• by Steve Smith , Staff Writer @popeyesm, October 31, 2005

Yes, they can hear us now. But it's time for marketers to understand what works and what doesn't when it comes to mobile marketing. This is not a test. I repeat: This is not a test.

Media mobilization begins -- now.

With more than 180 million subscribers to wireless services in the U.S., marketers are chomping at the bit to deliver location-based content to consumers. But many wonder whether advertising on wireless devices (phones, Blackberries, and other hybrid gadgets) will evolve into a viable media platform. Can marketers leverage the highly personal "third screen" without pissing everybody off?

More than a third of mobile customers are already doing more than squawking on their cell: 66 million exchange text messages and 25 million check news and information each month, according to M:Metrics. ESPN claims 500,000 unique visitors a day -- yes, each day -- to its mobile Web site, where it runs banner ads from Allstate Insurance and even interstitials for Gatorade.

Mobile marketing "is viable because it has scale and there are behaviors that back it up with usage statistics," says Courtney Acuff, associate director, wireless marketing specialist for Starcom IP's Digits unit. According to Acuff, nine Starcom clients have included mobile marketing programs in their media plans. A pioneer in wireless research, Acuff is already deep into her second generation of surveys on user tolerance for mobile ads. After years of educating clients on the potential of wireless marketing, she says she's asked about the mobile component "in everything from consumer packaged goods to insurance and retail."

The toe-in-the-water stage is ending faster for mobile than it did for Web marketing. Major brands like Dove, Starburst, and McDonald's have already tested the emerging platform. The Mobile Marketing Association and wireless carriers are developing rules to govern consumer opt-ins and mobile commerce. Short message service, or SMS, which enables consumers to opt into an exchange with brands, has become the entry point for advertisers as the messaging platform has become standardized and interoperable across carriers.

"There's a lot of steam now that there is a national addressable market," says Jay Emmet, president, mBlox, one of the largest U.S. message aggregators. "We will see things in the fall and holiday campaigns that are much more accelerated than we have seen before." The early learning is in, and some basic rules of mobile engagement have emerged. Key demographics like business travelers and kids are surprisingly responsive to polite, well-integrated mobile messages and opt-ins. Third Screen Media has created an ad network serving banners to about 5 million unique visitors per month to mobile Web sites, including those of CBS Sportsline, TV Guide, and WeatherBug.

Banners for a Vonage campaign across the Third Screen network enjoyed a 2 percent click-through rate. One of Acuff's sports clients sponsors SMS text alerts for ESPN fans. The program has doubled its reach in each of its three years. According to JupiterResearch, 37 percent of young adults say they are willing to receive mobile marketing messages in exchange for something they value.

Rule #1 Show Me the Value

Value is the key word among early adopters to mobile marketing. If you want to get into consumers' pockets, you'd better be useful, relevant, and unobtrusive. Zingy publishes the mobile Vindigo City Guide and creates custom channels of sponsored local content for brands like Cadillac, because sponsorship in this medium offers a clear, seamless exchange of usable tools for brand exposure. "The consumer is getting content they wanted anyway," says Samantha Saturn, vice president of marketing for Zingy. Mobile content users don't browse information on phones; they are even more task-directed, so "it's really important that [ads] not be in front of the experience," Saturn says. "All the ads are offer-based," says Heidi Lehmann, vice president of strategic alliances, Third Screen Media. "You have to have an offer that is relevant, provides immediate value, and is easy to react to." Third Screen's Dunkin' Donuts mobile banner campaign let users opt into an SMS coupon for a discounted latte, which they show to a store cashier.

The 4 percent click-through rates and 21 percent redemption rate on coupons surprised even Lehmann. "We had no idea there was so much reach and frequency," she says. The MMA is now considering a Wireless Application Protocol (WAP) banner standard that works on a broad range of handsets. Content brands like The Weather Channel and CNN are negotiating ad revenue splits with carriers who until recently had prevented publishers from running ad units on content that linked directly from their handsets.

Unlike the Web's free-for-all, nearly every mobile communication has demonstrable cost; consumers accept that they pay for each voice minute, ringtone, data service, and SMS exchange. Marketers are learning to leverage that perceived value. At Pod2Mob, which streams Web podcasts to phones, president Brad Zutaut believes that a subtle 15-second spot before a podcast educates consumers about the value exchange involved. "An intro ad, 'This podcast brought to you by...' makes people understand that there is a cost involved in podcasting, and here is a company that is helping to take away some of the cost."

Rule #2 Get Personal... ized

Yes, the risk of appearing intrusive on mobile gadgets is great, but so is the opportunity to get personal with consumers and become enablers of their surprising obsession with personalizing the technology via ringtones and wallpapers. Marketers are already experimenting with mobile creative that engages the medium's unprecedented intimacy. Third Screen's campaign for UPN's "Veronica Mars" went beyond SMS alerts to offer show times and wallpapers; it even let fans opt into a phone message with show highlights from the lead actress Kristen Bell. "Campaigns that are targeted and make a personal connection are the ones that will be effective," Lehmann says.

The biggest surprise about mobile marketing is how consumers are turning a media platform into a media megaphone and a tool for self-expression, not merely consumption. Marketers hope that they will nurture brand loyalty by delivering personalization features via wireless devices.

For example, to promote Secret Sparkle Body Spray for Procter & Gamble, Juiced Wireless invited teens to customize a Sparkle screensaver with their own image and text and send it to friends' phones. A tiny media buy on AOL's aim instant messaging client went viral, resulting in 65,000 free screensavers (typically valued at $2 apiece) that teens passed along to an average of four friends.

At its best, mobile marketing is an ideal solution to the problem of a fragmented media landscape where consumers control their own media networks, express themselves via blogs, and use handheld devices to maintain a close network of friends. Facilitating self-expression becomes the most direct way into that loop. "This is a whole new domain," says Nick Desai, chief creative officer, Juiced. "What [consumers] want is personalization, interactivity, and value."

The big payoff for gaining polite access to highly personal mobile devices is the opening of a direct and potentially lucrative connection between vendor and customer -- a pitch that links to a call. Mobile ads can contain direct dialing links, allowing a click-to-call model that makes some marketers, particularly mobile search firms, salivate. "This is potentially a huge opportunity," says Brian Lent, CEO, Medio, since mobile search firms like Lent's could be looking at per-call pricing of more than $20, compared to typical $3 pay-per-click models. The tantalizing power of mobile pay-per-call models became clear earlier this year in the wireless campaign for tsunami relief. "We got a 10 percent call-through rate for that," Lehmann notes.

Rule #3 Be in the Moment

Marketers are starting to explore the "temporal" power of wireless devices by shaping products that work best in a given place and time. Epicurious.com's Epi To Go program not only sends a recipe to a cell phone but also turns it into a shopping list for use in the grocery store, and even includes a targeted wine suggestion from sponsor Turning Leaf. "The whole point of mobile applications is to give you...temporally and geographically relevant information that is personal and actionable," says Epi To Go's Desai. Partner Catherine Jaccodine, vice president and general manager of CondeNet's Epicurious.com, is "amazed at the adoption rate," with 20,000 sign-ups since January on virtually no promotion and a "six-figure" sponsorship deal from Gallo.

While WAP-enabled banners are growing rapidly, the majority of traditional marketers rely on other media to initiate dialogue. SMS short codes are quickly becoming de rigueur for activating immediate consumer responses to TV, Web, or print assets. Take Fox's "American Idol" or CBS' "Rock Star: INXS," for example. Both TV shows issue a call to action inviting fans to text message their votes within a specific time frame.

"Tying a mobile extension into a broader communication plan, a larger media initiative, is the No. 1 goal, and is how we have had success getting it sold through [to clients]," says Acuff. A campaign by Starcom ip had g4tv viewers vote during a live videogame awards event, and then opt-in to receive SMS tune-in reminders. Like a URL, a well-crafted short code features the brand (i.e., dial 44888, or g4vtv) and is immediately actionable.

Rule #4 Mobile Is Still Hip

Like the early days of the Internet, mobile marketing has a hip, young vibe that well-established brands want to get in on. The venerable Cadillac brand appeared cooler by underwriting a special content channel on Zingy's Vindigo mobile city guide network. The content directed users to trendy shopping areas and restaurants in 10 major markets. "It was a demographic issue for Cadillac," Saturn says. The brand needed to "to do innovative marketing to show its innovation."

"We don't use [mobile] for everything, just the youth base," says Michael Bailey, interactive media supervisor, GSD&M. But mobile banners became a part of MasterCard's "Priceless Experi-ence" marketing campaign, which promoted an internship program. "It served our needs pretty well. Our interactive rates were a lot higher than normal," Bailey says.

From the agency perspective, mobile is not yet appropriate for a broad range of campaigns, but it's beginning to show strengths in penetrating highly targeted segments against specific media programs.

Rule #5 Keep It Clean

Guidelines for selling content and contacting mobile customers with marketing offers have been established by the Mobile Marketing Association. Keeping unsolicited messages out of the system is the goal. After watching mobile spam infect the European market, U.S. mobile players have been remarkably disciplined about limiting consumer opt-ins to specific offers and not building or trading phone lists.

Nevertheless, concerns over mobile spam are growing as carriers follow Europe's lead and allow third parties to access billing systems and their consumers in order to purchase content online to send to phones. Mobile marketing should include user education explaining how SMS works, restrictions on opt-ins, and clarifications on the costs associated with each message.

The dangers associated with abusing wireless marketing are enormous indeed. When surveying attitudes toward mobile marketing, In-Stat received more comments than analyst David Chamberlain ever witnessed in a consumer poll. "People feel very, very strongly about this," he says. "What will make them crazy is this notion of having an unsolicited message appear on their phone. They are vehemently against that."

And yet, curiously enough, almost 35 percent of consumers say they would be willing to trade personal information for relevant offers. "It's a double-edged sword that requires a lot of caution," Chamberlain says.

Leaps and Hurdles

The small screen remains a real challenge, GSD&M's Bailey warns. The agency's MasterCard mobile execution focused on moving people to an e-mail dialogue where the brand could engage the audience more deeply. "I'm still not convinced it is there yet," he says. "It's still not something that lends itself to information delivery." Mobile marketing is not yet a reach vehicle, since only 11 percent of wireless customers, about 20 million, report they have interacted with a company via SMS, and 42 percent say they never want to, according to Jupiter. As it is, reaching consumers who want to is an unprecedented headache on the most non-standardized medium in history; there are 500 different kinds of handsets deployed among 20 different carriers. There are a dizzying number of formats that need to be accommodated by an equally daunting number of technical enablers.

Agencies that have navigated these obstacles often find that their content partners have not. Only a handful of media companies offer mobile product lines or fee schedules. And then there are the metrics, or lack thereof. A simple opt-in message offers little more than a click-through about the consumer. Wireless carriers hold onto their subscriber databases with a vengeance. "We're used to branding studies and filling out some forms online, but on the phone all we have to look at are metrics that are older school," Bailey says.

Mobile marketing is almost certainly worth all of these headaches and more, but not only because it can drive eyeballs, responses, or sales. All the early mantras of mobile marketers related to exchanges of value with consumers, facilitating personalization, and creating temporal, actionable offers, are really only the guiding principles that will govern an increasingly fragmented media world.

The wireless phone is real estate that consumers control all of the time, in all locations and conditions. Such a highly personalized and guarded world will require a new etiquette, new forms of restraint, and substantially more creativity than marketers, agencies, and content companies have employed in the past. Yet gaining entry into the world of mobile marketing, where personal consumption, communication, and expression happen at once, offers more opportunity than limitation. Muses Acuff: "The possibilities are what you can close your eyes and think of."