It would be safe to say that the current economic storm is affecting all nations and all industries. Despite the fact that the Asia-Pacific region is ‘Mobile Manic’, the Mobile Marketing sector is not immune from feeling the pinch.
It comes as no surprise therefore that industry bodies such as the Mobile Marketing Association (MMA) have been asked, “How will the credit crunch affect the uptake of mobile marketing? Will the pressure on marketing budgets mean that mobile loses out to more traditional modes of communication with consumers?”
The answer is surprising: While budgets are being slashed, and cautious spending is the daily mantra, there is still room for mobile marketing to grow as an effective marketing form with strong ROIs.
After all, marketing in a downturn could well be the smartest, strategic move a company makes.
A research study of 600 firms by McGraw-Hill found that companies that increased marketing spend during the 1981 recession averaged higher sales growth than those that didn’t, both during the recession and three years after. In fact, during the 70’s downturn, American Express unleashed the ‘Don’t leave home without it’ campaign and BMW promoted itself as ‘The Ultimate Driving Machine’. Both went on to achieve category leadership in the upturn. Post-stagflation, in the early 90’s, when others were cutting back, Nike tripled its marketing spend, overtaking its main competitor Reebok and as a result, came out of the recession with profits nine times higher than going in.
We are a mobile generation. Think about it: How many people do you know who do not have a mobile phone? Virtually none. With over four billion people now owning mobile phones worldwide, it is common sense to assume that mobile marketing will also see huge growth.
The increasing uptake of 3G services and vastly improved device interfaces are improving the user experience for millions of mobile subscribers as access becomes smooth and instant. Brands are harnessing the immense impact of interacting with consumers via their mobile phone. Tapping into the key insight that consumers want to interact with their favourite brands based on affinity and also entertainment, fun, personalisation and productivity, companies are designing and delivering a range of applications that offer these propositions. With mobile technology now reaching critical mass, it is only natural that the mobile experience is all about enriching content and media with the convenience of converged services.
Applications like location-based advertising (LBA) are increasingly well-received by consumers, as they become more receptive to interacting with advanced features and services through their devices. This provides an excellent opportunity for businesses as they can tap on this avenue for promotion.
In an economic downturn, businesses may reduce their marketing budget but they are aware that marketing is still an integral part of their business that enables them to reach out to their target audience. However, traditional marketing campaigns can be costly. Mobile advertising, on the other hand, provides a more cost-effective alternative that can give the same, if not better, Return On Investment.
Furthermore, mobile advertising can be a complement to traditional marketing campaigns. For example, businesses can advertise in print or broadcast media and encourage consumers to send in an SMS for more information. A response will be automatically generated, increasing brand awareness and creating direct interaction between the brand and the consumer. However, for an integrated mobile advertising campaign to work well, the mobile aspect should be incorporated from the start.
The Mobile Conundrum
Mobile operators have already made progress towards lowering the cost of mobile ownership as the industry shifts its focus to growth in emerging markets. Low cost, all-you-can-use data and feature rich handsets will help to drive the adoption of micro-billing and micro-payments as well as mobile Internet, TV and video.
However, when embarking on mobile marketing, it is important to remember that consumer perception and adoption will need time and education. As mobility becomes truly ubiquitous, consumers will come to treat their phones as they do their computers and the utility curve for mobile applications will see a genuine uptrend. But marketers must approach interactions over the mobile channel in the right way, keeping the brand engagement or acquisition objectives firmly in their sights, finding the technology that fits rather than going with whatever seems ‘coolest’ and building faith amongst consumers that mobile marketing is a positive way to engage.
Moving away from the traditional consumer push model to one of consumer pull, brands should adopt the six central tenets of a positive consumer experience as outlined by the MMA’s global Code of Conduct: choice, control, customisation, consideration, constraint and confidentiality. When a customer knows that the messages they are receiving are trustworthy and of genuine relevance to them, then that is when a truly effective engagement between brand and customer can really begin to develop.
Rohit Dadwal is Managing Director, Asia Pacific, Mobile Marketing Association and is based at the MMA’s regional headquarters in Singapore. He joined the Mobile Marketing Association (MMA) in November 2008, having spent 8 years at Microsoft, during which time he was also a Board Member of MMA.