time. The FTC enforces this legislation. Stamford. As technology expands for use by mobile marketers. 46 .com. the Illinois Attorney General’s office prosecuted a marketer for sending real estate text messages. Case law in these categories is still in its early stages. The FCC is trying to enforce these rules. such as the “CANSPAM Act of 2003” (Controlling the Assault of Non-Solicited Pornography and Marketing Act). and gives consumers the right to ask e-mailers to stop spamming them. notably consumer applications to be placed on the “Do Not Call” registry.

Copying Prohibited. the “spectrum auctions” of the past decade plus recent decisions.” are changing the way that companies can provide mobile services through a variety of devices. Companies such as Google. CT · 203-325-8193 · www. He singled out the difficulty of disclosure on a tiny screen. The white spaces decision.Opportunities in Mobile Marketing & Advertising 2008-2009 Policy Considerations Impact of FTC and Other Regulatory Restrictions FTC commissioner Jon Leibowitz cited four specific topics of FTC concern regarding mobile marketing in a May 2008 presentation: • “Disclosure” to assure that mobile customers understand what advertisers are selling and how much it costs. Stamford.” acknowledging that youngsters usually feel more facile and fearless when using technology.simbainformation. physical safety and personal privacy. satellite and many other wireless signals) are transmitted. “Location-based services” that permits physical location to be tracked in real time.” “Safety of children and teenagers. “Invasive marketing messages. such as the use of broadcast TV “white spaces. ©2008 Simba Information. 47 . but are often unaware of dangers such as mobile tracking and targeting.” Leibowitz concluded. but emphasized the need for government oversight to restrict and punish abusive mobile marketing companies. Spectrum Usage The FCC continues to oversee the rearrangement of the electromagnetic spectrum— the airwaves over which mobile phones (along with broadcast TV. offensive content and location-based services that enable the identification of where a mobile phone user is at any time. Intel and Microsoft have indicated an interest in developing services—which would inevitably include marketing components—via such unlicensed spectrum.com. enables use of unlicensed spectrum to be used for transmission of signals ranging from wireless microphones in theaters or stadiums to new mobile phone devices. • • • “Most responsible marketers are treading cautiously in this new space. including explanation of extra fees for SMS messages. The “Big Brother” potential and the real threats of stalkers “raise troubling issues about government access. Most notably. for example.” including text spam. and recurring charges.

The FCC and FTC. which may be specially enhanced mobile phones or other portable receivers. identify theft and similar threats posed from use of communications technology. the frequent and continuing examples of abuses and lapses—plus the hacking of protected systems— will continue to keep these twin issues of privacy and security in the spotlight. The role of the FCC in authorizing such services may be minimal. Department of Homeland Security and other agencies at the federal and state levels will continue to use their enforcement tools. ©2008 Simba Information. Copying Prohibited. Justice Department. Commerce Justice and other executive agencies will be led by Democratic appointees. 48 . Another evolving mobile technology—use of the Digital TV (DTV) spectrum. which will include mobile marketing capabilities. handheld devices. which have been headed by a Republicanappointed chairman and had three Republican members. The Open Mobile Video Coalition (OMVC) is an alliance of commercial and public broadcasters focused on mobile digital television. along with other wireless services. Privacy and Security Policy makers—especially Capitol Hill advocates—continue to raise concerns about personal information. Future Developments The political transition triggered by the November 2008 elections will inevitably affect policy making. Stamford. The Justice Department.simbainformation. Self-regulation and industry cooperation seem to be the best antidotes for government interference. The FTC. CT · 203-325-8193 · www. The FCC is monitoring a broadcasting industry collaboration to develop a system to deliver DTV signals from local broadcast TV stations to mobile. regulated by the FCC as part of the DTV transition in February 2000—raises another prospect for mobile marketing and advertising. will now shift into Democratic hands. personal. Issues such as net neutrality are part of this spectrum review and could specifically affect marketers as advertising and marketing content blends into the applications that may be subject to net neutrality obligations—or the absence thereof. Although most companies and government agencies are diligent about protecting their customers’ personal information.Opportunities in Mobile Marketing & Advertising 2008-2009 Policy Considerations The FCC decisions—which often face long-term appeals and court reviews—will affect the development and deployment of mobile marketing services.com.

standard rates and subscription rates. Opt-in and Opt-out policies.simbainformation. Customer care. Establishing of pricing categories such as free to-end-user. not clear. Copying Prohibited. The July 2008 version is posted on its site (www. interactive voice response. offdeck QWAP and other applications. The MMA updates its Consumer Best Practices Guidelines periodically. Chat guidelines. and Spending cap limits. many specific initiatives—including net neutrality (which the Obama campaign endorsed) and restrictions on marketing may be adopted during coming years. The impact on the nascent mobile marketing industry is. Guidelines for sweepstakes and contests.com/policies/consumer-bestpractices).Opportunities in Mobile Marketing & Advertising 2008-2009 Policy Considerations Although broad policy changes are unlikely. Stamford. Industry Response and Best Practices The Mobile Marketing Association has adopted Consumer Best Practices Guidelines that are intended to cover marketers’ use of SMS. The document is a compilation of accepted industry practices. as yet. ©2008 Simba Information. wireless carrier policies and regulatory guidance.mmaglobal. CT · 203-325-8193 · www. 49 . The MMA guidelines are an effort to establish self-regulatory practices and focus on several “hot button” topics including: • • • • • • • • Limits on unsolicited messages and consumer privacy. Marketing to children.com.

50 .simbainformation. Stamford. CT · 203-325-8193 · www.com.Opportunities in Mobile Marketing & Advertising 2008-2009 Policy Considerations This page intentionally left blank ©2008 Simba Information. Copying Prohibited.

the role of mobile communications in the Barack Obama campaign has prompted some to describe it as the “Celling of the President. 51 . Copying Prohibited. In particular. In some categories Internet usage was triple the levels of the 2004 campaigns. Obama for President 2008: “Celling of the President” After three election cycles in which the Internet was expected to play a significant role in the campaign process but ultimately was a marginal factor. compared to 2% who did so in 2004.simbainformation.” The Pew Internet Project found that a record-breaking 46% of Americans used the Internet. Text messaging was a fundamental ©2008 Simba Information. cell phone text messaging or e-mail to obtain information about the campaign. 2008 was the breakthrough year.com. about 6% of Americans made political contributions online. For example. particularly in the techheavy activities of the Obama campaign. Mobile communications played a major role in the efforts. Following are four examples from various segments. Stamford. CT · 203-325-8193 · www.Chapter 8 Case Histories of Mobile Marketing Introduction Every sector of the evolving mobile marketing industry has contributed to the practices and processes that are shaping the industry.

barackobama. tech-savvy Obama cadre subscribe to their wireless carriers’ “bulk text messaging” packages. A). although that figure varies widely. Most significantly. This established relationships with supporters.simbainformation. Casual and occasional users pay about 20 cents per message. It is assumed that many in the young. 2008) just before the Democratic National Convention began. whether it was a per-use fee or a click on the bulk bundled subscription fee).g. Supporters who logged in to the campaign’s primary Web site. the Obama campaign dispatched messages before local appearances. the link to “ask a friend to join”). Supporters who signed up for the service paid an average of 10 cents per message. From the Obama mobile server. In addition to the text alert for the Biden selection. which were automatically sent via e-mail to their desktop or portable devices. M.9 million people received that text message early on the Saturday morning (August 23. as well as on the eve of primary and general Election Days. For example.com—were automatically redirected to the .com.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing component of the plan. notably the announcement of Joe Biden as the vice presidential running mate. CT · 203-325-8193 · www. There was also a “thank you” message after the November 4 victory. This opt-in procedure enabled the campaign to identify its contacts.mobi site. with an M (for mobile) prefix—http://m. used on an opt-in basis. as well as news reports and social networking opportunities (e. An estimated 2. prior to the debates. the mobile site—like other Obama online components—permitted individuals to make financial contributions. For the mobile campaign. A.mobi. especially young voters. Stamford. the Obama campaign blasted text messages at key moments of their campaign. The mobile site also enabled supporters to request white papers and other documents. The mobile site invited visitors to “Get involved: Sign up for mobile alerts”—basically to register to the short code 62262 (the keypad numbers corresponding to the letters O. The Obama campaign has not officially released the number of supporters who signed up to receive mobile text messages and other online communications. supporters could download ringtones. Copying Prohibited. Users could also get candidate information—such as campaign stops and schedules. wallpapers and campaign videos. Each text message blast generated a cost for both sides (the Obama transmission and the individual reception). the Obama team set up a dedicated mobile Web site: http://obamamobile. One analysis of the Biden message blast concluded that ©2008 Simba Information. B. 52 .

170.000 Source: Silican Alley Insider Total Spent (at 3¢/message) $39.000.simbainformation.000 $1. ©2008 Simba Information. Strategically.000 $1.000 $390. Nike (9.1).4%).000 the total expense for that event could have ranged from about $1.000.000 500.350. the Obama campaign (36. The Obama campaign’s activities have been widely hailed as a prototype for the digital era. The Obama campaign gathered e-mail addresses. The interactive features enabled financial contributions and viral social media connections. Stamford.000 Total Spent (at 10¢/message) $60.1%) scored ahead of familiar brands such as Apple (27.000 $195.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing Table 8. securing relationships that can be used in future political efforts by Obama and other political allies.5%) was far behind. One objective of a political campaign is to build a contact list of supporters.000 $600.000 Total Spent (at 5¢/message) $45.2 million to $1. contributors.com. online shoe seller Zappos (14.000. The John McCain campaign (4. volunteer workers and other citizens.000 $300. depending on the fees for each individual message (in the range of 3 cents to 10 cents per message).800.1%) and Coors Brewery (8.3%).000 $2. the use of SMS—and online messages as well—represented an integrated marketing plan.000 3. which the Obama campaign exploited. Copying Prohibited.000 $225.000. If there were 5 million participants. CT · 203-325-8193 · www. In the polling of marketing industry executives.000 $450.950.95 million to $3 million (see Table 8. 53 .000 5.8 million.1: Estimated Cost of Obama Text Messaging Campaigns Number of people signed up 100.250.7%).000 $3. the range rises to $1.000 $1.000 1.000 $1. Among its attributes: it bypassed traditional media as a way to communicate with and energize a large and widely dispersed audience. phone numbers and other data about supporters.” citing the digital campaign and especially its mobile marketing component. Advertising Age declared Obama as the “Marketer of the Year.

it was opened to include Canada.com.S. www. the highest reported response rates in the industry.JohnMcCain. Paramount and MobiTV are among the brands that have advertised on the network. during that period. Nokia seeks to establish a mobile digital environment. 54 . Nokia Media Network's wide reach of the most desirable mobile audience is yielding click-through rates averaging 10% in certain channels. The Nokia Media Network originally served parts of Europe.) Nokia: A Manufacturer Supports Services Nokia.” The Nokia Media Network is a global aggregation of digital Web sites on which advertisers can place their mobile messages. One significant promotion for the McCain SMS capability came during the Republican Party’s convention: an SMS appeal to donate funds to the American Red Cross for victims of the hurricanes that were hitting the southern U. Millennial Media and AOL's Third Screen Media. Copying Prohibited. putting itself at the epicenter. and areas of Europe not previously reached. Brazil. Beyond that.” Nokia’s CEO OlliPekka Kallasvuo said in an October Information Week interview. ©2008 Simba Information. the global electronics maker and the largest mobile handset manufacturer.simbainformation. It competes with ad networks including Quattro Wireless. for now far more than any other provider. BMW. China. Scandinavia and Asia. Overall Nokia properties reach more than 100 million mobile consumers around the globe. has developed many tools and services to encourage mobile marketing and support mobile advertising. and we're making a conscious long-term effort to capitalize on that. but in February 2008. Mexico. (The Obama campaign also urged $5 text donations to the Red Cross during that period. It was difficult to find the SMS sign-up information on the primary McCain campaign Web site. There appeared to be few efforts to dispatch text messages consistently during the campaign. “It’s moving from a device industry to an experience industry. “The industry as a whole is in the middle of a transformation. but far less aggressively. thus adding value to the mobile experience. Nokia seeks to establish a “uniform ad unit and the ability to purchase and track campaigns” worldwide through this network. CT · 203-325-8193 · www. as a mobile advertising network— comparable to many existing online ad networks—it brings together brand-name Web publishers and enables marketers to place ads onto their mobile components. Stamford. Russia. The company’s underlying rationale is to make Nokia’s hardware more useful and desirable.com.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing The McCain campaign also used mobile marketing.

which include (in the U. location finders.” which stands for “Mobilize and Share. game platform N-gage. The campaign received an average click-through rate of almost 10%.. One of its units. such as Nokia MOSH (a social networking site.” Nokia designed banner ads that were served via the Nokia Media Network.) AccuWeather. Fox News. Twango and Ovi photo sharing sites. The group builds mobile-centric Web sites and services. based in Boston and London.S. Nokia Interactive Advertising. Bio Channel. which Nokia acquired in October 2007). mobile Internet sites. Stamford. adding dynamic information such as local fuel prices. Navteq has been visually enhancing its maps.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing Nokia brings the advertisers to the appropriate sites. CNET. see below) and Nokia. The Hollywood Reporter. as well as view the catalog and download branded wallpaper. History Channel. Additional properties. Its campaigns include banner ads. In the process. 55 . Unilever. A&E Network. click-to-call and other advanced mobile mechanics. Reuters and Agence-France Press.simbainformation. The banners led consumers to a D&G mobile Internet site where they could download the game to their handsets. Kraft. As part of the campaign.com. it establishes new social network platforms on which advertising can be inserted. Another operation to support mobile advertisers and content owners is Nokia Interactive Solutions (formerly known as enPocket.” MOSH offers a user-driven distribution channel for applications and other content for mobile devices. Another client.mobi. Discovery. ©2008 Simba Information. Hearst. Copying Prohibited. has quickly focused on location-based services. such as Sprint and Airtel. Nokia sees maps and the information associated with them as a vital component of mobile advertising and transactional services. D&G created the game “Dee&Gee. Nokia’s November 2007 acquisition of Navteq Corp. CT · 203-325-8193 · www. has created mobile campaigns for big brands such as BMW. Exemplifying the ever-closer relationship between advertising and content. The network also includes wireless operators. the Chicago-based maker of mobile mapping software (mainly used in automotive navigation systems). Dolce & Gabbana used mobile to promote the brand’s new teenfocused fashion catalog.1 billion deal gives Nokia a tool that can be offered for LBS advertising. mobile coupons. Hyundai. The $8. Ford and MTV Networks. which Nokia has either built or acquired. the campaign was tied to a Fashion Week event in Milan. include Navteq and Gate5 GPS navigation services. Nokia has accelerated its development of “MOSH. The networks also include Nokia properties. and other providers which offer services and opportunities for advertisers.

This includes RFID (Radio Frequency Identification) chips that can recognize and handle a secure payment opportunity and transmit data to the customer’s financial account. Through a two-way SMS process.S. Such micro transactions via mobile phone. often positioned as “Web development partners” or providers of creative and media planning services. Kinetic Mobile: A Focused Ad Agency Advertising agencies have been at the center of interactive media development. the player was eligible to win tickets to a football championship. For another image recognition campaign. Nokia’s partners posted photos of a goalkeeper in front of the goal net. If the shot got through. The process then took users to a site that showed where the shot actually hit and whether the goalkeeper stopped it or allowed the ball to reach the goal. It also secures relationships on multiple levels with media.simbainformation.com. include purchases from vending machines and public transportation fares. already being tested in Europe and Asia. cities by the end of 2008. Nokia created a Formula 1 racing contest. participants found out the correct photo matches and also were able to enter a drawing to win tickets for a Grand Prix race. Copying Prohibited. Nokia’s support of mobile-based marketing development mirrors similar industry support efforts from other handset makers. the challenge for Nokia/Navteq will be developing these features without introducing unnecessary costs into the process. The risk may be in isolating its own services from those delivered to customers using other handset technology. such as parks and community information in up to 90 U. some have specialized in mobile marketing services or spun off a subsidiary to focus exclusively on the mobile market. ©2008 Simba Information.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing Navteq is also adding “deeper details” about local facilities. the company validates the capabilities of mobile platforms. In one project for a football (soccer) championship. CT · 203-325-8193 · www. conducted with Vodafone (the European mobile carrier). marketing and advertising companies. Participants were asked to match the childhood photo of a star racing driver with his current celebrity picture. Another Nokia marketing project involved the use of mobile commerce. Stamford. Participants were told to use their camera phones to indicate where the ball should go. Nokia is also exploring how to integrate mobile payments—primarily micropayments—with the Near-Field Communications (NFC) capabilities being installed into phones. In the past decade. Nokia has tested an “image recognition” system that has been used in several European advertising campaigns. Although LBS advertising is a goal in this effort. In doing so. 56 .

paper coupons will become a thing of the past. based in New York and London. CEO of Kinetic Mobile. Copying Prohibited. CT · 203-325-8193 · www. Michael Collins. Automotive. Collins added. 57 . and Travel. expects that entertainment advertising— ranging from cinema trailers and showtime listings to music and games—will remain the mainstay of the mobile marketing sector for several more years. Retail and consumer packaged goods. referencing the development of location-based systems and m-commerce capabilities. He characterizes mobile entertainment as “entertainment snacking. The agency is also focused on the “user experience” for mobile—which is a much more important factor than the user cost. It was hatched within Kinetic Worldwide.com. management concentrated on the categories to serve. Collins explained. citing the value ©2008 Simba Information. “Dollars will open up as soon as we bridge the POS (point-of-sale) issue. he added. In early 2008. such as British Airways. “Mobile can deliver a cheaper cost per lead” than other media. a global ad/marketing agency that specializes in “out of home” media (including billboards and transit signage). which helped organize its structure: • • • • • Entertainment. “Mobile is what you do while you’re waiting to do something else. Stamford. because mobile lends itself to new forms of entertainment. Acknowledging that these steps will require additional intelligence in handsets plus more precise targeting systems.simbainformation.e. When new scanners are deployed. until about 2011 or 2012) to develop the mobile market for consumer packaged goods. a category with a modest and sporadic presence online. Kinetic Mobile was spun off as a separate entity. Collins expects that it will take at least two to three years (i.” with customers typically spending two to seven minutes per day on various entertainment-related messages. to focus on mobile marketing. Kinetic itself is jointly owned by the massive WPP Group and its own management team. retailer Tesco.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing Kinetic Mobile is just such an agency. It brought with it clients from its out-of-home parent.K. That experience is one reason that Collins sees great opportunity in retailing and consumer packaged goods. Visa and U. In setting up the mobile-focused agency. Driving Kinetic Mobile’s interest in mobile advertising is its economics.” Collins said.” he said. Financial services.

Google’s Android platform and other smartphones. Collins looks forward to a “richer. Although Collins is upbeat about travel opportunities. Collins said. In part. as an agency executive focused on mobile marketing and advertising. high-fidelity experience” for ads on the iPhone. which affects the industry’s “fundamental underpinnings. Design can be labor intensive. would ripple out to travel services—again. This. despite the graphic limitations. largely because of the direct response capability.simbainformation. he hesitates to predict how large a category it will become on the mobile platform.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing of that capability during a period when “ad dollars have to work harder. in turn. and thus expensive while the scale of potential users is relatively small. which further restricts some deployment. its success depends on GPS capabilities—which would suggest that the widespread deployment of location-based services.” Such volatility raises the bar to making long-term business decisions and deploying capital when companies cannot assure the opportunities and prices that will be in place a year or two into the future. He cites Verizon Wireless’ recent decision to impose an additional 3-cent tariff on every text message. The cost of developing advertising for the mobile platform is also a challenge. “You can take in life patterns. which Collins expects. depending on the definition of such ad campaigns. creates a better dialog. ranging from “online test drives” to promotions via ©2008 Simba Information. get to people [where] they are living their lives. more persuasive than a desktop experience. 58 . Apple’s iPhone has recharged such clients during the past year. Stamford. Copying Prohibited. Hyundai Motor America: Integrating Mobile Into Launch Campaign The automotive industry has aggressively used “new media” for sales and marketing efforts for more than 20 years. For some projects. Kinetic Mobile recognizes that its clients (and its own operations management) must make decisions based on many evolving factors. Collins believes that users are excited about the new ways to reach clients through mobile devices.” He acknowledges that mobile media does not allow advertisers to be as visually creative. For an advertising agency in a volatile climate. The introduction of faster 3G networks and compelling content will spur that experience. he said.” Collins said. yet the mobile phone is very engaging in other ways. CT · 203-325-8193 · www. Nonetheless. it is hard to do a cross-carrier media buy.com.

made a sizeable commitment when it pursued an integrated cross-platform campaign—including mobile advertising—to launch its upscale Genesis line of cars. in comScore's 2008 Super Bowl post-game survey. It is estimated the industry spends more than $500 to attract a prospective customer into a dealer’s showroom via brand advertising and promotions.Opportunities in Mobile Marketing & Advertising 2008-2009 Case Histories of Mobile Marketing Internet and wireless platforms. Hence Hyundai Motor America. including the sound of the engine’s “rev.” The integrated marketing campaign also featured banner ads that clicked through to the Genesis mobile Web site. It demonstrated how to integrate mobile advertising into a complete ad campaign. The entire campaign—including mobile and other media—was intended to raise brand awareness. Hyundai was able to capitalize not only on the days leading up to the Super Bowl itself. The Hyundai mobile campaign featured downloadable wallpaper (images of the new vehicle) and ringtones. While those factors were not solely due to the mobile component. the auto industry has been challenged to match new media to the type of vehicle (including price range) aimed at its target audience. One element of the campaign was a mobile initiative coordinated with Hyundai’s two video commercials during Super Bowl XLII in February 2008. subsidiary of the Korean automaker. In particular.com. said that the click-through rate for the mobile site averaged 3. Hyundai garnered a 45% increase in net brand improvement. Stamford. 59 . but leveraged the after-effect as the brand-sponsored wallpaper and ringtones continued to offer brand identification after game day. Hyundai and its mobile advertising provider.” ©2008 Simba Information. giving the carmaker a live lead to follow-up for subsequent sales efforts.” Additionally.simbainformation. where users could find the downloadable content. CT · 203-325-8193 · www. the highest of any automotive advertiser. the U. which it sought to position against BMW and Mercedes. Hyundai ran cross-promotional ads on the Web to encourage viewers to text in an SMS shortcode that led them to the Genesis mobile Web site. Nokia Interactive Advertising.4% and called the results of the test campaign “very encouraging. Copying Prohibited. Post-game research by the Nielsen Online MegaPanel Survey found that 43% of respondents had improved their opinion of the Hyundai brand. the highest figure of any Super Bowl advertiser.S. Hyundai executive Eric d’Ablaing contended that the Nokia Network’s “prime ad placements and quick delivery of a high quality campaign” contributed to “outstanding results. 11% of people who clicked through to the Hyundai banner ad submitted their e-mail address to get the free “RevTone” downloads. In addition. so automakers and car dealers constantly seek to make those costs more productive.

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Copying Prohibited. a coupon appears that can be redeemed by showing the screen at the store’s checkout counter.simbainformation. Deals show up on the phone as logos. 61 . CT · 203-325-8193 · www. is expanding its mobile payment services in late 2008 by using the Android operating platform developed by Google.com. a • ©2008 Simba Information. including notification about special deals from marketers and use of a “locator feature” (powered by Google Maps) to find the location of the nearest retailer offering for that deal.” which was designed and managed by Qponix. a Michigan-based supermarket chain. an intriguing array of ideas are emerging. developed an interactive “widget” called “MealBox. The first services developed for Android allow Chase Visa cardholders to opt in and receive notifications to their mobile devices about activity on their accounts. Meijer Inc.Chapter 9 More Examples of Mobile Marketing Projects and Experiments In the early stages of any technological opportunity. and when the customer clicks on that logo. Stamford. Visa plans to develop similar services for other card-issuing financial institutions. so to speak. Here is a random and very limited roster of the kinds of services that are being implemented: • Visa Inc. pioneers try out all sorts of ways to use the new platform to reach their target audiences. for mobile marketing and advertising. The partnership opens the door for Visa itself to use mobile marketing.. As marketers test the airwaves.

Opportunities in Mobile Marketing & Advertising 2008-2009 More Examples of Mobile Marketing Projects and Experiments Seattle Web developer. • Sears2go.C. which • • • ©2008 Simba Information. local auto dealers and (for the Philadelphia-area service) the local tourism authority. 88% watched a video.” and 9% entered their zip codes. Kansas City. which Land Rover considered significant. is collaborating with the NBC television network to launch “Mobileyes.com Web site. tools. Land Rover ran a mobile campaign aimed at affluent males. Detroit. Hartford. The Chicago Tribune Media Group recently expanded its mobile classified advertisements by launching Automart Quickfind. Copying Prohibited. electronics/ computers and fitness/sports. toys and games. Initial advertisers include McDonald’s. 3rd Dimension Inc. a service that sends out detailed information to mobile phone users about specific vehicles listed in the newspaper’s Saturday auto section.” a mobile advertising network that includes live video transmission of road and traffic conditions in several cities. a mobile services network. Powered by Usablenet. Of the qualified leads.com. Sears2go offers additional features from the Sears. Los Angeles. Washington. CT · 203-325-8193 · www. Stamford. using the dealer-locator module. Sears2go allows customers to shop from categories such as apparel. While the video is loading from the requested real-time highway traffic cameras. Although initially developed for online sites. within appropriate Web sites and can generate a shopping list based on realplanning and recipe selections made by the customer. Customers can save a list of coupons on the handset and have the device scanned at the checkout register in the store. 3% used “click-to-call. 3rd Dimension serves an advertisement from the new Mobileyes Advertising Network. jewelry. When a customer makes a purchase. a mobile commerce site from the Sears department store chain enables shoppers to find and buy selected Sears. D.. Houston. Twenty-three percent of those who clicked through to the landing page responded to at least one call to action. Meijer adapted the application for the iPhone. Mobileyes is initially available in New York. Sears sends a text message alert when the merchandise is ready for in-store pickup. store locators and promotional offers.simbainformation. specials and other deals.com merchandise from their handsets. Knoxville and Indianapolis. 50% of the click-to-call connections generated voice conversations of longer than 30 seconds. MealBox offers coupons. 62 . The set-up enables users to send an SMS containing a code for a car featured in the Tribune’s Automart section. The system includes a geotargeting capability so that an advertiser can push an ad related to the direction in which the customer is heading. including product reviews.

Opportunities in Mobile Marketing & Advertising 2008-2009 More Examples of Mobile Marketing Projects and Experiments

triggers the system to send photos of the vehicle, the seller’s contact information and driving directions to the seller’s location (usually an auto dealership). • When Penguin Books published Slam, the latest novel by Nick Hornby (and his first novel aimed at teenagers), it created a mobile campaign that involved downloadable audio of celebrity voices via the Blyk mobile network. Blyk created a two-part messaging dialogue whereby positive respondents received a 90-second audio preview of the book’s first chapter, read by a national TV star; this marked the first time audio clips were sent via mobile to promote a book. The campaign generated a 67% response rate. Diageo ran a special mobile service to promote Smirnoff, its premium vodka brand. The campaign, developed by the digital agency AKQA, offered a “pocket guide to vodka” plus entertainment and lifestyle tips, which were integrated with mobile portals and lifestyle sites. The content on the mobile site combined useful information and branding; a section called “Pocket Bartender” provided a collection of Smirnoff Signature cocktails and a “Vodkapedia” explained facts and information about the subject of Vodka. The U.S. Navy launched an innovative “click to video” mobile campaign intended to raise awareness of opportunities in service. The ads ran on mobile sites in categories such as entertainment, sports, news and weather. The campaign, designed by Third Screen Media, was sent out with an “auto-play” feature to the phone-enabled, and included a click-to-call banner. The Navy received a click-through rate of more than 3%. MINI USA (for the Cooper Mini automobile) expanded its “Hammer & Coop campaign to include a mobile component—a series of short episodes that can be seen on a branded mobile content channel on Sprint and WAP sites in the Ad Infuse network. The network can insert 15-second and 5-second video ads on associated podcasts. The campaign features segments about two crime fighting characters, Hammer and Coop, with Coop being a MINI Cooper S. For location-based services, a vital issue is where users are when they access their mobile service. A study done in collaboration with the Vancouver (British Columbia) Transit Authority analyzed SMS requests for bus schedule information. The greatest number of requests originated from major intersections in downtown Vancouver where the buses stop very often; many of the hot spots tracked corresponded with bus shelters that had full-size “call

©2008 Simba Information, Stamford, CT · 203-325-8193 · www.simbainformation.com. Copying Prohibited.

Opportunities in Mobile Marketing & Advertising 2008-2009 More Examples of Mobile Marketing Projects and Experiments

to action” posters suggesting that passengers could obtain schedules via text message. There were far more requests for schedule information in the entertainment and business districts than in suburban/commuter locations where regular passengers seem to know the schedules. • Blyk is a mobile network for 16- to 24-year-olds, aligning young people with brands they like and awarding them free text messages and usage minutes every month. The ad-supported service is available only in the U.K. (2008), with plans to expand pan-European during 2009 with the potential to reach over 40 million young consumers. Among its advertisers are Brylcreem (for its “b:” hair care products aimed at young males), Penguin Books and music companies. Gawker Media, a youth-oriented Web publisher whose sites include Gawker, Defamer, Jezebel and Gizmodo, partnered with mobile ad network Quattro Wireless to run mobile sites across its properties, five of which are exclusive for the iPhone. Ketel One, the vodka maker, negotiated with Gawker about running an exclusive mobile campaign on its site.

Additionally, advertising agencies are extending their capabilities to serve the mobile marketing business. • Omnicom Group established “Mobile Behavior,” an agency focused on matching advertisers to the right audience by understanding consumers’ mobile experiences and expectations. The practice will work with Omnicom’s agencies on projects for various clients. Rhythm NewMedia focuses on serving mobile in-video ads in partnership with more than 60 media companies, several top tier mobile operators and dozens of brand advertisers. Rhythm's services include ad sales, ad serving, custom iPhone and smartphone application development, mobile site design and overall video management. Rhythm, based in Mountain View, Calif., and New York City, recently launched vSNAX Videos, a free entertainment application for Apple's iPhone and iPod touch, to showcase Rhythm's ability to develop user experience, groundbreaking ad units and high quality streaming. Clients include Mazda, BMW, Puma, Toshiba and Paramount Pictures.

©2008 Simba Information, Stamford, CT · 203-325-8193 · www.simbainformation.com. Copying Prohibited.

Chapter 10
Mobile marketing—including advertising—remains on track to grow revenue by 20% to 25% annually between 2009 and 2013, reaching at least $6 billion in the U.S. by 2013. The velocity of that growth will be determined by several factors: • Customers using smartphones which permit greater graphic and interactive (transaction) capabilities. Marketers shifting their budgets into mobile-specific services. Technology improvements that assure security and accurate measurement of mobile marketing activities. Economic conditions (the biggest uncertainty of this period) which enable expansion of services and experiments with new technologies.

• •

Identifying the scale and velocity of mobile marketing growth remains the most challenging task for every sector involved in the business, including the carriers and equipment makers that control the infrastructure of the wireless communications business. Mobile marketing is currently at the point where online Web advertising was about a decade ago. This is significant because mobile marketing is in many ways an off-

©2008 Simba Information, Stamford, CT · 203-325-8193 · www.simbainformation.com. Copying Prohibited.

Marketers may be swept into such a battle if they are forced to take sides under pressure for exclusive deals. 66 . Copying Prohibited. mobile marketing has attributes—notably the always on/always present mobility factor—that distinguishes it from desktop-anchored services—in much the same way that Web interactivity differentiated it from conventional direct response or brand advertising. users of “the other” device). economy. despite the turbulent U. Competition. including the feature-creep prospects of a full-out battle between Apple (iPhone) and Google’s Android platform. While most marketers would want to avoid cutting out potential markets (i.com.simbainformation.e.S. Competition will also include technology turf wars. • Regulation may play a bigger role in industry development. Adoption of smartphones or development of other innovative transceiver devices that can be used for marketing delivery at affordable prices. Convergence. The consensus outlook of organizations involved in the business—such as advertisers. FTC and in Congress could affect segments of the mobile marketing industry. such as the platform war between WiMax and LTE (Long Term Evolution) wireless broadband technologies. The new Obama administration is tech-savvy. migrating to a mobile platform.Opportunities in Mobile Marketing & Advertising 2008-2009 Conclusions shoot of Web marketing. notably equipment makers and some carriers. • • The rapid acceptance of mobile marketing. and has indicated a commitment to re-asserting control over many of the telecom and media sectors that have been unleashed in recent years. which may affect marketers’ decisions on when to move into this sector. advertising and commerce assures a significant place for these services in the digital business arena. such decisions may have to be made. CT · 203-325-8193 · www. Stamford. Actions at the FCC. agencies and media planners—is for growth during 2009 and 2010. An October 2008 Internet Advertising Bureau survey of 115 organizations found that 62% expect an increase in mobile marketing spending during this period. ©2008 Simba Information. Overall. especially the integration of marketing/advertising into entertainment content. the wireless mobile industry will be affected by developments in several key areas: • • Consolidation at all levels. At the same time.

Copying Prohibited. but more engaged and relevant audience. Stamford.simbainformation. not simply consumers’ click-through response. • • There is plenty of room for more experimentation and implementation as marketers and consumers become more aware of and comfortable with the opportunities of mobile marketing. particularly on the post-mobile interaction. via mobile platforms than they could reach on TV or other media. For mobile marketing to prosper as quickly as proponents hope. and nearly half plan to purchase such a device within the next two years. About one-fifth of mobile consumers now use a smartphone. which will deliver stronger marketing services.Opportunities in Mobile Marketing & Advertising 2008-2009 Conclusions At the same time. Marketers will have to expand their view of mobile advertising’s effect on consumers. Such disagreements may discourage marketers from plunging deeper into mobile marketing until these differences are resolved. Carriers will have to decide if “on-deck” services provide a sufficient experience that will encourage marketers to embrace mobile marketing. 67 . ©2008 Simba Information. several component industries will have to rethink the ways they operate. CT · 203-325-8193 · www. Nonetheless. the outlook for mobile marketing appears strong—based on the acceptance of young mobile phone users and the adoption of smartphones. • Advertisers will have to determine if they prefer to reach a smaller. the diverse segments of the industry—although claiming to seek collaboration and cooperation—have diverse objectives.com.

Copying Prohibited. 68 . CT · 203-325-8193 · www.simbainformation.com. Stamford.Opportunities in Mobile Marketing & Advertising 2008-2009 Conclusions This page intentionally left blank ©2008 Simba Information.

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