With 3 promoting its latest range of 3G handsets, O2 launching i-mode, and T-mobile promoting its Web 'n' Walk service, marketers could be forgiven for thinking that they've missed the boat if they're not using these channels.
The reality is rather different. Jupiter Research's European Wireless Forecast, published this summer, predicts that it will take until 2010 before 3G penetration exceeds 50 per cent of mobile phone users. Another report, by mobile messaging company Moben, reckons only 17 per cent of phone users use more than basic functions.
Small wonder then that marketing is dominated by basic text-and-win activity.
It's easy to understand, instant and cheap for promoters. However, users are becoming bored, says Douglas McDonald, client services director at mobile agency Sponge. "There is an element of diminishing returns with SMS campaigns. They've lost their novelty as entrants find themselves on the end of 'loser' messages for text-and-win promotions."
Mass-market brands have to balance what is possible given current phone functionality with what represents effective marketing. "If you're a brand like Walkers, Coke or Egg, you don't want to exclude 40-50 per cent of the market," says McDonald.
Brands should focus on what they can do today rather than tomorrow, he adds, as they may be surprised by what they can achieve by being imaginative.
Brands are using mobile marketing to enable everything from basic competitions to direct-response handling, customer service management and brand building. Even text-and-win can be given a new twist.
For a recent Fanta on-pack promotion, Sponge addressed the issue of loser fatigue by providing a reward for all entrants. The promotion, by agency bd-ntwk, had digital cameras as prizes but was given added value by offering free Java games, which could be downloaded or played online. These provided an incentive to enter the competition more than once and drove sales.
"It's all about coming up with compelling mechanics that people want to interact with," says McDonald. "If you have web-only entry, you only get about 25 per cent of the interaction."
New options
Growing handset sophistication is opening up new marketing opportunities.
For NEC in the US, Sponge developed a branded phone in conjunction with Fitness Magazine, which accessed nine fitness tools, such as a body mass index calculator, and delivered exercise and diet plans. Users can input their exercise regime and are reminded if they skip a session. "When Java phones have higher penetration, such applications will be used to deliver brand experiences," says McDonald. "It will be cheaper for users as they won't have to pay to receive content."
Pamir Gelenbe, Flytxt director of corporate development and co-founder, says mobile marketing is being viewed as a set of tools that can achieve a range of objectives. Sales promotion is one area where mobile has become key, and it provides an opportunity to request more information. But, "the most promising area is mobile advertising where you use the handset as an ad display surface," says Gelenbe. "You can run ad campaigns using SMS, but next-generation handsets will offer a more compelling experience."
Flytxt recently ran a campaign on 3 for the launch of the film It's All Gone Pete Tong in which users were directed to a microsite where they could watch the trailer. In five days it was downloaded 100,000 times.
The agency also established the Orange Wednesday campaign. The two-for-one cinema ticket deal has helped the mobile operator establish an ongoing rapport with its customers.
Such activity shows how mobile is becoming central to integrated marketing activity. Gelenbe points to a traffic-driving campaign undertaken by Flytxt this summer for theme park Alton Towers. Radio ads invited listeners to text a shortcode to receive a mobile ticket in the form of a code. The two-for-one offer promoted the new Rita: Queen of Speed ride in May and June. Mike Lorimar, marketing manager of Alton Towers, says the promotion "delivered an ROI of £2.97. We were delighted by the results and are running similar campaigns." Response rates exceeded expectations by 462 per cent.
The ability to target consumers with rewards of real value will broaden mobile's appeal. However, brands have been reluctant to trust mobile to deliver high-value items such as coupons, but that could be about to change.
"Pull campaigns are not getting the response of a couple of years ago," says David Tymm, chief executive officer at mobile technology company i-movo. "Increasing the value of mobile rewards improves redemption, but security has always been an issue. Send out tokens for 'free beer' and you won't believe how quickly they circulate."
Until now, the only way to improve security has been to install bespoke EPOS equipment to validate redemptions, as Flytxt did for Orange Wednesdays, but this is too expensive for many companies. However, i-movo claims to have solved the problem with a system that works off existing EPOS equipment and doesn't require additional investment. Its mobile transaction system (MTS) works with all phones, guaranteeing penetration, through the existing electronic funds transfer system trusted by retailers.
I-movo has signed deals with several partners to accept mobile tokens.
A deal with kiosk firm Itbox will allow companies to print out mobile coupons, while another partner, Felix Group, has signed a deal with Alliance & Leicester to roll out 10,000 kiosks combined with ATMs. "Text has been established as a very effective medium and more than 90 per cent of texts are opened," says Tymm. "What has been holding this market back has been the difficulty of redeeming vouchers."
Kwik Save is using SMS to promote short-term deals - WIGIGs (when it's gone it's gone), which are a key element of its appeal to price-sensitive shoppers - and drive footfall.
Direct response agency C360 has devised a scheme called Kwikies, whereby pre-registered customers are texted a day before price deals are advertised. Members pay 12p per text.
Flexible tool
"It is competitive intelligence over the other bargain hunters and has been incredibly successful," says C360's founder, Nick Gillett. "Of members, 92 per cent find the scheme useful; 75 per cent say they've taken up more offers as a result, and 60 per cent say they wouldn't have bought without the text alert. The average basket size for text receivers has risen 50 per cent."
Gillett says mobile is proving to be a much more flexible tool for mobilising people quickly than previously thought. C360 and PHD iQ have helped the RSPCA to develop an instant database that allows it to focus supporters on a specific issue. The charity has been gathering members since 2003 and used the technique in a recent campaign for better conditions for hens. "Within 12 hours, 10,000 responded, including some not on the list, demonstrating a viral effect," says Gillett. Those who joined were thanked by SMS and asked if they wanted to be kept abreast of developments to build a database.
Gillett believes MMS has a part to play with brands that have more media-mature customers, such as the gaming market. Mobile content, including ringtones and wallpaper, was used to launch Capcom's Resident Evil console game. Participants were rewarded with a 'zombie groaning' text alert.
Although MMS provides a better experience, SMS will be with us for a long time yet, reckons Andrew Bud, executive chairman of mobile carrier mBlox. The firm is behind Mastercard's new text-based fraud-alert system, which aims to cut response times by 90 per cent. Bud thinks customer service is the hot new space for mobile. "SMS is increasingly being used to deliver a WAP push," he says. "It's a simpler user experience than messing about with URLs and also a way of drawing consumers into a richer media experience."
Some marketers are using MMS, but often only as 'pull' campaigns due to the cost as it is about five times as expensive as sending an SMS. For example, Mobile 365 is enabling Sky's Soccer AM to ask viewers to send in clips of amusing things they've seen at football matches. "The beauty of mobile is that it's cheap and response rates are excellent, but if you're imposing a high delivery charge you're shooting yourself in the foot," says Mark Jones, sales director, UK & Ireland, at Mobile 365.
Indeed, brands will have to handle the transition from SMS to MMS, WAP and 3G carefully, and in some cases they may have to offer overlapping services.
Mobile Interactive Group (MIG) provides mobile services for The X Factor, which pulled in six million votes last series. This year, mobile options will enable viewers to interact across a range of options. They can vote, text the studio, send pictures, subscribe to alerts, download videos via WAP and have video streamed to their phones.
The growing potential of mobile is underlined by ITV's decision to launch a mobile strategy in partnership with MIG, says its managing director, Barry Houlihan. "Mobile is a growing way for viewers to interact with ITV. We're taking the same solution to advertisers. ITV delivers a huge reach."
It is likely that those brands that test mobile's possibilities today will be best placed to take advantage as its potential develops, but there's plenty for brands to explore now.
WALKERS RUNS MOST SUCCESSFUL TEXT PROMO
Walkers' 'Win an iPod mini' push, featuring a standard text-to-win mechanic, is the most successful text promotion ever, claims Douglas McDonald, client services director at Sponge, which provided mobile technology for the campaign.
Mobile users texted unique codes found on Walkers crisp bags to enter a draw to win one of 10,000 iPod minis. Draws were held every five minutes in September, and once a day in October and November.
Winners were contacted by text or email, while losers were sent a piece of music trivia to make the message less harsh.
McDonald believes the campaign was successful because it caught the user's imagination. Usually, there is a fall off with promotions but, with this one, the last day was the busiest.
"It changed consumers' behaviour because they looked at the best time to play, often waiting until the early hours of the morning to enter, bargaining that they had a better chance of winning. Live feeds to a web site gave an indication of text traffic," adds McDonald.
CUERVO HOLDS PARTY VIA TEXT DRAW
Tequila brand Cuervo wanted to run an event celebrating Mexican independence holiday Cinco De Mayo and turned to mobile.
Splendid Communications devised a PR, print, outdoor and radio campaign, which invited consumers to enter a text draw to win tickets to a party at London's Scala club.
Cuervo also used i-movo's secure voucher-based mobile platform to manage the guest list. Winners were sent an invitation by SMS, which they replied to with a code-word to receive a unique text ticket, which the door staff verified with PDAs.
Kirianne Green, brand manager at Cuervo, says: "By using text message invites, we allowed our target audience to communicate with us in a way that best suited them."
Eighty per cent of those consumers who were invited responded to the campaign.
NEW LOOK USES HYPERTAGS IN PUSH
To back the launch of New Look's 'New Now' clothing line, the retailer teamed with mobile marketing company Hypertag for an interactive outdoor ad campaign.
Interactive posters were deployed on 96 Adshel bus shelters nationwide.
The push used hypertags, which send data to mobiles via infra-red or Bluetooth.
For two weeks, from 25 September, thousands of £5-off vouchers were offered, along with gift vouchers of up to £250.
Customers showed the voucher, which they had downloaded to their mobiles, at the till in New Look stores. The store clerk then entered a code into the till.
For the larger gift vouchers, worth £10-£250, customers were asked to phone in a number and their address. Items were sent out to winners by post.
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