Today, marketers need to target specific customer groups with specific messages. Many companies use sophisticated analytics to better identify segment audiences and the appropriate marketing messages. Mobile commerce can help provide an even more precise focus—identifying a single consumer for a single message at the exact right time. The mobile phone is much more than another emerging marketing medium. It totally rewrites the rules of marketing.
The eternal challenge of all marketing is to place the right message in front of the right people, at the right time.
Since the advent of broadcast media, mass marketing has been all about creating the greatest number of advertising contacts and responses at a reasonable cost. Traditionally, there are only three ways to increase the number of responses from a campaign: improve the campaign messaging, increase the number of people exposed to that message and target the message as best as possible through selected media outlets.
In recent years, there has been a proliferation of new advertising channel opportunities as well as a growing sophistication in analytics used to segment audiences and fine-tune messaging. The Lifetime Cable Channel targets women between the ages of 25 and 54 and it’s one way to reach that targeted demographic.
A lot of display advertising in airports specifically target business travelers. Ads for a car wash scroll across gas pump displays. Companies pay Google to have their sites pop up at the top of the list for selected searches. ATMs are starting to market on their screens. Marketers develop campaigns that optimize messaging for audience segments as well as the media they use to send those messages. However, for the marketer, it’s still all about exposing the right people to the best messages.
So what exactly is mobile commerce and how does it fit into targeted marketing? Mobile commerce is commercial activity that occurs when consumers use their mobile devices to make purchases, just as they use credit or debit cards today. As a new generation of mobile devices comes equipped with personal account management software and Near Field Communication (NFC) chips compatible with special payment readers in merchant checkout lines, consumers will be able to use their phones just like credit and debit cards. I’ll discuss the technology behind this in a little more detail later in the paper, but it’s important at this point to keep in mind two very key concepts.
First, mobile commerce is nearly upon us. The technical infrastructure needed to support mobile commerce and turn mobile devices into devices with purchasing power is largely in place today. In fact, mobile commerce is happening in pilot programs and as a real service on a limited scale around the world.
Second, and this is most important to the topic of mobile marketing, mobile devices are not passive devices like credit and debit cards. Mobile devices provide two-way communications. Not only do they transmit account information at the point of sale during a transaction, but these devices can also receive information. This information can be personal account information and it can also be personalized advertising.
Imagine for a moment a world in which consumers receive their own unique product messaging on their mobile devices. Let’s say you’re a marketing manager for a large chain of specialty coffee shops, and you feature a new block of beverages each month. This month’s special is an entirely new offering called Orange Mango Banana Blend.
Your plan is to promote this beverage with regional and weather-specific messaging. The promotions will go to the coffee shop’s rewards program members who have opted in to receive your promotions on their mobile devices. Any of those customers who have unused coupons in their phones will be reminded that they can apply the coupon to this special. Finally, you set two possible triggering events that will send the customized promotional messages. People will receive a message when they are either within 500 feet of a shop or when they touch their phone to a smart display poster (more about these later).
When campaign launch day arrives, you pull real-time weather data into the database (there happens to be a cold snap in the Northeast and a heat wave in the far South). Based on known consumer buying preferences, prevailing weather conditions and the specific beverage you wish to promote, you send a personalized message to the mobile phone of each appropriately targeted customer. The campaign proves to have an exceptional conversion rate, and you know exactly which customers responded to the promotion.
As a marketer, you might think, “Nice idea—in your dreams!” It might surprise you to learn that virtually every piece of technology needed to make this fictional promotion exists today. Furthermore, the entire mobile commerce ecosystem, including consumers, advertisers, phone service carriers, merchants and data managers, is wrestling right now over the business models that will enable this level of target marketing. It’s happening in pilot programs in the United States and Europe; to a limited extent, it’s happening in programs offered by some phone carriers (you might already have received text message advertisements from your carrier) as well as special service offerings from financial entities. Mobile marketing is rising up all around us and for anyone involved in consumer marketing and advertising, this train is about to leave the station.
What’s really at stake for merchants, advertisers, consumers and service providers? Let’s take a closer look.