M3 Mobile Marketing e-Newsletter (March 2010)

 

Privacy in Mobile Marketing? Appsolutely.

By Ray Terwilliger

Mobile Marketing provides a very effective and personal means by which companies are now interacting with their customers. Adherence to standard principles for opting in and out of mobile campaigns is the first and most critical step towards ensuring the continued success of this form of marketing. Ultimately, the user is, and should continue to be, in control of their handset and should only receive the content that they choose to receive.

Recently, Apple, the creator of the popular iPhone and iPod touch, announced that it will no longer allow applications (apps) that use location-based information enabling mobile advertisers to deliver content based on a user’s geographical location. 

Countless theories abound as to the business motives behind Apple’s decision, but it is clear that consumer privacy was paramount. As mobile marketing becomes a more pervasive means of customer communication, consumer protection and privacy become increasingly more important. Compliance with the FTC’s CAN-SPAM Act and other privacy-based regulations is critical as location based services, such as those recently banned by Apple, place end users at increased risk of receiving spam content.

The mobile marketing industry continues to take proactive steps towards monitoring new technologies and regulating itself accordingly. Although location-based mobile technologies will inevitably permeate the marketplace, this technology will only truly flourish when content is restricted to those who affirmatively elect to receive it. As demonstrated by Apple’s decision, we’re just not there yet.

Ray Terwilliger serves as Vice President of New Channel Development and General Counsel for M3 Mobile and is available to answer any questions that you might have on the mobile marketing industry and getting you started with a mobile marketing program of your own. Ray can be reached by email at rterwilliger@m3mobile.com or by phone at (610) 279-3355 x2260.

 

Apple Blocks Location-Based In-App Advertising

By Dan Butcher

Apple has taken a stand against location-based advertising within applications for the iPhone and iPod touch, a decision that has ramifications for the mobile advertising industry as a whole.

The company announced that it is blocking applications that use location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user's location. Industry analysts are speculating whether that decision could have something to do with its pending acquisition of mobile ad network Quattro Wireless.

“Apple is acting like they normally do—they want to control the experience and the use of their devices and applications,” said Neil Strother, Kirkland, WA-based practice director at ABI Research. “This a way for them to make sure the end user isn’t getting spam and controlling what goes into iPhone applications.”

“If advertising is the main purpose, they frown on that, so the question is, what will Apple do with Quattro—will they want to control that as well?” he said. “I’m assuming that in a larger context, Apple wants to control advertising through its devices, the iPhone, iPod touch and iPod, making it easier for developers to integrate ads, and location is a part of the targeting process.”

“Location is a strong indicator of what people want to do to make advertising relevant—what advertiser wouldn’t want to know who’s nearby and send them a relevant offer?”

Since the launch of the App Store, Apple has controlled which applications get in. Developers have to play by the company’s rules or they do not get in.

How in-application advertising will be targeted is an open question.

What is clear is that Apple did not pay $275 million for Quattro to not make mobile advertising a priority, despite some recent eyebrow-raising comments by Steve Jobs.

 “It’s speculation, but I believe Apple will make it easy for developers and therefore advertisers to use the system they put together with the Quattro acquisition, although what that will be exactly I don’t know,” Mr. Strother said. “They will find some way of integrating Quattro’s network with applications.

“I don’t know if the move to block in-app location-based ads is directly linked to the Quattro acquisition, but there may be a connection,” he said. “Apple’s message is that if you’re tying location to your application, it has to bring something of value to the end user first and foremost.”

 

Kimberly-Clark's Cottonelle Turns to SMS: How Does US Roll?

By Giselle Tsirulnik

In an effort to solve one of life’s greatest puzzles once and for all, Kimberly-Clark's Cottonelle brand has launched a multichannel campaign asking Americans whether toilet paper should be hung so that it rolls over or under.

The brand has teamed up with actors and real-life married couple Tori Spelling and Dean McDermott to determine how America rolls. Consumers can text their votes (UNDER or OVER) to short code 30241 to put an end to the "Great Debate" for good. Consumers can vote through March 6.

“The challenge for the Cottonelle brand was to create excitement about its mainline toilet paper in a category that consumers generally do not give a lot of thought to, let alone get excited about,” said Cherie Kamin, brand associate manager at Cottonelle, Neenah, WI. 

“Cottonelle brand toilet paper tapped into the differing opinions on the right way to roll toilet paper, bringing this national debate to life through all channels,” she said. “We wanted to allow people to vote in many ways, and one important way was immediately through SMS after seeing the outdoor ads.”

 

Cottoning on

The mobile strategy aimed to facilitate conversation and engagement with the Great Debate through voting and driving users to the program site.

The Cottonelle brand used mobile to promote the debate and conversation across multiple media touch points.

High-profile outdoor placements featured the "Text Over or Under" call to action, which encouraged America to vote if they roll their toilet paper over the top or if they prefer their toilet paper to roll under when it is situated on the holder.

After the voting period has finished, users can receive the final tally announcing the winner.

Additionally, mobile banners drove users to the WAP site at http://VoteRollPoll.com, helping to facilitate the Great Debate in the mobile space.

“The overall challenge is that toilet paper is a low involvement category and this is a different messaging approach, generating conversation through a fun way,” Ms. Kamin said.

“The mobile channel acted as a way of facilitating immediate response from an outdoor campaign, and the remainder of the mobile campaign served as a valuable addition to the other screens used for advertising, for example,  television and Web," she said.

“Mobile overcomes the lag time between the viewing of an ad and the ability to engage with the brand. The target can immediately interact with a campaign through mobile at any point throughout their day.”

“Mobile is a great channel when the campaign is asking for a simple action, such as voting ‘over’ or ‘under.’”

 

Mobile Barcode Breakthrough Means We May Soon See Them Everywhere

By Ciara Byrne

Mobile barcodes seem to be about to go mainstream, with Nokia and Sony Ericsson pre-installing barcode readers on many of their handsets. Barcodes in mobile are generally used to retrieve web content. For example a barcode on a poster can be scanned and used to retrieve a web page where the user can win a prize. At the Mobile World Congress in Barcelona earlier this week, Virginia-based Neustar announced the first clearinghouse for barcodes, which allows barcodes from any advertiser or brand to be linked to web content independently of the barcode reader or service provider being used.

A Brief Guide to Barcodes

1D barcodes are familiar to all of us. These are the codes on products that are scanned at a supermarket checkout. The amount of data which a 1D barcode can carry is limited. 2D barcodes are more robust and can hold a much higher density of information. These are the barcodes used in mobile applications. Typically, a scanned barcode is used to retrieve a web page. Barcodes can be embedded in any kind of printed material such as product packaging, print advertising, posters and even web sites. A camera phone can also display a barcode, which allows a reader to identify it.

Direct barcodes have the URL of the associated content embedded in the code. With indirect barcodes, the URL is of an intermediate web site where the code is looked up in a database and the corresponding content URL is returned. This means that the content URL is dynamic and can be updated. Scanning the code from a mobile phone also allows contextual and demographic  information about the mobile user to be retrieved and used to tailor the content returned.

Applications

There are myriad applications for 2D barcodes. Advertising and marketing is one favorite. Advertisers love barcodes because they are opt-in (the user chooses to retrieve the brand information) and trackable. Pepsi embedded 400 million 2D barcodes in products in the UK last year. Codes are also often used in supply chain and logistics management.

Barcodes displayed via mobile phones are used in ticketing applications like public transport in the Philippines or loyalty programs in stores like DIY retailer Hornbach in Germany. In South America, Telefonica is using barcodes to allow access to telecommunications services such as mobile package updates (when a user wants to update their service package by, say, adding an SMS bundle). Barcodes on a phone can even be used to authenticate the parties involved in mobile money transfers. Barcode vendor NeoMedia did a fundraising campaign for Haiti at the Mobile World Congress show, where attendees scanned posters around the conference site and Nicomedia contributed $1 for each scan. NeoMedia’s CEO Ian Macready told me that the number of barcode scans going through their system is up hundreds of percent in the last 6 months over the previous 6 months.

Obstacles in the Barcode Market

A number of obstacles have prevented barcodes from going mainstream in mobile in the US, although they are already widely used in Japan. First of all, the readers need to be available on phones. Pre-installs of barcode readers are increasing, but users need to be educated on how to use the barcodes once they have a reader. The barcode market has lacked standards and interoperability, although NeoMedia said that great progress has been made in that area in the last 18 months. Finally, indirect barcodes could not be enabled across all players in the barcode ecosystem because of the lack of a neutral clearinghouse, although particular vendors could of course implement a clearinghouse for the barcodes of their own customers.

So Neustar’s clearinghouse announcement supplies one of the final parts of the puzzle. Neustar’s VP of mobile services, Diane Strahan told me that the clearinghouse will give advertisers more control over how a barcode associated with their brand is used. For example, it prevents counterfeit barcodes associated with the brand being used to execute fraud or copyright infringement. It allows mobile carriers to add additional data, and it means advertisers can customize and update the content associated with a barcode. Neustar will charge a transaction fee per scan for use of the clearinghouse.

 

Mobile Shopping in US Will Grow to $2.4 billion This Year: ABI Research

By Dan Butcher

In the United States, mobile shopping rose from $396 million in 2008 to $1.2 billion in 2009, and ABI Research projects 100 percent growth this year to reach $2.4 billion in 2010.

In 2015, shoppers around the world are expected to spend about $119 billion on goods and services bought via mobile phones, which will represent about 8 percent of the total projected ecommerce market, according to ABI Research. These numbers show that mobile commerce, specifically shopping via the mobile Web, is reaching critical mass.

“At the tail end of 2008, a trend started to emerge where we saw some retailers putting out mobile Web sites so that consumers could get in touch with them and buy things from them,” said Mark Beccue, Tampa, FL-based senior analyst of consumer mobility at ABI Research. “Unsurprisingly, the leaders were eBay and Amazon, which have been aggressively marketing their mobile Web sites.”

“Estimates at end of 2008 for mobile shopping transactions using a mobile device were relatively small, $396 million in U.S., a small portion when you look at overall ecommerce figures of $132 billion in the U.S.,” he said. “At that time I said that people will start to do this for a number of reasons, to make impulse buys and convenient purchases such as flowers and pizza, swapping out cash transactions.”

It turned out that growth in the mobile commerce space outpaced ABI Research projections as typical use cases expanded.

2009 awakened something of a giant.

“What we’ve found over the latter part of 2009, particularly fourth quarter, is that consumers are using mobile online shopping for price-comparison purposes,” Mr. Beccue said. “The economy seemed to have something to do with this change, as people became sharper about how they were spending their money.

“Consumers actually started buying items while they’re in a physical store from somebody else using their Web-enabled handsets,” he said.

ABI Research provides analysis and quantitative forecasting of trends in global connectivity and other emerging technologies.

Mobile commerce reaches the mass market

The driver for mobile online shopping in the U.S. has been the recent sharp spike in smartphone adoption and the corresponding enthusiasm for mobile Internet, Mr. Beccue said.

Also, many more retailers have been launching mobile commerce Web sites.

“I was surprised when I reran the numbers, because my original forecast for 2009 from a year ago was around $800 million in the U.S., but my revised number for forecast for 2009 was around $400 million more,” Mr. Beccue said. “It shows that savvy consumers are taking advantage of the mobile channel for shopping purposes.”

ABI Research’s estimate of mobile purchases in the U.S. grew from $396 million in 2008 to $1.2 billion in 2009, but what is even more significant is the fact that the overall estimate of ecommerce transaction was flat year-over-year, remaining at $132 billion in the U.S.

Those numbers mean that mobile commerce represents an ever-growing slice of the ecommerce pie.

That trend led to ABI’s projection for this year. Mr. Beccue said that mobile transactions will probably double in the U.S. to reach somewhere around $2.4 billion in 2010.

Mr. Beccue said that while definitions of mass-market adoption vary, a more than fivefold increase in mobile purchases in one year indicates significant consumer interest.

Even that $1 billion-plus turnover in the U.S. is dwarfed by the size of the mobile online shopping market in Japan, which exceeded $10 billion in 2009 alone.

“In some markets mobile shopping is huge, like Japan, where almost 20 percent of ecommerce is done via mobile, which is an anomaly,” Mr. Beccue said.

This market is growing solidly in Europe too, and is expected to outpace the U.S. by the end of 2010.

A longer-term driver in global terms is the fact that in many less-industrialized regions, mobile is virtually the only way to access the Internet.

Not only does mobile online shopping allow shoppers to manage their time better, but in the fourth quarter of 2009, an interesting trend emerged: Consumers were checking out products in bricks-and-mortar retail stores and using their phones for comparison shopping.

“It appears that moving forward we’re going to see almost all merchants looking to put out a mobile Web site so they can compete, because everybody else is doing it,” Mr. Beccue said. “The mobile Web site has slightly different functionality, but merchants have tied in a shopping cart and streamlined the purchasing process so consumers can buy things quickly.”

A subset of mobile commerce is the trade in virtual goods, generally associated with online gaming.

This too has seen rapid uptake, as mobile payments are the best option for online purchases under $20 or so, and this way of shopping is especially suitable for those consumers—often young gamers—without credit cards.

All of these trends led to ABI’s prediction that mobile transactions will reach $119 billion globally in 2015.

“We will see fairly steady growth in the mobile commerce space as a result of retailers coming on board and ecommerce as a whole as growing steadily, as well as increasing mobile Internet penetration,” Mr. Beccue said. “Consumers are becoming aware of it more and more.

“We will not see an explosion so much as fairly steady growth going forward,” he said.