Mobile Marketing: How Smart Phones Muddy Waters

“Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” - American Marketing Association (2004)

The term "mobile marketing" has been used widely, but as mobile device technology continues to evolve, its meaning becomes less and less clear. As early as 2004, when it became obvious that consumers were embracing smart phones, academia was beginning to question(pdf) whether or not the term mobile marketing would retain any meaning over the long term.

With the introduction of smart phones, there has been a divergence in the use of the term. Before smartphones were available, it was generally limited to include text message advertising but even so, falls well short of describing what actually occurs when SMS messaging is used to market a product or service.

After smartphones became available, the term became even less clear. Its use now includes the smartphones themselves, the operating systems and applications available to smart phone owners. Indeed, if you read 10 articles about mobile marketing you may find that only 1 or 2 refer to the same subject matter. This is bad news for industry advocates and those seeking to introduce their brand via cell phones.

To make matters even more confusing, if one were to judge by the sheer volume of news stories and blog articles about smart phones, one could easily come to the conclusion that there are far more smart phones in use than there are in reality.

For firms interested in finding out about mobile marketing, the lack of clarity can be a source of confusion. A simple inquiry can raise more questions than it answers. Just what is mobile marketing? How does my company get involved? What type of campaign will result in the greatest ROI?

Forget The Hype, For Now

In spite of (or perhaps because of) the iPhone hype, Apple announced at the recent MacWorld expo that it, so far, sold 4 million units . Let's put this into perspective. It is estimated that as of 2007 over half of the world's population has a cellphone, or roughly 3.3 billion cell phones in use. The iPhone will definitely expand its market share, but it only represents a little over 1% of the total market at this time. The RIM Blackberry is now in the hands of about 12 million which represents a higher market share but still only about 3% of the total market.

Depending on your business this may not discourage you from targeting smartphone users exclusively, but most businesses do not have the luxury of such exclusivity.

The vast majority of cell phone users own a device which can only make calls and send and receive text messages.

SMS Is Still King

Even smartphones have embraced SMS by introducing qwerty keyboards in some form or another. SMS messaging, or "texting" is not declining with the introduction of smartphones but continues to increase at a rate faster than email rates. 97% of all phones in the US have SMS capabilities and 50% have browsers.

Clearly, based on the available data, marketing to cell phone users via text messaging and WAP/browser represents the largest potential audience.

Convenient Interaction

Marketing to Mobile (M2M) using SMS has netted companies something they have never been able to accomplish using traditional media advertising. In the strictest sense of the word, SMS campaigns go far beyond advertising.

Traditional advertising campaigns represent a constant source of missed opportunities. Since most media campaigns are targeted in publications or shows to which a particular demographic audience has access, the advertiser relies on repetition in order to embed his brand in the consumer's memory.

With SMS, the advertiser has an opportunity to put the brand right in the customer's hand at the earliest opportunity. In addition, because SMS campaigns are able to deliver contextual information based on the customer's input, there are no missed opportunities. The consumer is engaged from the moment of his first response. Advertising campaigns are transformed from a perpetual missed opportunity to a marketing opportunity.

How SMS Marketing Changes the Game

Consider the most famous mobile marketing campaign apart from the Obama campaign, American Idol. AT&T recently announced that the American Idol SMS voting campaign shattered all previous records and generated a staggering 78 Million SMS messages during the last season.

Fox used SMS messaging to give viewers a way to interact with their programming. In this particular case, viewers could vote for their favorite contestant. This engagement has boosted the show's ratings to the number one show on television among several demographic splits.

Fox Sports allows users to also use texting to interact with live talk-show broadcasts by voting or even sending in comments. Jim Rome now reads almost as many "text hits" on his show as he does emails. Allowing customers to interact has been a boost to the brands that have adopted interaction. The rise of talk-radio can be attributed to its interactive nature.

Obviously, talk-radio and television represent a small minority of businesses. However, SMS offers business a unique opportunity to become interactive with its customer base and it can do so without having to hire a 24/7 call center staff to make this happen.

Recruiting and SMS Marketing

So, how can companies take advantage of SMS marketing? One approach is to use SMS as a business automation platform for recruiting. It especially makes sense for companies seeking to fill hourly positions.

There are approximately 76 Million hourly workers in the US. Retail, food service and hospitality turnover rates are anywhere between 100-130%. The business costs of filling these positions - planning, advertising, screening interviewing - are hard to quantify but are significant nonetheless. SMS marketing offers a unique way to reach potential employees while significantly reducing the cost of providing information back to applicants. Coupled with mobile web sites which deliver standardized job applications and contact forms, SMS becomes a very powerful medium with which to recruit and track applicants.

It also offers a sales channel that you may not have considered: your own customers. If you have a public establishment, your customers could be one of your best marketing channels. Parents with college-age sons and daughters looking for work can easily forward your recruiting text message to them. Virtually any shopper who knows somebody looking for work or who frequents an establishment is a potential marketing channel.

SMS' viral nature cannot be overstated. It is the ultimate in social media as it doesn't require special software or hardware that isn't already available on almost all of the cell phones that your customers possess.

While there may be opportunities for companies to market to customers using targeted to the variety of smart phone operating systems, it will be quite a while before this provides a significant return on investment.