M3 Mobile Marketing e-Newsletter (August 2010)

 

Ringing Up Sales: Phones are retailers’ latest route to back-to-school shoppers’ wallets

By Jenn Abelson

Merchants looking to boost sales during the critical back-to-school season are courting students where they spend most of their time — on their phones.

Kmart is planning next week to blast out daily text messages with promotions for the back-to-school season. J.C. Penney Co. is displaying interactive ads on iPhone apps that allow users to view new outfit combinations for the fall and find the closest store. And American Eagle Outfitters is giving away free smartphones to consumers just for trying on a pair of jeans — no purchase necessary.

Many retailers are realizing they can no longer afford to neglect the mobile space, especially for back-to-school, the second-biggest shopping period after the holidays. Consumers last year spent about $1.2 billion on goods and services purchased via mobile phones and the market is expected to reach $2.1 billion by the end of this year, according to Mark Beccue, a senior analyst with ABI Research in New York.

Retail analysts say the mobile push is especially critical this year as businesses attempt to combat sluggish consumer spending. The National Retail Federation reported that overall back-to-school spending will increase to $55.12 billion, but average spending for college students is expected to dip slightly.

While some mobile deals send consumers straight to merchants’ websites, American Eagle is trying to lure shoppers into stores with its denim giveaway. Every customer who tries on a pair of jeans between July 21 and Aug. 3 receives a free smartphone after signing up for a two-year service plan, starting at about $40 per month without data. Shoppers can choose from more than 40 phones, including the $500 Droid by Motorola, and customers also receive a $25 gift card redeemable online or in American Eagle stores.

“The smartphone is just a way for us to be relevant in how our shoppers are living their lives and also supports our own mobile commerce initiatives,’’ said Jani Strand, a company spokeswoman, who added that American Eagle’s marketing budget is funding the promotion.

Traffic is “growing exponentially’’ every month on American Eagle’s mobile commerce site, Strand said, as phones have become essential personal shopping assistants. Mobile devices allow people to compare prices as they browse in stores, snap photos, e-mail potential purchases to friends, collect coupons from retailers, and make instant purchases online.

While walking through Faneuil Hall Marketplace last week, Jessika Foss, 21, stared down at her phone as she searched for directions to the closest Johnny Cupcakes shop. Foss clutched the royal blue G1 device with affection as she listed the mobile coupons she already receives from retailers like Bakers shoes and Borders books, and was giddy over the idea of getting a new smartphone at American Eagle.

 “I’m definitely going to try on some jeans. I could always use another smartphone,’’ said Foss, who is attending Rhode Island College this fall. “My laptop just sits there and gathers dust. I do everything on my phone — Facebook, shopping, directions, everything I need.’’

Penney sees opportunity in young consumers like Foss and is trying to build its mobile momentum this summer. The company has created a special mobile hub with videos and a place to opt in for weekly texts on the season’s back-to-school looks. The department store chain also is one of a select group of companies using Apple’s new technology, known as iAd, to launch interactive ads that appear on music, lifestyle, and entertainment apps of iPhone and iPod Touch users. For example, a promotional mock-up on TMZ’s app displays a Penney banner emblazoned with “Picture your new look’’ at the bottom of the screen.

The ads, which launch on Aug. 4, will have multiple features, including a style mixer for scrolling mix-and-match outfit combinations and a “shake to shuffle’’ option to create a surprise outfit combination. Favorite outfits can be voted on and saved, with product details texted back to users for reference on their trip to the store.

“Through our mobile marketing initiatives, we’re able to reach teens where they are and provide them exciting, media-rich, interactive content that allows them to explore and discover the J.C. Penney brand,’’ said Kate Coultas, a Penney spokeswoman.

It makes sense for retailers to experiment in the mobile space when consumers — particularly teens and twentysomethings — are increasingly migrating to social and mobile media to satisfy their need for news, information, and connections to friends, according to John Long, a retail strategist with Kurt Salmon Associates. Some industry observers see the back-to-school season as preparation for more extensive mobile campaigns planned for the holiday season.

“So far, no one has found the proverbial Holy Grail, but almost everyone — especially those in the teen market — [is] testing new strategies,’’ Long said.

At American Eagle in Faneuil Hall Marketplace, Lori Johnston and her daughters were split on the retailer’s back-to-school approach. Kelsey Johnston, 20, said she didn’t need another phone and preferred deeper discounts. But her 16-year-old sister, Aly, saw a golden opportunity to finally join her peers with a smartphone simply by trying on a pair of jeans.

“I’d definitely be interested in checking it out,’’ she said.

 

SMS: The gateway to mobile advertising

By Lynnette Luna

The theory that SMS usage would decline with the advent of more sophisticated messaging technologies associated with smartphones has become popular over the last few years. But this simple, robust technology refuses to lie down, continuing to drive revenues for operators and spurring innovative ways for advertisers to reach their targeted audiences.

Plain and simple, SMS is enabled on nearly 100 percent of the world's phones. While smartphones receive much of the attention because of their rich graphics and browsing capabilities, they still only represent a minority of users worldwide.  At the same time, the number of text messages sent in the US in 2009 reached 1.56 trillion, according to the Cellular Telecommunications & Internet Association (CTIA). In 2008, Americans sent just over 1 trillion.

A recent report from Local Media Search indicated that "SMS marketing is more versatile and effective than the traditional Internet with response rates that are often two times to 10 times higher." JP Morgan put the total U.S. mobile advertising for 2009 at $2.6 billion, an increase of 62 percent. About $2.3 billion of that was from text messaging. This year, the firm forecasts mobile advertising to grow 45 percent to $3.8 billion, with $3.2 billion attributable to SMS advertising.

A survey from Forrester Research says marketers rely on text messaging in various forms, with 56 percent using text for sweepstakes, voting or trivia contests. Mobile coupons also resonate, with 44 percent of marketers using them as a direct-response method that can be measured for effectiveness.

For instance, SMS users may send text messages for a chance to win certain prizes. In exchange, the advertiser receives a slew of new opted-in users who can be remarketed to. Jiffy Lube in Iowa offered radio listeners a chance to win free oil changes for a year along with a mobile coupon for discounts on various services. Of those who redeemed the mobile coupon, about 50 percent were new customers.

ABI Research urges marketers not to ignore text messaging as it pertains to the desire of consumers to obtain information about schedule activities, their finances and other personal concerns.

"They are willing to give up their mobile phone numbers in exchange for relevant information," ABI Research said. "This is an ongoing and sometimes overlooked opportunity for marketers to either provide these alerts directory or sponsor ones that media companies already offer ... Smart marketers will see text message alerts as an effective method for engaging with their customers on a regular basis. The must be careful to respect these customers, of course, by avoiding bombarding them with spam. But relevant text alerts can become a key tool in a successful mobile marketer's tool box."

SMS is quickly becoming a launch pad for more sophisticated and branded experiences on the mobile device.

Thomas Labarthe, vice president of mobile advertising with Alcatel-Lucent, suggests brands will take that concept even further. He said brands have an opportunity to tie SMS advertising with more lucrative mobile web actions such as mobile payments, web browsing, apps calls to action and location-based services. Alcatel-Lucent recently introduced its Optism Mobile Advertising Solution that links operators and their customers to advertising partners uses and SMS and MMS to reach audiences with permission and preference mechanisms.

"Although messaging may seem a bit old fashioned at first sight, advertisers now understand the potential of adding creative call-to-actions to this type of marketing format, leveraging the rich features of mobile phones," Labarthe said. "The volumes of people who use messaging is enormous. SMS might be their first introduction to more complex mobile services."

In February, French operator SFR launched on offering it calls "mobile street marketing," that enables retailers brands to send text messages to 3 million opt-in SFR subscribers in a 200 meter radius around their retail locations. The advertisement SMS can then be linked to a mobile website the gives more detail about the retail offer. SFR said its experiments of the service last year showed click-through rates of more than 8 percent. Initially, the service is available in Paris but will be extended nationwide by the end of 2010, SFR said.

With the ability to continually glean more detailed information about subscribers, Labarthe said operators and marketers can begin crafting more complex mobile services that are highly targeted and relate to a subscriber's preferences.

 

Why SMS Matters in the App Age

By Josh Gordon

The biggest advantage – and biggest drawback – to mobile marketing is the seemingly endless opportunity waiting to be harnessed.

Technology is advancing rapidly, consumer adoption is coming along – albeit at a much slower pace than the technology is evolving – and marketers are increasingly ready to dive in for a wide variety of reasons.

Most practical mobile approach
Consumers always have their mobile device with them, and now use it for texting almost as much as voice. Those realities present the most practical mobile marketing approach – SMS.

SMS campaigns are easy to set up, execute and measure.

While it is sometimes overlooked as an advantage for SMS campaigns, they are also easy to optimize – even after a campaign is in market.

Even campaigns with the most straight-forward calls-to-action, keywords, and shortcodes are prone to user error. Programming common misspellings of the keyword before and after an SMS campaign is introduced to the market is a practical method for ensuring success.

Most practical mobile messages
Like any other form of marketing, the first question to answer when designing an SMS campaign is, “Will the audience like this?”

It seems basic, but it is vital because few marketing channels require the commitment to personalized and relevant content that mobile demands.

The value exchange in the message must be worthwhile to end users to secure their initial opt-in and continued loyalty. One slip up, or message of questionable relevance, can trigger churn and put the marketer back to square one.

The safest messages are often the most practical, and useful, for the end user.

SMS campaigns featuring easily redeemable coupons or store location information with a click-to-call option are practical and extremely effective. Use them to grow the list of mobile subscribers, maintain engagement, or drive foot traffic and revenue at store locations.

Most practical mobile measurement
A practical approach to mobile marketing is ideal because the more practical a program is, the more measurable it is.

Whether a company is searching for a mobile business case or mired in its complexity, marketers must identify the easiest path to measurable results.

It is important to keep the “easiest” path in mind because the success of an iPhone application, for example, can be measured easily in downloads.

However, the reach for an iPhone application is limited when compared to an SMS campaign, and the cost structure is very different as well. SMS wins the reach and cost efficiency argument right now.

Above all, consumers value convenience when it comes to their mobile devices.

While myriad options for diving into the mobile medium exist, remember that consumer convenience – and a practical marketing strategy – should be the focus of every execution.

 

PETA Debuts Mobile Campaign to Stop Abuse of Elephants

By Rimma Kats

People for the Ethical Treatment of Animals has launched a mobile campaign that aims to raise awareness about the abuse of elephants and other animals in circuses.

The “Elephants Never Forget” campaign plans to run in conjunction with the Vans Warped Tour 2010 and is the first mobile initiative from the company.

“Mobile gives PETA the tools to deliver our messages to a laser-targeted demographic of young music fans at the Vans Warped Tour and allows us to get the word out about our future initiatives,” said Joel Bartlett, director of marketing at PETA, Norfolk, VA.

“No longer is a computer necessary to stay informed and get active for animals—that can now happen anytime, anywhere,” he said.

Mobile awareness
PETA focuses its attention on the four areas in which the largest numbers of animals suffer the most intensely for the longest periods of time: on factory farms, in laboratories, in the clothing trade, and in the entertainment industry.

Users can sign up to receive campaign information from PETA by texting the keyword NEVER to the short code 73822 (PETA2).

Those who text in will be subscribed to a mobile list for peta 2 – PETA’s youth division – and be prompted to visit the PETA tent at the Warped Tour where they can pick up a free prize.

“SMS gives PETA a new and effective way to reach out to members and raise awareness about issues, such as the abuse of elephants and other animals used in circuses,” Mr. Bartlett said. “Mobile is an invaluable platform for inspiring digital activism and getting people informed and engaged.

“PETA has signage around the Vans Warped Tour asking people to text in and stop by our booth for a free gift,” he said. “Our tour staff is talking it up at the booth and is equipped to answer questions about it."

Social outreach
The company has also been reaching out to our Facebook fans and Twitter followers.

‘We’ve begun letting supporters know about opportunities to get involved locally,” Mr. Bartlett said. “We’re excited about using text messaging to cut through the clutter of people’s inboxes and let them know what they can do to help animals.

“Next, we plan to roll out polls, contests, and viral campaigns to get more people engaged in the animal rights movement,” he said.

 

Statistics of the Month

·         Today, nearly three out of four U.S. retailers have some kind of mobile initiative in place, yet many of them are still in pilot stage.

·         Consumers last year spent about $1.2 billion on goods and services purchased via mobile phones and the market is expected to reach $2.1 billion by the end of this year.

·         Mobile advertising is expected to grow by 45 percent to $3.8 billion, with $3.2 billion attributable to SMS advertising.