Too-High Hopes?

OK, OK, we get it. Major brands are speed-dialing into mobile marketing plans at a pace that makes their previous move to the Web seem glacial by comparison. There are no hard numbers yet to show how much actual revenue is starting to flow into mobile, but we do know that intentions are running very high, perhaps too high. A new survey of major brands in Europe by Airwide Solutions showed that 89 percent expect to be using SMS or MMS messaging campaigns by 2008, with a third predicting that 10 percent of their marketing budgets will go to mobile by then.

Wait a sec. Who is doing the hyping now?

To be sure, Airwide's survey is skewed to European brands, where mobile marketing has a substantial head start. They also polled only 50 major companies, so a few answers one way or the other can push the percentages. Drilling into some of the details of the survey exposes a bit more moderation. For instance, 42 percent of brands still have never used SMSMMS promotion. And 52 percent of brands said they would move less than 5 percent of their marketing budgets to mobile in the next two years. But still, considering that most advertisers barely send 7 percent of their marketing budgets to the Web after a decade of evolution, the embrace of mobile seems a bit overwhelming.

Some of this may be driven by daunting expectations about the effectiveness of this platform. Airwide found 47 percent of marketers predicting that 5 percent to 15 percent of messaging recipients would request more information. And 34 percent of brands expect that between 5 percent and 20 percent of the audience will move on to a financial transaction. Even Airwide CMO Jay Seaton told me he was taken aback by those results. "When I first looked at that I thought, 'what would they base that on?'" he says. "In most mid-sized companies with any type of marketing campaign you expect 2 percent or 1 percent response rates depending on the medium. But one of the interesting things is the expectations of the brands was that mobile marketing campaigns will be an order of magnitude greater."

There is anecdotal evidence that mobile campaigns have unusually high response rates. Many SMS campaigns can spur interactivity among 10 percent or more of the recipients. Of course, most mobile programs, especially in the U.S., are opt-ins, so you are starting with an audience that is dialing up a short code in one way or another to get information on your brand. The self-selecting nature of mobile seems to build naturally higher conversions into the model. Nevertheless, in the Airwide survey about a third of marketers also expected that between 3 percent and 10 percent of messages could lead to a purchase. No matter how you slice, dice, qualify or rationalize the numbers, there may be some unreasonable expectations for the mobile platform to perform. It is also clear that the high hopes for mobile are being driven for now by the brands themselves, not the agencies. Among the big companies asked, 70 percent said their agencies do not regularly propose adding mobile to the campaign mix.

My guess is that many brands rushing in to mobile will experience a letdown at some point in the next year or so, if only because they are bringing some outsized expectations to the platform. Curiously, Airwide's survey also reveals frustration with mobile marketing, since 55 percent felt unsure how to reach their target audience on the platform, and 51 percent wanted more information about how users responded to the message. In fact, I would argue that one of the early choke points for the flow of marketing dollars to mobile will be a lack of data and audience knowledge coming back from the carriers.

Because of the highly personal nature of mobile, the network operators are sitting on some of the most detailed knowledge of end-user behavior and interactivity the marketing world has ever known. Theoretically, they not only have rich profiles of every recipient of a message, but they will know when and where a user interacts with a mobile message, what other cell phone behaviors clustered around that response, even how many others in a geographic area had similar responses, etc. etc. Imagine how a campaign could be tweaked with that level of market intelligence.

The problem is, you are years away from seeing anything like this kind of reporting from your carrier partners. A major bone of contention, a real source of continued frustration for marketers, will be how much the cellcos can and will share. According to Seaton, carriers often have this sort of data about how consumers interact with messages on the network, but usually it is not collected in ways that make sense to marketers, and the raw traffic data is not mapped against the subscribers. People aren't thinking about the data as information that can be invaluable to the value chain of content and marketing. "It's not that the operators have this information in usable formats and are keeping it to themselves," says Seaton.

More to the point, mobile carriers are not thinking like publishers yet, even though these operators say they want to be media platforms now. In reality, they don't understand yet the nature of the network information already on hand, nor the importance of sharing that information with the value chain. I think that the big question running beneath the mixed signals coming from the Airwide survey is whether cellcos, which basically are tech companies, will meet marketers' apparently high expectations by transforming their infrastructures and corporate cultures into media companies.

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