Contributed by Rohit Dadwal, Managing Director, Mobile Marketing Association Asia Pacific Limited
Getting messages through to consumers is the key marketing problem, and permission-based marketing looks to be the solution. After understanding what consumers want, instead of merely disseminating marketing messages to consumers, the next natural step is to ask for permission. In essence, permission-based marketing is simply the practice of obtaining permission from a consumer before sending marketing communications.
Practicing this form of marketing has its perks. Permission based mobile marketing allows consumers to overtly identify the branded communications they consider valuable, and indicate their desire to receive such communications. Its ultimate objective is to build a one-to-one relationship, via continuing engagement, making it one of the most successful methods of marketing. Permission-based marketing lends itself particularly well to the mobile channel, given the ubiquitous and personal nature of mobile devices and consumers increasingly intimate engagement with them.
Here are three major perks of permission-based mobile marketing:
(1) Increased effectiveness
Permission-based mobile marketing offers the potential to reduce waste in advertising spending by focusing marketing efforts on the consumers who are most interested in the advertiser’s products or services. It builds on the advantages that mobile brings as a channel (personal engagement and convenience) giving consumers and marketers more options. Mobile marketing is the only media channel that combines all of the following:
• Bridges above and below-the-line communications
• Takes a consumer from awareness through to conversion via engagement and through its inherent display, dialogue and payment capabilities
• Offers contextual relevance and real-time interaction
When marketing campaigns are run in accordance with the principles of permission-based mobile marketing, response and conversion rates tend to be significantly higher than for all other media channels.
(2) Improved targeting
Traditionally marketers segment their customer base through demographics like age and gender. Permission-based marketing allows the creation of an opt-in base of consumers complete with profiles that brands can use to tailor their messages based on consumers’ stated interests and/or ongoing behavior. Over time, this becomes a much richer way of segmenting the customer base, offering even more value to consumers and producing a better return on investment.
Brands and agencies report these additional potential benefits:
• The mobile medium encourages quick response; 90% of SMS messages are read within three minutes of receipt.
• Ability to provide targeted and contextually relevant messages
• Ability to fine-tune campaigns in close to real time
• Creation of long-term client relationships instead of single campaigns
• Entry into interactive dialogue instead of one-way communication
• Ability to remarket or retarget
• Creation of communities and fan groups
• Improved tracking and accountability
Vodacom, a subsidiary of the Vodafone Group, used an integrated media campaign to drive traffic to its upgraded mobile site in order to notify subscribers about their eligibility for an upgrade. The site experienced significant and sustainable traffic with an exceptional return on investment. Over a single month, the call to action, delivered via an MMS message, led to a 600% uptake.
(3) Enhanced preference profiles
Through permission-based mobile marketing, Mobile Network Operators (MNO) have the opportunity to gain on two broad counts: They can increase customer satisfaction and also open up new revenue streams by partnering with content creators and advertisers.
MNOs can also find potential value in permission-based mobile marketing through:
• Improved brand image and subscriber loyalty: Orange (UK) found that Bright Stuff, its permission-based messaging service, increased satisfaction among 35% of its customers. Additionally, a study by Alcatel-Lucent indicated that 48% of mobile youth would remain loyal to their operator if offered access to permission-based mobile marketing.
• A reduction in churn and potential to migrate subscribers to higher-value services
• The creation of new service offerings for specific subscriber segments
• Increased insight into subscribers and their preferences
• Increased ARPU: revenue from the advertising spend can outweigh the cost to deliver the media
• Acting as the mechanism for connecting consumers to valued brands
• Increase in paid-for, on-net, data network usage from subscribers and advertisers rather than losing revenue to over-the-top players
Permission-based marketing, practiced over the mobile channel, is attractive enough considering the increased rate of response, but the additional perks offered by this combination should not be ignored. Given the increased effectiveness, improved targeting and enhanced preference profiles available with permission-based marketing, savvy marketers are already looking for ways to leverage this new paradigm for their campaigns, This will help brands save unnecessary spending on advertisements, and let them focus on building a long-term relationship with consumers for compelling consumer engagement.