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Analysis of Current Mobile Marketing Applications, Selected Best Practices and Future Development

Master's Thesis 2010 70 Pages

Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media

Excerpt

Table of Contents

A. Introduction
I. Problem Statement

B. Background Information
I. Distinctive Aspects of Mobile Marketing
II. Mobile Marketing Ecosystem
III. Factors Effecting Consumer Attitude towards Mobile Marketing
IV. Measurement Fundamentals of a Mobile Marketing Campaign

C. Analysis of Current Mobile Marketing Applications
I. SMS/MMS Marketing
1. SMS/MMS Messages and Newsletters
2. Mobile Coupons
3. Text-to-Win Campaigns
II. Interactive billboards
III. Quick Response (QR) Codes
IV. Bluetooth Marketing
V. Mobile Web Sites
VI. Augmented Reality
VII. Advergaming
VIII. Ring Back Tones
IX. GPS Marketing
X. Mobile TV

D. Analysis of Selected Three Best Practices
I. “Tonla Kazan” (Tone & Win) - Turkcell
II. "Together Everywhere” - Puma
III. Lonely Planet Compass Guide

E. Future Development of Mobile Marketing
I. Mobile Outlook
II. Key Success Factors of Mobile Marketing
1. Design
2. Implementation
III. Future Transition of Mobile Marketing

F. Conclusion
I. Limitations of the Research
II. Recommendations for Further Research

Bibliography

Attachment

Table of Figures

Figure 1 Mobile Media Usage

Figure 2 Advertiser Optimism Next Six Months

Figure 3 Mobile phone subscribers who only use voice services

Figure 4 Mobile Marketing Ecosystem Members

Figure 5 Apple App Store Corporate Application purpose (%)

Figure 6 SMS Response by Medium (M: Metric 2007 Research)

Figure 7 Mobile Coupon Sample at “Coufon” Mobile Coupon Advertising Network Application

Figure 8 BBC Interactive Billboard

Figure 9 An example of a Quick Response (QR) Code

Figure 10 Preferred Consumer Electronics of US Internet Users

Figure 11 Annual shipments GPS-enabled handsets (Worldwide 2007-2012)

Figure 12 Puma “Together Everywhere” Campaign Visuals

Figure 13 “Lonely Planet Compass Guide” Campaign Visuals

Figure 14 Comparison between Japan and Rest of the World (ROW), Mobile Internet Revenue Mix

ABSTRACT

This study fundamentally attempts to investigate current mobile marketing and advertising market, to examine current mobile marketing applications and to analyze three selected Best Practices and the future development of mobile marketing.

The study consists of five main sections. First section consists of two parts, namely Introduction and Problem Statement. Introduction part covers a brief presentation about the subject of the study and the research objectives. And Problem Statement part discusses the stimulating factors to apply this research. The next section, which is Background Information, discusses the structural frame and the distinctive aspects of Mobile Marketing, the factors influencing consumer attitude towards mobile marketing, as well as measurement fundamentals of mobile marketing campaigns. This is followed by an Analysis of Current Mobile Marketing Applications including three selected Best Practices. Subsequently, Future Development of Mobile Marketing section explores the anticipations of the way towards which Mobile Marketing progresses and how the mobile technologies shape the development. Too, Key Success Factors of Mobile Marketing are investigated in this section. Finally, the fifth section concludes with a discussion about key findings of the study. Limitations of the Research and Recommendations for Further Research are provided to highlight the study.

The writer pays attention that the study comprises her own reflections and original contributions.

Keywords: Mobile Advertising, Mobile Marketing Applications, Best Practices in Mobile Marketing, Key Success Factors of Mobile Marketing, Future Developments on Mobile Marketing

A. Introduction

Mobile Marketing Association (MMA) defines mobile marketing as “a set of practices that enables organizations to communicate and engage with their audience in an interactive and relevant manner through any mobile device or network”.[1] To be able to reach to customers and prospects ubiquitously at each time and attract their attention ...By means of mobile marketing these two challenges are not very significant challenges any more for the marketers.

The study objectives are principally indicated as the following:

- Investigation and evaluation of the mobile marketing ecosystem and the platforms
- Investigation of the factors which affect consumer attitude towards mobile marketing
- Investigation of the interaction between traditional marketing and mobile marketing
- Analysis of the current mobile marketing applications
- Determination and analysis of three selected best practices of mobile marketing
- Defining the size of current mobile industry and the anticipated market development rates for the next years
- Defining the key success factors of Mobile Marketing
- Investigation and analysis of the future developments in Mobile Marketing

I. Problem Statement

Mobile marketing has been investigated as confined to SMS marketing or text- to-win campaigns in most of the researches. To be able to understand mobile marketing comprehensively, this study tries to analyze mobile marketing in a broad aspect with regard to all applied mobile devices.

Mobile marketing mediums much more allow targeted marketing, whereas traditional marketing mediums such as TV or radio are more attributable to generic advertisements. In this respect, mobile marketing has a remarkable function to decrease marketing costs, as it eases to reach the target group. Return on Investment (ROI) of mobile marketing is higher than traditional marketing, thus a deep research about how mobile marketing can be moved to a further step would be an essential requirement for the field of marketing. Furthermore, the measurability of ROI on mobile marketing is more effective through response rate of the consumers.

Other stimulation is that traditional marketing channels are very much penetrated and their distinctive characteristics on customers’ perception have been in decrease. However, people are more sensitized to mobile marketing channels as it has not yet reached to its maturity stage. To be able to keep up with the attraction of the prospects and the customers, marketing should shift from the point where people are desensitized to further stages which is most popularly mobile marketing. Leverage power of mobile marketing on traditional marketing, through integration of both, makes this subject once again worthy to be investigated in depth.

B. Background Information

According to “The Mobile Internet Report” of Morgan Stanley Research [2], the fifth mobile internet cycle of the last half century is currently starting. The report indicates that winners of the cycle will create more capitalization in the market, whereas some others will try to survive or will fail; simply it is expected that there will be a milestone in mobile marketing with a natural selection process.

Number of mobile phones globally (3.3 billion [3] ) is more than triple of total PCs worldwide (1 billion[4] ), which are usually not used personally as contradictory to its name “Personal Computer”, but as collectively. Thus, mobile constitutes an extensively bigger media platform than PCs for marketers. Mobile phones have become “one-stop-shop” media centers, which end-users utilize for many purposes such as browsing for information, listening music, playing game, watching video and TV, sending/receiving e-mails, engaging in social networks, etc.; as it is shown on Figure 1 (Mobile Media Usage).

I. Distinctive Aspects of Mobile Marketing

As Strategy Analytics, Inc. indicates as the following, mobile have different characteristics and opportunities than which is in desktop world. “In order to take advantage of the opportunities in mobile content, developers and designers need to be aware of the ways in which the mobile content business practices differ dramatically from those of the desktop Internet world. In particular, the operators of mobile networks exert a degree of control over the distribution and use of content that has no analogy in the desktop environment.”[5] (Strategy Analytics, Inc., (2008). One of these discrepancies is that mobile is the most intimate one, among all marketing channels; as it is mostly attributable to a single person, which allows marketers to apply very personalized marketing programs. Especially when discussing mobile phones, they are like clothes

since people carry them all day as turned on. Nevertheless, mobile marketing may be regarded as composed of only SMS marketing at first sight; however its scope is much broader than SMS Marketing. And it does not comprise only basic mobile phones, but also Smartphone, GPS devices, GPS-enable phones, Tablet PCs (portable computers smaller than laptops). Developments in network technologies, especially the emergence of 3G (third generation) technology, which allows about six times faster data transfer compared to 2G (behind technology is GSM) and 2.5G (behind technology is GPRS) networks[6], have expanded the scope of mobile marketing. Mobile devices are featured with many functions such as wireless and internet connection over 3G, camera, video and music player, Bluetooth, etc. Thus, versatility of mobile devices provides a myriad of marketing opportunities such as Bluetooth Marketing, Location Based Marketing, Web, SMS, MMS, Quick Response (QR) codes, and so forth.

Another vital aspect of mobile marketing, the interactivity, pulls the customer and the prospect to engage into the marketing process. The higher involvement enables the higher attraction by the prospect. Given the mobile marketing allows immediate action, it is very appropriate especially for launching time- limited campaigns, offers or coupons. Instantaneousness of the interaction between consumer and the brand expedites the purchasing process; therefore marketing spending would be much effectively utilized with higher conversion rates, compared to traditional marketing. And targeted marketing is the most distinctive aspect of mobile marketing compared to other marketing types. The customer or the prospect must provide the correct mobile number corresponding to him to be able to engage into the marketing process. Demographic information is reachable through mobile operators or advertising platform associates .[7] Thus, an accurate customer database which enables filtering based on gender, income, age, region and etc. is easily created.

Mobile marketing accelerates the effectiveness of traditional marketing channels, i.e. traditional media, newspapers, magazines, TV ads. Figure 2 (Advertiser Optimism Next Six Months, Feb 2009) shows that the advertisers are getting more pessimistic towards traditional media such as newspapers, TV or radio. The report indicates that a high proportion, 58 percent of the marketers and 52 percent of the marketing agencies sampled, plan to increase their advertisement spending on mobile. The spending on mobile marketing may bring contributions to revive traditional media too; besides mobile marketing enhances itself. The vital point is to be able to think all of the marketing channels as integrated, and to fit mobile as a binder in-between other marketing channels; with the right applications such as mobile-interactive billboards, SMS campaigns on TV, wallpaper and ringtone ads on TV. The analysis of the above indicated and additional applications will be analyzed in further Section C. Beyond all above indicated opportunities and advantages, brands become associated with a new media, which may refresh their brand personality.

II. Mobile Marketing Ecosystem

To be able to understand the mobile world; understanding the structure of mobile ecosystem, key players and the relationship in between is essential. Mobile ecosystem is a set of players consisting of content owners and distributors, publishers, aggregators, mobile device manufacturers, mobile operators, marketers and advertisers, developers and designers, end users and regulators. As the mobile marketing industry has not yet reached to maturity stage, ecosystem is currently complex and fragmented. And mobile ecosystem has been expanding as new players are emerging in a rapidly circulated mobile marketing environment.

On the following, principal aspects of the key ecosystem members are discussed.

Mobile device manufacturers are vital players in mobile ecosystem. Mobile device designs have impacts to determine the limits of mobile marketing applications. That is to say, the capabilities of mobile application developers and end-users are highly depending on the technical features of the mobile devices such as processing power, operating system, battery life, screen resolution, and so forth. Therefore, mobile device manufacturers strongly influence the roadmap of mobile marketing.

Mobile application developers and designers are the other important members of the ecosystem, who supply mobile applications either as default embedded to the mobile device or ready to install, as well as to be used online. The biggest challenge for the mobile application developers and designers is that standardization for the mobile software and hardware has not yet been emerged. Too, having no proper standardization confuses the end-users’ mind. Unlike the status quo; mobile application developers and designers should receive a remarkable part of the revenue in mobile marketing ecosystem, as they bring innovative and breakthrough developments to mobile marketing.

Marketing agencies are trendsetters who determine how mobile technologies can be utilized in order to apply mobile marketing programs tailored to the brand identity and wishes.

Content providers are consisting of organizations (e.g. Motion Picture Association of America), companies (e.g. Sony Music Entertainment) or persons (mobile subscriber) who supply mobile content such as ringtones, games, discount offers, videos, comments about a product provided on the mobile platforms and so forth.

Publishers are the owners and managers of content delivery platforms. And aggregators are the intermediaries between the content providers, publishers and end-users. Aggregators enable connection with the mobile operators. For instance; with regard to Nokia Music platform (http://www.nokiamusic.co.uk), Nokia has a role as the publisher; music agencies and singers are the content providers and the information technology companies/agencies which develop[8] and design the platform and provide the technical infrastructure are the aggregators.

Mobile advertising networks and mobile content promoters bring together advertiser brands and advertisement publishers on mobile platforms. Publishers make agreement with advertising networks to rent ad spaces on their mobile web sites. And when advertisers apply advertising networks; networks like AdMob match the relevant ad spaces on the web sites of publishers with the advertisement of the advertisers. Publishers get revenue by publishing advertisements on their mobile web sites and give remarkable share of this revenue to the advertising networks. One of the biggest mobile advertising networks is AdMob. It has been acquired by Google for US$ 750 million in November 2009[9]. This was the fourth biggest acquisition of Google[10]. AdMob serves graphical banner and text link ads on mobile web pages for more than 15,000 mobile sites[11] and applications. AdMob has served over 100 billion ads since[12] launching in January 2006 . For each ad served, AdMob leverages handset and operator data, which enable demographic, device, and operator targeting for advertisers. Publishers want to better understand mobile data use by operator and by device to target their content and optimize their site performance. Advertisers want to understand demographics and device capabilities as they plan their campaigns accordingly.

Mobile operators have a high level of control over the consumer data. Mobile operators lead technologies and infrastructural developments which shape the future of mobile marketing. Mobile flat rate internet is very important to increase the usage of mobile internet. That 97 million people, who accounts for 90 percent of Japanese mobile subscribers use mobile internet, may be associated to high penetration of mobile internet[13] flat rate. Mobile operators fulfill a role of providing education to the customers about mobile marketing application and technologies, as well. This role is vital to accelerate mobile adoption of the consumers.

Regulators are the institutions who determine the directions, instructions and guidelines of mobile marketing, e.g. Mobile Marketing Association (MMA). They have impacts on the development pace of mobile marketing. Regulators are essential components of mobile marketing ecosystem, as they play a protective and balancing role both for consumers and companies.

End-users not only make voice call (See Figure 3 (Mobile phone subscribers who only use voice services)), but also to engage into mobile world either to save or pass time, i.e. to easily and quickly reach the information, product or service, etc. or to access to games and entertainment services, etc. End users are content owners too as they can disseminate the content, maybe not professional but creating word of mouth effect, via mobile social networks. End-users may provide content to mobile marketing platforms, i.e. a picture/video of the customer while using the product/service, or the feedback about the product/service as voice response to the brand. By this way, an interactive communication can be accomplished between brand and the customer.

Mobile marketing ecosystem members are shown at a glance on Figure 4 (Mobile Marketing Ecosystem Members).

III. Factors Effecting Consumer Attitude towards Mobile Marketing

Consumer attitude toward mobile marketing applications and campaigns may differ depending on the demographic variables such as age, education or income level of the consumer, etc. For instance, researches show that young people have very positive attitude towards mobile marketing, whereas older people is more reluctant to have mobile advertisements and more cautious about their privacy.[14] Accordingly, marketers should consider the demographic classification of the consumers when designing and implementing mobile marketing programs. However; independently from the demographic aspects, consumers should certainly be notified about privacy policies.

Most important consideration in applying a mobile marketing program is to get permission from the customers and the prospects. Data control by mobile operators may irritate the consumers. Credibility, which is to what extent the consumer believes and trusts to the content of the message or mobile marketing program, can be achieved by primarily fulfilling a proper “opt-in” (a clear consent to participate to mobile marketing program provided by the consumer) and “opt-out” procedure (cancellation of the consent made by the consumer). Customer feels more confident about the application, if the opt-out procedure is easy and is clearly indicated. Else, customer may feel empowered if he can choose the type of the advertisement and the frequency of receiving it.

The ability of the mobile marketing application or campaign to entertain the consumer is one of the most important factors determining the consumer attitude. The content should be either visually or sensationally (or both) enjoyable in order to attract consumers’ attention. Usefulness or/and being informative is crucial too; usefulness can be either in form of easiness to use the application and/or to ease the daily life of the consumer. Content should be informative, as well as accurate, to both pull the consumer to the campaign and to be able to win his confidence.

Offering prizes, promotions or incentives on mobile marketing programs is the easiest way to ensure a positive consumer attitude. Consumers are mostly attracted by rewards. Nevertheless; for some consumers, time would be much more precious than prizes or promotions. As indicated in the first paragraph of the Title III, the income level is an important factor which may determine the approach of the customer to the mobile marketing campaigns. For instance, time-saving applications can be priceless for a businessman whose time is precious. In fact, mobile marketing can obtain the most from the consumers who are rich in money, poor in time.

IV. Measurement Fundamentals of a Mobile Marketing Campaign

There are different basis to monitor and measure the costs and the effectiveness of mobile marketing programs, depending on type of the campaign, volume of the service purchased from the mobile operator and the level of targeting. For instance, mobile banners can be purchased based on Cost per Thousand (CPT), based on Cost per Click (CPC), or based on Cost per Action (CPA).[15] CPT measurement is based on the cost to display the advertisement to 1000 consumers, and obtained by dividing “the total cost to run the advertisement” by “one thousandth of total audience of the campaign”.[16] Cost per Click (CPC) is based on the cost of displaying the advertisement which customer clicks and directs him to the campaign web page. Cost per Action (CPA) is calculated with the number of actions made by the customer (actions such as purchase, registration, etc. which should be indicated and agreed by the mobile operator and the advertiser). Cost of sending collective SMS messages or newsletters depends on the volume of purchase and the level of targeting as the mobile operator provides the relevant customers filtered in accordance with the campaign details.[17]

After monitoring the campaign costs in detail, response rates are the other key metrics and another component to evaluate the effectiveness of the mobile marketing campaign. Click-through Rate (CTR) is a way to evaluate the success of the campaign. It is calculated as dividing “the number of times which customer clicks on the advertisement” by “the number of times which advertisement is displayed”. Targeting and providing a relevant content is the best way to increase Click-through Rate. Conversion rate is the ratio of the consumers who achieved the desired action, i.e. the aim/s of the campaign. Besides quantitative metrics, qualitative aspects should be taken into account too. For instance, sparking word of mouth effect by the satisfied customers may achieve enhancement in brand awareness. Else, even though the campaign is not very successful as expected, brands are become able to build or broaden their customer database; however repetition of the opt-in procedure is again required for the next campaigns. Nevertheless, the created customer database is an additional advantage to apply profiling in designing the further mobile marketing programs.

C. Analysis of Current Mobile Marketing Applications

“The pool of advertisers turning to mobile to drive direct response is expanding beyond mobile-endemic products and services like ringtones and cell phone personalization to encompass such categories as auto (drive to dealer locator), CPG (couponing), Entertainment (drive to iTunes to buy music, TV episodes, etc) and food (PapaJohn’s is selling pizza via mobile phones!)”[19], (Mobile Marketing Association (2009). Mobile opportunities enhance the capabilities of marketers and enable them to develop innovative and creative marketing programs which not only lead the sales but also strengthen the brand equity. Figure 5 (Apple App Store Corporate Application purpose (%)) shows that Apple focuses rather on promoting the brand than generating revenue when applying mobile applications, with 30 percent share of Brand/Product Promotion compared to 12 percent of Revenue Generation regarding the purpose of the mobile application.

The following sub-sections discuss the most essential mobile marketing applications currently in use.

I. SMS/MMS Marketing

SMS/MMS Marketing is the mainstream of mobile marketing; many channels can be combined via SMS/MMS Marketing.

According to the research of M:Metrics Research Company in 2007; TV is the most effective media channel to promote SMS/MMS marketing campaigns, as it provides the highest response by the participants. (See Figure 6 (SMS Response by Medium)[20] )

[...]


[1] Mobile Marketing Association (2008a), MMA Wiki Main Page

[2] Morgan Stanley Research (15.12.2009), P. 1

[3] Dushinski K. (2009), P. Foreword

[4] Dushinski K. (2009), P. Foreword

[5] Vgl. Strategy Analytics, Inc., (2008) P. i

[6] Nielsen Mobile (2008), P. 7

[7] Mindshare (2009), P. 10

[8] Strategy Analytics (2009), P. 9

[9] Google Corporate Web Page (2010), Facts about Google's acquisition of AdMob

[10] Wikipedia (03.2010), List of acquisitions by Google

[11] AdMob (12.2009), P. 1

[12] AdMob (12.2009), P. 26

[13] Morgan Stanley Research (15.12.2009), P. 12

[14] Parissa H. & Maria M., P. 3

[15] Vodafone Marketing Solutions (2010), “Costs” Section on Corporate Web Site

[16] Wikipedia (19.02.2010), Cost per mille

[17] Vodafone Marketing Solutions (2010), “Costs” Section on Corporate Web Site

[18] Mobile Marketing Association (2008b), P. 8

[19] Vgl. Mobile Marketing Association (2009), P. 4

[20] Mobile Marketing Association (2007a), P.1

Details

Pages
70
Year
2010
ISBN (eBook)
9783640626427
ISBN (Book)
9783640627028
File size
1.4 MB
Language
English
Catalog Number
v150756
Institution / College
University of Applied Sciences Giessen
Grade
1.3
Tags
Mobile Marketing Mobile Advertising Future of Mobile Marketing

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Title: Analysis of Current Mobile Marketing Applications, Selected Best Practices and Future Development