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Hot on SMS, cold on apps: MMA's view of 2010

By Federico Pisani Massamormile

Mobile marketing was redefined in 2009 ? literally. In November, the Mobile Marketing Association updated the definition to ?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.?

Describing mobile marketing as a set of practices reflects how it has changed in 2009 and where it is headed in 2010. To understand, it helps to consider the following five trends.

Mobile is multichannel
In 2010, brands and agencies increasingly will use mobile to enhance other channels, both traditional and new media.

This trend has been underway for a couple of years, and it is not hard to see why: With high penetration even in developing countries, mobile is widely recognized as a convenient, cost-effective way for marketers to reach the mass market, including in ways they cannot with other media.

For example, a growing number of marketing campaigns use mobile-enhanced billboard, print and broadcast media to promote an opt-in for text alert programs, wallpapers, games and ringtones to maintain awareness of a product, such as a new car model or album.

These programs support engagements long after exposure to the initial traditional marketing.

This stickiness of mobile is one reason why brands and agencies will spend in 2010 and include a mobile component throughout all their mobile marketing programs at every state of the customer lifecycle.

Another benefit drives that trend.

Brands and agencies increasingly recognize that mobile is a powerful, cost-effective way to maintain a relationship with customers.

For example, when customers respond to, say, a short code in a print ad, that initial communication is an opportunity to invite them to opt in to future campaigns and promotions, such as SMS-delivered alerts and e-coupons for secret sales.

Richer analytics are here
In 2010, mobile analytics tools will grow in both selection and features so that brands and agencies have richer, more actionable insights into their mobile campaigns, such as how consumers are interacting with them.

This level of hard metrics benefits both the campaigns and the mobile marketing industry by illustrating the value that mobile brings to a campaign.

Mobile analytics tools also increasingly will be integrated with analytics tools for other media.

For example, a multichannel campaign spanning broadcast and mobile will be able to use a single dashboard for viewing data for SMS usage alongside Nielsen and Arbitron metrics. That is a key component enabling the overall marketing trend toward integrated campaigns.

Smartphones create new opportunities
In third-quarter 2009, worldwide smartphones sales were nearly 13 percent higher than one year earlier, according to Gartner.

Smartphone adoption has increased markedly over the past two years, and despite the recession, smartphone sales are outpacing feature phone sales.

For mobile marketers, the takeaway is that the base of consumers who can be reached via smartphone applications is large and rapidly growing.

For years, brands have successfully used ringtones, games and wallpapers to engage consumers.

Smartphone applications provide even more opportunities because they deliver a richer, more immersive experience and branding opportunities.

Smartphone applications also fit in with the multichannel trend.

For example, the popularity of smartphone applications and app stores has a downside because as the number grows, it becomes difficult for each application to attract attention.

In large stores, such as Apple?s App Store, it is easy for an application to get lost in the crowd. To avoid that problem, brands and agencies should develop strategies for increasing discoverability, such as using other mobile or non-mobile channels to build awareness of the application so that consumers will seek it out.

Developing a smartphone app can be expensive and time-consuming compared to an SMS short code enabled marketing program. And because smartphones typically cost $150 or more, plus another $50 or more per month for service, applications have limited effectiveness in terms of reaching many demographics. 

For example, if the product being marketed is aimed at highly price-sensitive or budget-constrained demographics, or the technologically unsavvy, a smartphone application is a poor centerpiece for that campaign.

By comparison, the vast majority of consumers are at least aware of SMS, if not already active texters, so it is an ideal way to reach the widest possible market.

SMS? value skyrockets
SMS is one of the oldest wireless technologies still in use, and for good reason: It is nearly ubiquitous in terms of device and network support, enjoys wide consumer awareness across all demographics and is relatively inexpensive for consumers, brands and marketers.

All of those benefits make SMS a highly effective way for a mobile marketing campaign to reach the mass market ? far more than, say, smartphone applications, which have a rapidly growing yet still small addressable market.

That is why in 2010, SMS increasingly will serve as the glue that cements multichannel campaigns.

More campaigns that span print, direct mail, digital signage and broadcast will use SMS to enable calls-to-action, e-coupons and metrics such as the number of people who view an advertisement.

One example is Money Mailer, which helps local businesses and national chains to create and execute campaigns that feature short codes in direct mailers.

After texting the short code, consumers receive an e-coupon on their phone that they redeem by showing to the merchant?s sales associate.

Participating Money Mailer merchants are reporting a coupon-redemption lift averaging 3.5:1.

Just as important, SMS also is giving these merchants an opportunity to build an opt-in list to enable future campaigns.

SMS also provides brands and agencies with a less expensive, faster and farther-reaching alternative to smartphone applications, which a growing number of campaigns use.

Although smartphone adoption skyrocketed in 2009, smartphone applications are not an ideal fit for every campaign because, by various analyst estimates, upward of 80 percent of mobile users have a feature phone.

That is not to say that brands and agencies should not consider smartphone applications. Just the opposite: They are a powerful new option for campaigns and an example of why ?interactive? is part of mobile marketing?s new definition.

But at the same time, it is important to understand how applications fit in ? or do not ? with the product being marketed and its target audience.

In that regard, SMS? ubiquity fits another part of mobile marketing?s new definition: ?any mobile device or network.?

Industry self-regulation grows
Over the past year, the mobile marketing industry has made significant strides toward protecting consumers. That is key for two reasons: It protects the opportunity, and it obviates the need for slow, invasive and innovation-stifling government intervention.

The MMA has led many of these initiatives, such as by creating and then frequently updating its ?U.S. Consumer Best Practices (CBP) Guidelines for Cross-Carrier Mobile Content Services.?

For example, the latest version of the CBP standardizes the language used to inform users of charges they may incur when participating in a mobile marketing campaign across the four largest U.S. carriers.

The MMA also frequently solicits public input when developing industry-standard guidelines, and it has developed mechanisms ? such as http://mmaglobal.com/node/8384 and ? that consumers can use to report any issues or concerns about mobile marketing messages.

The MMA then immediately investigates these concerns.

So far, consumer feedback has been limited, indicating that the industry?s self-regulation is highly effective.

But when there have been concerns, the MMA has responded faster and more effectively than any regulator could.

For example, in January 2009, the MMA investigated complaints that a carrier sent unsolicited SMS messages advertising the new season of a hit TV show that it sponsors.

Within a short period of time after receiving the initial complaints, the MMA created a probe. No regulator ? in telecoms or any other industry ? has ever responded that quickly to consumer complaints.

These consumer protections fit mobile marketing?s new definition by helping ensure that brands and agencies can continue to communicate and engage with their target audiences.

After all, the better the experience, the more likely consumers are to participate in campaigns ? and the more valuable the mobile channel becomes.

THESE FIVE trends are among the reasons why 2010 will be another banner year for mobile marketing.

Brands and agencies recognize that the mobile channel is highly effective by itself and as part of multichannel campaigns, has a solid ROI and provides new opportunities to reach consumers.

None of these trends will slow down anytime soon, nor will the mobile marketing opportunity.

Federico Pisani Massamormile is CEO of aggregator Hanzo, Rio de Janeiro, Brazil, and global chairman/interim CEO of the Mobile Marketing Association, New York. Reach him at