Mobile marketing primer

Jeremi Karnell, Founder & CMO | One To One Interactive
September 30, 2002

Market Overview (The Realities)

Although there has been a lot of hype around the mobile marketplace and how this could be marketing's "Next Big Thing", the industry is still very much in its infancy (particularly in the United States) and is far from being the marketing panacea that everyone hopes for. There are several factors that contribute to this.

First, it is a technically diverse marketplace. Device types range from mobile handsets and two-way pagers to PDAs, laptops and vehicle-related telematic systems. Each of these interface options contains its own unique (and sometimes proprietary) way of retrieving and displaying data (i.e., Voice vs. WAP vs. SMS vs. E-mail vs. J2ME vs. i-MODE, etc) via competing and unconnected technology standards (i.e., GSM vs. TDMA vs. CDMA vs. iDEN vs. AMPS vs. Analog). It has taken the Internet marketing industry close to 5 years to understand how to effectively use narrowband, rich media, and e-mail tactics...and those were deployed on a wireline, open standard network.

Second, mobile marketing presents many platform challenges that do not exist in other channels. Because mobile devices are viewed as being very personal, many are still trying to understand how to deliver relevant and timely messages without seeming intrusive or creating privacy violations. Furthermore, device usability as it relates to small screens and font types, limited graphic capabilities, and thin bandwidth creates limitations as far as developing easy-to-use and powerful marketing campaigns.

Third, user adoption of mobile data functionality is still relatively low. Few users makes for a lack of marketing inventory. Even though most mobile handset carriers report growing numbers of service plans being sold with data functionality, many would admit that most users either are not aware that they have it and/or after using it once never use it again (think of that gym membership you applied for on January 1st, 2002). Again, I must stress that I am only speaking about the U.S. marketplace. Unlike Europe or Asia, the United States has benefited from high Internet penetration and a sophisticated/robust wireline telephony infrastructure. These factors are the primary reasons why Americans are not rushing to adopt mobile data technologies. As technology advances, you will see this trend change drastically.

There are still many discrepancies in forecasts for mobile advertising spending in North America, many due to the factors listed above (See Figure 1.0). 2005 spending estimates range from $890 million (Forrester Research) to over $6 billion (The Yankee Group).

Figure 1.0

Regardless of what the end number actually is, there does seem to be agreement that mobile advertising is poised to double, triple, or quadruple from what was spent in 2000. Despite these projections, recent studies reflect that most U.S. consumers are unwilling to accept such messages from marketers via their mobile devices (See Figure 2.0).

Figure 2.0

European consumers seem less skeptical. Independent research released March 19, 2002, by The Mobile Marketing Association (MMA) quantifies the successes that European consumer brands are achieving through the use of mobile as a marketing channel. The study, performed by digital research company InterQuest, analyzed campaigns in the UK, Germany, and Italy. Among its conclusions ¹:

• There is between a 71% - 96% recall rate by consumers in response to mobile marketing campaigns
• Nearly 70% of respondents would most likely or definitely recommend that friends receive mobile marketing messages
• 43% feel that the campaigns they receive via SMS have a positive impact on the advertised brand, with only 7% having a negative opinion
• Consumer intent to follow a brand prompt produced an overwhelming response, with over 40% of respondents agreeing that they would (visit a website, view an ad). On average, less than 5% stated that receiving a mobile campaign message decreased their desire to respond to the advertiser's message

Over the next couple of years, we will continue to observe marketing breakthroughs and lessons from Europe and Asia. The wireless marketing industry in the U.S. will continue to be filled with small trials and test campaigns utilizing fundamentally basic tactics (i.e. WAP/PDA Sponsorships, SMS Messaging, etc.). The U.S. will still be in a foundational mode of understanding what works, what doesn't, what best practices are, and what are the industry standards.

Five years from now, the United States should be hitting its stride with advanced mobile services resulting from 3rd Generation Network upgrades by all of the national carriers. New voice, multimedia, streaming, location-based and advanced transactional functionality will drive mass consumer adoption of mobile data services and marketing spending within this channel will skyrocket. Furthermore, we will begin to see some parity at this point between the U.S., European, and Asian mobile marketplaces.

DEVICES

To have a clear understanding of the mobile marketing opportunities that exist, one needs to first understand the types of devices that make up the landscape. There are generally three distinct categories ²:

Connected Mobile Devices

This category of device denotes immediate connectivity to a network, specifically the Internet, for access to real-time data. These devices require a wireless modem or another type of connection mechanism and may act as either one-way or two-way communication devices. These are the types of devices most thought of when mobile marketing is discussed.

Examples of this type of device are:

Data Enabled Mobile Phones	PDA's with wireless modems like Palm VIIs or RIM Blackberry Devices		Hybrid Mobile Phone/PDAs

Unconnected Mobile Devices

This category of device denotes connectivity to a network, specifically the Internet, for access to data via a synchronization process. These devices typically require a hardwire connection to another device that has access to a network, transferring data to the mobile device for subsequent retrieval while not connected. Users generally subscribe to services such as AvantGO or Vindigo for content delivery and management. While the data is not real-time, the content may be updated upon device synchronization. These devices, while not typically considered when mobile marketing is discussed, enjoy a more active user base then data enabled mobile phones, due to the larger screen sizes and earlier adoption.

Examples of this type of device are:

PDAs without wireless modems like the Palm m500 or the iPaq 3835 Pocket PC. (Shown in Cradle)	Avantgo's Portal Screen

Wireless LAN/WAN-based Internet Devices

With the proliferation of network standards like 802.11 and Bluetooth, there will be a rise in wireless access to the Internet from a range of devices, including computer laptops, within Local Area Networks (LAN) and Wide Area Networks (WAN). Furthermore, new devices such as Wireless Web Tablets will make their introduction to the marketplace to take advantage of such network connectivity. This paper will not focus on these types of devices as it relates to this mobile marketing.

Examples of this type of device are:

Laptops (Macintosh Powerbook G4)	Wireless Web Tablets

DELIVERY PLATFORMS (Mobile Operating and Delivery Systems)

As it is important for marketers who want to enter the mobile channel to understand the different types of mobile devices, as well as the platforms within those devices that deliver data. The below list, though not extensive, represents the most popular platforms in the marketplace today.

Mobile Phone (Internet Delivery Systems)

WAP: Wireless Application Protocol. Developed in 1997 by Ericsson, Nokia, Motorola, and Unwired Planet. Protocol was developed to foster the delivery of Internet content and data services to mobile phones, PDAs, etc.

i-MODE: Packet-based information service for mobile phones from NTT DoCoMo (Japan). First to provide Web browsing from cellular phones, it has the largest Wireless Data Service in the world with over 12 Million Subscribers. There are a few advantages of i-Mode over WAP that have been mostly responsible for the extremely fast spread of i-Mode all over Japan ³.

• Color: i-MODE supports color graphics up to 256 colors
• HTML-based: i-MODE has been created out of some HTML-variations, which makes it a lot easier to handle for HTML-experienced programmers
• Always-on technology: The always-on technology makes fast access possible
• Can be uploaded to a regular server: no special server — as for WAP — is needed
• Can use most GIF-images: no need to change into a different format

Advanced: Phones are beginning to be shipped with advanced platforms like Sun Microsystems J2ME and Qualcomm's BREW. This will provide to mobile application developers a proper programming language to build more robust applications. Mobile Phone (Messaging Systems)

SMS (Short Message Services): A messaging service supported by many mobile phones that allow short text messages, typically in the region of 120 characters, to be sent between mobile devices or between computers and mobile devices ⁴.

EMS (Enhanced Messaging Service): Available since 2001 on a small selection of Ericsson, Siemens, Alcatel, and Motorola phones, EMS messages can combine short formatted text, monochrome pictures, melodies, and simple animations.

MMS (Multimedia Messaging Service): MMS enriches a mobile message even further with color pictures, photos, sampled audio, and even video — all while preserving the SMS user experience of instant receipt. Vendors Nokia and SonyEricsson announced that they will start selling MMS handsets in the second half of 2002.

Mobile Instant Messaging: Similar to the PC-based IM services like AOL Instant Messenger, mobile IM services let users chat interactively and tell users when their friends are online. Some IM clients enable users to upload files like pictures and sounds to others in real time. While IM services delivered via SMS or WAP have existed for a year, phones with IM clients have just begun to hit the U.S. market.

Mobile E-Mail: Mobile E-mail combines lengthy text with file attachments of any type and a subject header. Most mobile operators and portals offer SMS alert services for new incoming email in addition to limited read/write capability via WAP; now, many new phones like the Ericsson T68 have an email client inside.

Picture Messaging: One of the hottest items among the young and trendy are mobile phones that not only do e-mail but also take and transmit photos. It's a technology that's catching on quickly. J-Phone, the first telecom to popularize the devices, had leased out 5.47 million of the handsets as of the end of June 2002.

PDA

Palm OS: Palm, Inc. is a pioneer in the field of mobile and wireless Internet solutions and a leading provider of handheld computers, according to IDC (2001). Palm handhelds are equipped with a comprehensive suite of personal information management (PIM) software, including Date Book, Address Book, To Do List, expense-management software, calculator and note-taking applications.

Pocket PC: In April 2000, Microsoft launched the Pocket PC platform, taking the place of the original Palm-Sized PC device family. In the past two years, the platform has managed to capture roughly 20 - 25% of the mobile device market while competition continues to intensify. Pocket versions of popular Microsoft applications like Word, Excel, and Outlook has added to this PDA OS' robustness and appeal. The past year has been marked by the launch of the platform's first major upgrade, Pocket PC 2002, as well as Microsoft's strong push into the mobile phone arena.

TACTICS

The purpose of this next session is to describe the different tactics that are available within the mobile marketing space and to provide some examples. The following categories were provided by the Mobile Marketing Association as draft definitions. Three categories that will be reviewed are:

• WAP/i-MODE Advertising Types
• PDA Advertising Types
• Mobile Messaging (i.e. SMS, E-mail) Advertising Types

Wireless Advertising (WAP/i-MODE)

Text Advertising ⁵

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Text (Non-Clickable)	Text ad for branding or information. Not dynamic.	Pull	Yes	No	No	Branding/Traffic Generation Example
	Scrolling Text	Text that scrolls laterally across the screen (WAP doesn't currently support animation, but i-Mode does)
Text Link	Hypertext that links to another URL, more text, graphic, or logo.	Pull	Yes	No	No
	Scrolling Text	Text that scrolls laterally across the screen (WAP doesn't currently support animation, but i-Mode does)

Graphic Advertising ⁶

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Graphic (Non-Clickable)	Graphic, logo, or visual for branding or information. Not dynamic.	Pull	No	Yes	No	Branding/Traffic Generation Example
	Animated Graphic	Graphic with motion and animation (WAP doesn't currently support animation, but i-Mode does)
	%-of-Screen Ads	Ad that automatically adjusts to a designated % of screen size
Graphic Link	Graphic, logo, or visual that links to anotherURL, more text, or more graphics.	Pull	No	Yes	No	Promotional Example
	Animated Graphic	Graphic with motion and animation (WAP doesn't currently support animation, but i-Mode does)
	%-of-Screen Ads	Ad that automatically adjusts to a designated % of screen size
	Coupon	Promotion that, when accepted by the user, automatically stores a promo code or barcode used for future redemption or can be taken in and physically shown to a retailer

Intra-Active Advertising ⁷

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Intra-Active Ad	AdText or Graphic with user input within a form field, pull-down menu, or dialog box.	Pull	Yes	Yes	No	Direct Response Example
	Animated Graphic	Graphic with motion and animation (WAP doesn't currently support animation, but i-Mode does)
	Dial-Thru	Ad that, when clicked on by the user, automatically dials a phone number for a transaction, etc.
	Coupon	Promotion that, when accepted by the user, automatically stores a promo code or barcode used for future redemption or can be taken in and physically shown to a retailer

Interstitial Advertising ⁸

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Interstitial	Full page text and graphic appearing between calls for pages of content.	Pull	Yes	Yes	No	Branding/Traffic Generation Example
	Timed	Disappears automatically after set amount of time
	Clickable	Must click to close — or can click through to another URL, text or graphics

PDA Advertising

Text Advertising ⁹

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Text (Non-Clickable)	Text ad for branding or information. Not dynamic.	Pull	Yes	No	No	Branding/Traffic Generation Example
	Scrolling Text	Text that scrolls laterally across the screen
Text Link	Hypertext that links to another URL, more text, graphic, or logo.	Pull	Yes	No	No
	Scrolling Text	Text that scrolls laterally across the screen (WAP doesn't currently support animation, but i-Mode does)

Graphic Advertising ¹⁰

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Graphic (Non-Clickable)	Graphic, logo, or visual for branding or information. Not dynamic.	Pull	No	Yes	No	Branding/Traffic Generation Example
	Animated Graphic	Graphic with motion and animation
	Rich Media	Combination of graphics, animation, video, audio, text, and other media formats
	%-of-Screen Ads	Ad that automatically adjusts to a designated % of screen
Graphic Link	Graphic, logo, or visual that links to anotherURL, more text, or more graphics.	Pull	No	Yes	No	Direct Response Example
	Animated Graphic	Graphic with motion and animation
	%-of-Screen Ads	Ad that automatically adjusts to a designated % of screen size
	Coupon	Promotion that, when accepted by the user, automatically stores a promo code or barcode used for future redemption or can be taken in and physically shown to a retailer
	Tap-and-Add	Ad that, when accepted by the user, automatically stores the merchant information in the device's address book or calendar
	Rich Media	Combination of graphics, animation, video, audio, text, and other media formats

Intra-Active Advertising ¹¹,

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Intra-active Ad	Text or Graphic with user input within a form field, pull-down menu, or dialog box	Pull	Yes	Yes	No	Promotional Example
	Animated Graphic	Graphic with motion and animation
	Intelligent Agent	Ad that allows the user to define preferences, which then searches the web for such preferences and returns promotional information
	Coupon	Promotion that, when accepted by the user, automatically stores a promo code or barcode used for future redemption or can be taken in and physically shown to a retailer
	Tap-and-Add	Ad that, when accepted by the user, automatically stores the merchant information in the device's address book or calendar
	Rich Media	Combination of graphics, animation, video, audio, text, and other media formats
	Downloadable Ad/Application	Ad that, when activated by the user, downloads onto the device for viewing later, in the form of an animated, functional, or interactive application

Interstitial Advertising ¹²

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
Interstitial	Full page text and graphic appearing between calls for pages of content	Pull	Yes	Yes	No	Direct Response Example
	Timed	Disappears automatically after set amount of time
	Clickable	Must click to close — or can click through to another URL, text or graphics

Mobile Messaging Advertising ¹³

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
SMS-1 Way	Text Message that alerts person with sound. Message appears on screen after user initiates request. Promotional code in text. Text usually scrolls up.	Push	Yes	No (Yes-EMS & MMS)	No (Yes-EMS & MMS)

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
SMS-2 Way	Text Message that alerts person with sound. Message appears on screen after user initiates request. Text usually scrolls up. User is requested to respond from the device.	Push/Pull	Yes	No (Yes-EMS & MMS)	No (Yes-EMS & MMS)

Tactic Name, Description and Delivery Method ("Push"/"Pull")			Ad Appearance Type			Example
			Text	Graphic	Audio
SMS-Call	Text Message that alerts person with sound. Message appears on screen after user initiates request. Text usually scrolls up. User is requested to respond by calling a telephone number.	Push ("Pull-like" fulfillment through audio)	Yes	No (Yes-EMS & MMS)	Yes

METRICS

The MMA has published the following definitions for the measurement of advertising delivery and effectiveness.

Among the definitions:

• Permission Level: The level of permission a user/device has granted to a specific carrier, service, or wireless content site to receive advertising messages from them
• Response Capability: The ability of the user to respond based on the feature set of the user's device (examples: SMS with embedded 800 number, two-way SMS, or Wireless Applcation Protocol [WAP])
• Reach: The unique (unduplicated) number of users/devices to which an advertiser's message is delivered
• Frequency: The number of times each advertising message has been sent to each unique user/device
• Impression: The sending of an advertising message to a user/device as recorded by the server software (total impressions = reach x frequency)
• Click-Through: User/device interaction with an advertisement that does not initiate a call back
• Call-Back (Or Call-Through): User/device calling in to a pre-defined and assigned telephone number communicated in a wireless advertisement for more information or messaging - which can be tracked via a specific response number or tracking code

The MMA says it will release more standards and definitions in coming months, including creative standards for ads on PDAs, WAP and i-MODE, SMS, pagers and voice devices.

PRIVACY

In an effort to establish privacy standards for the mobile marketing industry, the MMA issued a series of suggested guidelines designed to raise awareness and spur debate among mobile operators and marketers engaged in the practice of location-based targeting on March 11, 2002. These guidelines express the MMA's point of view on the need to protect subscribers' privacy while maintaining the integrity and effectiveness of mobile marketing campaigns and serve as the first call-to-action for privacy standards in North America.

As part of the suggested guidelines, the MMA recommends:

• Subscriber permission to receive push advertising and/or content must be verified through Confirmed Opt-In. This is considered the highest level of subscriber permission for e-mail marketing.
• Marketers should not merge personally-identifiable information with mobile subscribers' location information without confirmed opt-in consent from the individual subscribers.
• Marketers who wish to share subscriber information with third-parties should do so only with the subscriber's consent.
• Full disclosure must be made if using anonymous or aggregate location information for marketing purposes.
• ubscribers should be able to opt-out of programs at any time, even if they have already agreed to receive marketing campaigns.

On June 20, 2002, the MMA and TrustE (http://www.truste.com), the leading third party privacy seal and certification program, formed a partnership that willenable both groups to help the mobile marketing industry take advantage of cutting-edge wireless technologies while addressing sensitive privacy issues.

RESOURCES

Informational Sites

Associations

Legislation

End Notes

¹Source: Wireless Advertising Association
²Source: "The Future of Wireless Marketing": Lot21 Emerging Media Group 2001
³Source: Mobile Communications: http://www.ccwap.com/imode2.htm
⁴Forrester Research, Mobile Success Through Strategy, September 2001
⁵Phone Screen Shots from Avesair
⁶Phone Screen Shots from Avesair
⁷Phone Screen Shots from Avesair
⁸Phone Screen Shots from SkyGo
⁹Phone Screen Shots from Avesair
¹⁰Phone Screen Shots from Avesair
¹¹Phone Screen Shots from Avesair
¹²Phone Screen Shots from SkyGo
¹³Phone Screen Shots from SkyGo

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