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Industry execs speak out on future of mobile

This is the year of mobile. Or is it?

Mobile Marketer's Jordan Crook interviewed key industry players from various sectors of the mobile space to find out what consumers, retailers and marketers should expect in the coming years.

Here is what they had to say:

Michael Becker, vice president of mobile strategies at iLoop Mobile, San Mateo, CA
SMS is the core and fundamental element of ubiquitous mobile marketing. That will change slightly over time but we really need, in terms of use, to keep in mind that each of the different media within mobile have their own place.

SMS is incredibly valuable for timely location-relevant proactive messaging when information is time-sensitive.

SMS is also a back-end capability. I can use SMS and related alerts to wake up applications on devices and it can be used to interact with other types of services.

SMS can be used as a trigger in traditional media as well. I can use SMS as something that can initiate IVR and link to a Web site or application.

Today, 68 percent of handsets are Internet-enabled. Thirteen percent are smartphones, according to Luth Research, and Juniper predicts smartphone penetration will reach 23 percent by 2013.

What that tells us is that there is 77 percent of the market that will still be on traditional phones that will primarily have SMS and lower Internet capability.

For the next few years, SMS will play a key role in mobile marketing and for a long time after that SMS will continue to play a role in terms of alerts and related location info.

There is a lot of buzz around the question of whether or not SMS will be supplanted by email.

The key thing there is that they are different network infrastructures. Email has a different type of use in terms of content structure and the types of devices that can use it properly.

Interoperability, standards, handset adoption, feature adoption, the help of the ecosystem and its players, geography and consumer profiling all need to be in sync for any one of the various media and practices of mobile marketing to function efficiently.

SMS is the one that functions the most efficiently, globally and locally, across all of those factors. It is going to be years before all those other pieces catch up.

Brennan Hayden, vice president at the WDA, East Lansing, MI
Mobile marketing is roughly the same place text messaging was in 1999.

At that time, carriers had really just started warming up to text messaging in a big way, and despite continued naysayers who scoffed that anyone would bother, SMS started to explode then and kept right on growing, and still is.

Also, at that time, email was seen as the future for mobile, and instant messaging was predicted to swallow SMS as the user-interface of choice for the shorter, more personal communications with no envelope to open. That clearly has not happened.

In an analogous way, many on the outside looking in at mobile advertising scoff that tiny ads on mobile phones can be effective; many think they will be an annoyance. The Internet is where most interactive spend is made, where creativity and therefore engagement is possible.

Yet, the growth in mobile advertising and its effectiveness is unmistakable for those who are close enough to the action to see the real numbers.

Extending the analogy, carriers are maturing in their approach to mobile advertising and the ecosystem is sure-footedly evolving to support rich utility and rapid growth. Users don't mind the mobile ads. They actually like them, thanks to the discipline employed by the industry, based on lessons learned on the Internet.

If you fully buy into this analogy, you might expect a tripling of ad volume this year, followed by compound annual growth over the next five years of 30 percent.

Compounding that rosy scenario, I think you may find that studies will begin showing much higher quality click-traffic in the performance advertising realm than you see in the Internet, where it's 70 percent kids clicking.

Mobile content and application advertising is a special case, since it necessarily addresses many of the more severe technical challenges that branding campaigns can more optionally deal with, such as billing and ecommerce, privacy, security and content integrity.

It also pushes the envelope on proof points, since measurable and positive return on investment is absolutely essential. For this reason, you can expect mobile content and application advertising to pioneer the new methods and best practices that drive the overall mobile marketing industry.

Mobile content advertisers work out the kinks and standards in the new capabilities, and then they filter out to the broader community of brand advertising. Hopefully down the road, hard-goods merchandisers can finally join the fray in a full-throttle manner.

Noah N. Glass, CEO of GoMobo, New York
With increased data speeds and the continued rise of location-aware applications, mobile commerce will become a fully integrated component of our everyday lives.

We will move beyond just knowing what is immediately around us to being able to instantly transact on-the-go, whether it is for a sandwich or dry cleaning. The place-shifting and time-shifting qualities of the mobile device will do for perishable goods what ecommerce has for non-perishable goods. The perishable and local goods are within a few clicks of desire.

Vejay Lalla, entertainment, new media and advertising associate at Davis & Gilbert LLP
I believe that mobile marketing is still in many ways from both a business and in particular, a legal standpoint, in its infancy in the U.S., particularly in comparison to the widespread use of mobile devices in Europe and Asia not only for for SMS and content, but in some cases, as a mobile debit or credit card.

With the increasing popularity of mobile applications and smartphones in the U.S., and the onslaught of advertising supported content, applications, games, the technology and uses are still far outpacing the law and regulation.

Regulators, however, are not that far behind, and under the Obama administration, are continuing to examine ways in which disclosures are being made to consumers with respect to fees, and how data is being collected, used, and secured.

While there are certainly best practices being implemented by mobile marketers and even advertisers in general with respect to areas such as behavioral marketing, we should expect a significant increase in regulatory activity and enforcement in connection with mobile marketing, especially in how data is being collected and used by marketers with a particular emphasis on protecting children.

The FTC issued a report in April 2009 entitled "Beyond Voice: Mapping the Mobile Marketplace" which found that consumers were still receiving numerous unwanted text messages and that increased scrutiny would be needed to enforce current regulations to require adequate disclosures and ensure compliance.

The FTC is also expediting its review of the Children's Online Privacy Protection Rule to determine whether additional regulations regarding mobile practices toward children are necessary.

I believe the FCC is likely to become more active as well potentially addressing areas such as the use of location based data by advertisers and marketers.

Dave Everett, CEO at KaOoga, Newton, MA
As I was telling a client just the other day, SMS marketing is where Internet marketing was 10 years ago: still in its infancy, but evolving faster than anyone could imagine.

Everyone is texting. It is basically becoming more common than email and regular phone conversations.

Text is the future of communication. It is the backbone of teen and young adult's social lives and will grow with this new generation "Generation TEXT" into their professional lives. Even in daily business, text is how many meetings get scheduled.

Since people probably spend more time texting than watching TV, ads will naturally have to gravitate towards the viewers. We are starting to see that evolution now. More TV commercials are including a text component with text-to-win, viewer feedback and etcetera.

Moving forward, SMS marketing may be as common as ads on the radio every 15 minutes. With quality control and targeted, relevant ads via opt-in, SMS marketing should prosper. If marketers abuse this gateway, the entire system could flop and be as unaccepted as 'pop-up' ads on the Internet.

Perhaps a regrettable byproduct of this channel's growth, as ever greater percentage of ad budgets flow to it, is going to be the continuing decline, even collapse, of many mainstream media outlets such as big-city papers and local TV stations.

This has consequences in terms of who will be doing the original reporting and governmental watchdog role. This is troubling, but right now the focus in a harsh economy is getting optimal results for advertisers and optimal, measurable return on investment for their ad dollars and text is clearly the place to be for that.

Leo Giel, vice president of sales, North America, at m-Wise, Inc., New York
Mobile marketing is becoming very popular. Major brands are starting to understand that they need to connect with the consumer on their mobile devices. Harnessing the power of mobile technology allows companies to better understand their consumer and their consumer's buying habits.

An effective mobile marketing campaign provides critical market research on a mass scale, which is much more effective than the use of focus groups. In addition to market research, mobile is a great way to drive sales while building a one-to-one relationship with the consumer.

Mobile introduces an entirely new relationship with the consumer. In the past it was one message to the masses. Today, using mobile, brands send the message of "How can I build a closer personal relationship with you, Mr. Consumer, and deliver exactly what you desire."

The content management sector will leverage mobile just like they leveraged variable printing and one-to-one marketing in the past. Nowadays, when the marketing officer logs into their online asset management system to create an ad to move a particular product, they will create one ad that is output for multiple mediums: direct mail, newsprint, online, outdoor and now mobile.

I predict over the next few years you will see a big increase in integrations to asset management systems. This will be the foundation necessary to bring mobile marketing to the tipping point.

Scott Dunlap, CEO of NearbyNow, Mountain View, CA
The mobile marketing industry is seeing a long-awaited boom, thanks to innovation that has redefined the barriers to entry for marketers.

Historically, mobile marketing has been restricted by carriers who control access and enforce financial models. This was particularly the case for the U.S.

For example, you couldn't get an application to consumers without the approval of a carrier, incurring a fee where the carrier takes as much as 80 percent, a year-long partner cycle to get it approved and then additional expenses to the consumer for text and Web messaging.

Two things changed this. First, the iPhone. Second, the cost of a smartphone has dropped considerably and expanded the audience of consumers who are able to receive mobile marketing.

The iPhone changed everything by raising the bar in terms of user interface and capabilities (such as geolocation), creating iTunes and the App Store where downloading a program is as easy as downloading a song and connecting via WiFi.

Mobile marketers can use the iPhone to create highly visual, engaging experiences and get distribution without having to ask a carrier. Text, email, Web and apps can all be combined to do something unique and personal.

I think you will see two things happen in the next two or three years.

First, brick-and-mortar stores will realize their competitive advantage in the world of geolocated mobile phones. Why would a consumer buy on Amazon from a little mobile screen, if you can find the product less than a mile away to pick up?

"Nearby" will become the de facto instant gratification (since you can get it in an hour), rather than one-click buy.

The result of this is that more and more retailers will share their inventory and services online, and brands will invest to push more business to their local resellers.

We're already seeing this phenomenon at NearbyNow, where consumers who have a choice to "find nearby" or "buy online" will choose "find nearby" 17 times more often.

Second, online vendors will become extremely aggressive to steal market share directly from the stores. Imagine Amazon willing to drop the price 50 percent since they know you are in a Macy's at the time you are searching. This dynamic pricing of place, time and intent will become the battle ground.

Consumers will adopt because sharing their intent to buy will provide the best alternatives both online and off. Around this activity will be fascinating opportunities to market to people while they are in the act of shopping.

Mack McKelvey, vice president of marketing at Millennial Media, Baltimore
Mobile advertising networks have pioneered the development of the mobile advertising ecosystem on behalf of advertisers and publishers.

The leading networks today have carved out important infrastructure positions in the growing mobile Internet and they have built robust abilities to target and deliver effective campaigns to advertisers' desired audiences at scale.

Unlike the abundance of online ad networks, the mobile industry will shake out and there will only be two or three successful mobile ad networks.

While these networks will have differentiation in their respective approaches to the industry, the most successful will bring industry-leading demand, reach and significant mobile technology deployments.

In the end, the leading mobile ad networks will ensure that mobile is part of the mainstream media plan.

Roberto Chaves, CEO of Didmo AB, Stockholm, Sweden
Today's mobile marketing feels like the beginnings of the Internet-marketing revolution in so many ways.

Companies are jumping in to test the waters, from small businesses to big brands, and creativity is flowing.

Marketers are really eager to learn about what we offer and how they can leverage our affordable solution to create engaging mobile marketing campaigns.

Mobile marketing will continue to thrive as long as marketers keep fundamentals in mind, delivering audience-relevant content that's cross-platform compatible.

The iPhone has undeniably fuelled mobile application awareness, paving the way for other platforms.

Now is the time for marketers to understand that their message should reach everyone, regardless of the handset make or model.

From game developers and publishers to aggregators and advertisers, everyone seems to be winning with mobile gaming.

Whether mobile or console, gamers are weary and skeptical of in-game advertising because of the intrusion factor. Didmo has addressed this by placing ads only before and after game play and we foresee a continued trend toward implementing creative ways of brand advertising through mobile games.

We believe mobile gaming and marketing can work together for even higher click-through and response rates than we're currently seeing.