TA of Mobile Marketing

THE

BY ELISABETH A. SULLIVAN//STAFF WRITER

esullivan@ama.org

Eastern markets like Japan and

South Korea have led the way

for mobile marketing. While the

power is shifting noticeably

westward—especially as the

iPhone’s technological tentacles

wrap around the globe—U.S.

marketers can learn from Eastern

marketers’ mobile experience.

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TA

Three or four years ago, U.S. marketers and consumers were marveling at the innovative mobile marketing going on in high-tech markets like Japan, South Korea and Hong Kong. Many Eastern mobile marketers seemed eons ahead of their coun-terparts in the West as they reached their increasingly wired

customer bases with creative, relevant, multichannel marketing. A lot has changed in the mobile space and leading-edge mobile

marketing efforts are being produced in our own backyard now—thanks in large part to the iPhone. But there’s still much to be learned from the path laid out by those intrepid mobile marketers who’ve gone before. In that spirit, Marketing News spoke with mobile marketing experts in Hong Kong and Singapore to find out what Eastern market-ers have learned about the mobile channel after experimenting with it for the better part of a decade. We also spoke with marketers closer to home to get a sense of how U.S.-based marketers have been inspired by Eastern marketers’ mobile advancements.

Keep in Mind Mobile’s Extensive Reach“We can see what’s happening in Europe and Asia and the Middle East, and we can get an example of what’s going to trickle down here,” says Zak Dabbas, co-founder and managing partner of Punchkick Interactive Inc., a Chicago-based mobile marketing � rm. “I was just in Tokyo a few months ago and I couldn’t believe the smartphone penetration that I could con� rm just visually. Everyone was holding a smartphone.”

� e Asia-Paci� c (APAC) region has approximately 2.4 billion mobile subscribers and could surpass the 3 billion mark by 2012, according to the GSMA, a global mobile communications association. By next year, APAC marketers are expected to spend $7.7 billion on mobile market-ing, according to ABI Research, a market intelligence company based in Oyster Bay, N.Y.

In some Asian markets, such as areas of Indonesia and China, mobile isn’t just a primary mode of marketing communication, it’s the mode of communication to reach consumers, says Rohit Dadwal, managing director of the Mobile Marketing Association (MMA) Asia-Paci� c, the Singapore-based branch of the global mobile industry organization. Dadwal, who previously worked for Microso� and MSN in India, says that millions more Indian consumers are reachable through mobile than through TV.

While marketing channels abound in the United States and, thus far, the Internet has been this country’s primary medium for digital market-ing innovation, there’s a growing segment of the U.S. population who turn to their mobile phones for everything from communication and Inter-net access to entertainment and banking. “Something really fundamen-tal is happening here,” says Alexander Muse, co-founder of Big in Japan, a Dallas-based mobile app developer (so named because “there’s a lot of cool stu� going on in Japan”). “� ere’s a whole class of people living in mobile … and they don’t ever touch a desktop [computer].”

As of January, there were 234 million mobile subscribers 13 years old or older in the United States, 42.7 million of whom owned smartphones,

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according to Reston, Va.-based comScore Inc. (Some organizations esti-mate that the U.S. mobile subscriber base is much larger.)

� e numbers paint a pretty clear picture of the United States’ increas-ingly mobile culture (see page 5 for Marketing News’ exclusive research on American’s mobile use). Yet last year U.S. marketers spent approximately $390 to $400 million on mobile advertising—just a fraction of marketers’ overall digital ad spend in 2009, which hovered around $25 billion, accord-ing to Forrester Research. (To really hammer the point home, compare U.S. marketers’ mobile spending with the more than $15 billion they allocated to search marketing in 2009.)

� e reach is there, experts say, and it’s time to up the ante on mobile marketing. U.S. marketers are “right at the edge of a quantum leap,” says Sean Rach, director of digital media and corporate events for Prudential Corp. Asia, an insurance and � nancial � rm in Hong Kong, and chairman of the MMA’s APAC region. Rach, who previously was managing director of marketing agency OgilvyOne Hong Kong and also worked in marketing at Sprint, says, “Asia could lose the lead in mobile if North America gets serious.”

Think Strategically, Not Just TacticallyWhen Dabbas started Punchkick Interactive four years ago, he and his team struggled to educate companies on why they should add mobile marketing to their mix. One year later, companies were interested in texting and the mobile Web. Now Punchkick Interactive is “getting more iPhone app inquiries than we can handle.”

� at’s great progress in a relatively short period of time, but the problem is that too many U.S. marketers still think of mobile as a disruptive medium best suited for � ashy, gimmicky, one-o� marketing e� orts that aren’t necessarily integrated into a company’s overall marketing strategy. In leading-edge Asian markets, many marketers ask themselves, “ ’How does mobile � t into the expe-

rience?’ whereas in the United States, I think a lot of marketers are still looking for that bright, shiny object,” says Maria Mandel, senior partner and executive director of digital innovation at OgilvyInteractive in New York.

Leading-edge Eastern marketers think of mobile less in terms of its disparate tools and more in terms of how those tools might complement their branding e� orts, loyalty programs, retail environments, value propo-sitions and overall marketing strategies, which brings us to the next lesson.

Look Beyond the iPhone AppOf the 240 million-plus mobile subscribers in the United States, only about one-quarter of U.S. smartphone users own iPhones, according to comScore. Yet many U.S. marketers are primarily gearing their mobile e� orts toward the iPhone and seemingly nine out of 10 times, they’re focusing on applications, Dadwal says.

In the United States, mobile channels such as SMS (aka text messaging), MMS (multimedia messaging), Bluetooth, voice and the mobile Internet “are not being totally explored for marketing needs,” Dadwal says. “I believe [the iPhone app] is the North American stepping-stone into mobile,” which is a good � rst step, he says, but in markets in Japan, South Korea, Australia, Hong Kong and Singapore, marketers’ focus is broader and “the consumers are getting exposed to every channel of mobile.”

For example, SMS is the lowest common denominator in mobile commu-nications throughout the world and many marketers are running creative text-based campaigns in Eastern markets, Dadwal says. Beginning in 2008 and running through last June, Procter & Gamble’s Pampers brand ran a successful interactive SMS campaign in the Philippines called the Pampers Hearts Club in which it sent parents text messages containing baby care tips tailored to babies’ developmental stages, he says. And parents could receive points toward gi� certi� cates for toys and entries into contests to win educa-tional grants by texting in specially marked codes on Pampers packages.

� e campaign was intended to build brand a� nity and customer reten-tion. It succeeded in compiling more than 100,000 consumers’ contact information for the Pampers database and reportedly boosted Pampers Hearts Club members’ diaper consumption by 50%. As a tangential bene-� t, the text-based campaign “positioned P&G as a custodian of health for babies,” Dadwal says.

In Japan, marketers make great use of mobile’s interactive capabili-ties with QR codes—short for “quick-response codes,” which are two-dimensional bar codes that consumers can scan with their mobile phones’ cameras to access product reviews, pricing information, coupons, links to company Web sites, pretty much any marketing information that a company wants to make available through mobile, experts say.

Country/Market Population (in millions)*

Mobile subscribers (in millions)**, and as a percentage of population

Internet users (in millions)**, and as a percentage of population

Landline phones (in millions)**, and as a percentage of population

China 1,300.0 634.0 (47%) 298.0 (22%) 365.6 (27%)

Hong Kong 7.1 11.4 (161%) 4.1 (58%) 4.1 (58%)

Japan 127.0 110.4 (87%) 90.9 (72%) 47.6 (37%)

Singapore 4.7 6.4 (137%) 3.4 (72%) 1.9 (40%)

South Korea 48.5 45.6 (94%) 37.5 (77%) 21.3 (44%)

U.S. 307.0 270.0 (88%) 231.0 (75%) 150.0 (49%)

Source: Central Intelligence Agency’s World Factbook, www.cia.gov * in 2009 ** 2008

By the Numbers

U.S. marketers are “right at the edge of a quantum leap. … Asia could lose the lead in mobile if North America gets serious.”

Sean Rach, director of digital media and corporate events for Prudential Corp.

Asia and chairman of MMA Asia-Pacifi c

Population (in millions)*

Mobile subscribers (in millions)**

Internet users (in millions)**

Landline phones (in millions)**

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QR codes serve as a bridge for marketers to provide a depth and breadth of information that’s not possible in just one marketing chan-nel—and they’re on seemingly everything in Japan. “� ere’s mobile activation of everything in the whole society; every newspaper, every print ad has QR codes,” Prudential’s Rach says. Most mobile phones in Japan now come with code-scanning capabilities preinstalled.

While some U.S.-based marketers are experimenting with incor-porating mobile-ready bar codes into their campaigns, many have yet to try adding bar codes to their packaging or campaigns because most U.S. consumers don’t have the appropriate technology in their phones to scan them. But mobile bar codes are gaining ground stateside. For example, Muse’s company is best known for its ShopSavvy bar code-scanning app for iPhones and Android phones, which has more than 4.5 million users and is attracting 30,000 additional Android users and 10,000 iPhone users each day, he says.

Create an Effective Call to ActionU.S. mobile marketers face several barriers that Eastern marketers don’t, including SPAM and telephone regulations that prevent market-ers from reaching out to consumers through their mobile phones if those consumers haven’t opted in to receiving mobile marketing messages. Such barriers make U.S. marketers’ mobile calls to action even more important.

Yet experts agree that marketers in Asia have a much better handle on incorporating prominently placed mobile prompts in all of their mobile channels, pushing well beyond U.S. marketers’ current formula of attempting to drive tra� c to mobile tactics via PR-generated buzz or vague prompts in print ads. In Japan, mobile prompts “aren’t o� to the side. � ey aren’t � u� ,” Dabbas says. Rather than just vaguely directing consumers to “text 12345 to � nd out more,” he says, “your call to action, it really should entice people.” It should give consumers a sense of what they’ll get if they make the e� ort to text your company or log on to your mobile Web site.

OgilvyInteractive’s Mandel agrees: “I’m always telling my clients this is simple direct marketing. You need a strong call to action if you’re going to get people to engage.”

Some U.S. marketers are on the right track, Dabbas says. For example, last year Punchkick Interactive worked with UPS Corporate Workforce Planning and its agency, TMP Worldwide Advertising & Communica-tions, on an integrated campaign called “Problem Solved” to recruit job seekers for UPS. � e interactive campaign ran calls to action through social media, e-mails, SEO, radio, TV and print, among other chan-nels, that prompted consumers to seek out more information on UPS job opportunities through their mobile phones. It generated about 345,000 job applications for UPS. [Editor’s note: Read more about the UPS campaign in the March 15 issue or online at MarketingPower.com.]

Make Mobile Part of Your Multichannel StrategyIn many Asian markets, “every aspect of brand managers’ brand campaigns … actually has started having a call to action for

mobile,” Dadwal says. Print ads all have a mobile plug directing consum-ers to text for more information or to visit a mobile Web site. Consumer touch points are better integrated and “mobile is becoming an integral part of the 360-degree market-ing campaign.”

Not only do they incor-porate mobile into a broader multichannel strat-egy, but also they make the most of mobile’s own chan-nel portfolio. In February and March 2007, Motorola ran an award-winning mobile marketing campaign in Hong Kong called “Say Goodbye,” which was created by Ogilvy & Mather Asia Paci� c and � e Hyperfactory, a global mobile marketing � rm based in Auckland, New Zealand, that aimed to create a relevant, value-added experience in which consumers could interact with their Motorola RAZR phones.

Say Goodbye allowed Motorola users to wish their loved ones well as they passed through Hong Kong International Airport’s new terminal by taking a photo of themselves with their phones’ cameras, adding a goodbye message to it and texting it to a special phone number to get the photo displayed on interactive LCD screens in the terminal. Users also could send pre-recorded goodbye messages from soccer star David Beckham or Taiwanese pop star Jay Chou using their phones’ Bluetooth capabilities, says Pruden-tial’s Rach, who worked at Ogilvy Hong Kong when the campaign was created.

Motorola’s mobile marketing e� ort won a competition run by Hong Kong International Airport to get the use of the new terminal’s digital screens for free—the airport’s own way of marketing its new advertising opportunity. � e campaign also garnered media atten-tion and reportedly boosted handset sales signi� cantly. � e goodbye messages from Beckham and Chou ended up being forwarded tens of thousands of times all over the world, spreading goodwill for the Motorola brand.

Motorola execs smartly considered the medium—an airport termi-nal—and asked themselves, “How could we be useful in that space? And we stumbled upon this great idea of saying goodbye,” Rach says. Motorola wanted its mobile message to be so useful and relevant to consumers that it would move beyond its retail setting. “� e inten-tion was for [consumers] to spread that message out” and to turn the mobile marketing e� ort into “more than just a one-o� activity.” m

Find Out More @ MarketingPower.com

Find links to all the cited resourcse below by visiting MarketingPower.com/MarketingNews and clicking “current issue” or April 30, 2010.

Articles:Don’t Screw Up Your Mobile Marketing OpportunityMarketing News columnist and Forrester Research analyst

Josh Bernoff explains how to optimize and integrate mobile into

your marketing plans in a way that satisfi es customers and meets

business objectives.

Hold the LineThis Marketing News how-to article reviews some of the

technical ramifi cations and legal requirements regarding mobile

coupon programs.

On the MapLocation-based mobile technology targets value-added marketing

messages to consumers on an as-desired basis. This Marketing News

article outlines what marketers need to know to do right by this

marketing channel on the verge of adoption.

Webcasts:Mobile Marketing How-To: A Starter Guide for the NoviceBrennan Carlson of Lyris Inc. explains the basic “how-to’s” of mobile

marketing, defi nes key terminology and provides examples of how

to get started.

Community:Visit the Marketing News blog to access a video on the Motorola

mobile marketing campaign referenced in this article.

67% of the world’s

population is using

mobile phones,

compared with only

26% who use the

Internet, according

to a February report

from the United

Nations’ International

Telecommunication

Union.

67%

MobilePhone

26%

Web

Scanning the Globe

GS1 a Brussels, Belgium-based

global trade group that aims

to provide standards that make supply

and demand chains more effi cient, is trying

to create industry standards for bar code

designs so that, for example, codes used

on a product’s packaging to convey pricing

data to the checkout scanner also could hold

marketing information that consumers could

access by scanning the bar codes with

their mobile phones. The group also

supports preinstalled bar code scanning

software on mobile devices to aid in

consumer adoption.

World Use

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