As the effectiveness of traditional mobile banner ads begins to diminish, consistent with current online trends, advertisers are likely to turn to more targeted messages that location-based mobile advertising can provide. Over the next decade, location-relevant marketing is expected to drive the advertising market.
Consumers make the vast majority of their purchases locally, thus presenting an enormous opportunity for mobile advertising to drive buying trends. One of the most significant impediments to the effective deployment of mobile marketing has typically been a lack of adequate location-based technology.
However, it is now becoming increasingly common for mobile devices to feature technology that the traditional online experience lacks, such as accurate mechanisms for predicting location of the user like GPS and triangulation. Nokia is predicting that half of its cell phones will come equipped with GPS by 2010.
The ability to track locally is the greatest advantage of mobile marketing and, using technology to calculate the location of the user will allow local businesses to reach consumers that are close by and ready to make a purchase. This will ultimately serve as a more effective and relevant substitute for the traditional methods such as the yellow pages, print and online classifieds, and online local business listings.
There are already signs that the major carriers are beginning to open up to this idea, which will ignite greater innovation in the space and make mobile more attractive as a marketing channel. Many companies have begun to play in this space, notably Google, which is pushing its mobile agenda with products like Android. Android is a software platform and operating system for mobile devices based on the Linux operating system and developed in conjunction with the Open Handset Alliance. With its acquisition of Tellme Networks Inc., Microsoft has already emerged as a formidable rival for Google.
As mobile marketing becomes a reality, it will initially be large national advertisers with considerable marketing budgets who engage the medium, but the real potential lies in helping local business reach their customers.
The first challenge is simply an issue of engaging businesses, educating them on the idea and benefits of mobile marketing, and, most importantly, executing on ad sales. There are a countless number of local businesses, but the only real way to sell to them is feet on the street. This presents a scalability issue for mobile marketing companies. The cost of hiring a large number of qualified sales people is simply too much of an investment for most mobile marketing companies, particularly with the return being unclear at this time.
Other impediments are the carriers, and, simultaneously, regulators. Carriers must give consumers greater freedom of choice about which devices they choose to run on their networks, and which applications they run on those devices.
If marketers are going to see mobile as an attractive channel then they must know that consumers are engaged with the device in ways beyond simply making phone calls, sending text messages, and surfing the Web. The main enablers are those companies that are choosing to create open platforms to encourage rapid innovation in mobile marketing technology and, as their products begin to receive greater attention from the market, many of the major mobile companies will follow suit by offering more open platforms for developers.
In short, although mobile marketing has an appeal to large companies such as Google and Microsoft, the greatest asset it may provide is the potential to enable small and medium businesses (SMB) to target and engage a much larger pool of local, potential customers. In order for mobile marketing to become successful, consumers will need to embrace the idea by responding to these new channels and completing transactions through their devices, which should not be difficult once this technology is both cheaply and widely available to them.
The fact that major carriers are beginning to jump on the bandwagon is a positive sign that greater innovation in the space is eminent, which will make mobile more attractive as a marketing channel.