Unfolding a Decade in Mobile Marketing

My 30 years in the technology industry included a stint as the CEO of a company that built chips for Ericsson’s first GSM handset. In August 2000, I became a director of Flytxt, a mobile marketing start up. It was at a time when there was virtually no mobile marketing market. However it was an exciting time, the dotcom boom was still on and the SMS use had become a social phenomenon which was a real harbinger of the social networking blockbusters to come.

The initial years of the decade were dominated by product promotions using SMS. Flytxt was involved with some significant breakthrough campaigns during this time. The first ever “txt’n’win” campaign was in 2002 to promote Cadbury’s range of products in the UK. Offers were put on 65 million chocolate bars and 5 million people sent claims by text. Cadbury’s still uses “txt’n’win” promotions.  Another campaign initiated in the same period was “Orange Wednesdays”. It was a UK based loyalty campaign offering Orange subscribers two tickets for the price of one at any of the UK’s Cinema outlets. Orange subscribers who took up this offer were a third less likely to churn than those that didn’t and Wednesday moved up three places to become the most popular weekday for UK Cinema attendance. Orange Wednesdays still runs and in multiple countries.

Orange Wednesdays was one of the few campaigns where the operator was to do anything more than be a messaging channel. Till then the campaigns were typically organised by specialised mobile agencies on behalf of FMCG companies. The technology platforms were home grown and the software developers were an essential part of the campaign team. The operators’ only involvement was to pick up a few cents for each message sent. All of this was about to change, and it changed quickly and dramatically. The catalyst was the ring tone. The ring tone market, like SMS itself was an unexpected success. The first big year was 2003, and in 2004 it was a multi-billion dollar business. Operators realised that they were the gateway to a huge and valuable customer base and not just for voice and data products. Today VAS is in itself a $50 Billion market for operators and their partners, but it was the ring tone that got it all started.

When operators started large scale mobile marketing, they ran the campaigns themselves and they dominate the value chain in terms of revenue share.  The campaigns bypass specialist agencies like Flytxt and are usually very crude. The operator’s IT department developed the tools themselves, and collaborated with their marketing colleagues to design and launch campaigns. Pushing the maximum number of offers was the main motive. The promotions going to a music loving teenage daughter were the same going to her business focused father, politically involved mother and cricket obsessed brother. This will probably be known as the carpet bombing era of mobile marketing.

Historically, the growth of mobile marketing has been constrained only by resource capacity. As one mobile VAS market leader asked me in 2006, “why do I need smarter marketing, I am growing at 75% per year?” It seemed difficult to give a convincing answer at that point of time,  but, at Flytxt, we always knew the need for smart marketing would become critical sooner than later. We further decided that we would focus on building platforms for non technical marketing staff of large enterprises to run sophisticated campaigns with ease and without dependency on IT teams or any third party agencies. Our main goal would be to provide powerful platforms for all aspects of commercial mobile communication. In 2007 we sold our agency business and concentrated on that task.

Where is mobile marketing today? From a revenue standpoint, despite significant activity on financial alerts, and polls and voting, mobile marketing is still dominated by the operators selling their products. However, as we predicted, there is now urgency amongst operators to improve methodologies and get better results. Multiple factors like, market saturation spiralling competition, increased portfolio of products, increasing prepaid base, and declining ARPUs are putting pressure on the operators. Subscribers are now more mature and are increasingly irritated by unwanted marketing messages.

Operators can address some of these critical issues by using platforms that add a degree of automation and targeting. These tools typically come from players in the CRM and Business Intelligence world. If the tools that have been used historically by operators can be called generation one platforms, then the CRM and BI tools, in terms of mobile marketing, should be considered generation two.   A handful of operators have jumped to generation three platforms like Flytxt’s Neon and I will try to explain the difference between these last two generations.
 
The mobile channel is significantly different in that it gives immediate access to customers and is the most intimate. Mobile marketing can, and should be like holding a conversation with your customer.  In order to best address these unique attributes you need a platform that can analyse, target, deliver, track and respond in real time. To do this the platform needs to have a dedicated campaign database that is continually updated and fully integrated with the campaign management functionality and message gateways. Generation two products are not built this way and have very limited real time functionality.  For more information about Neon, talk to our experts.

As platforms are upgraded, campaigns will get more relevant and there will be less SPAM. Other major trends are also underway. IVR, MMS, WAP push and video services in general are expected to become more important. LBS, search, contextual ads, mobile payments and ad funded services may also live up to their promises. One possible vision is of mobile operators morphing into media companies that can accurately value and market its “advertising inventory”. Rather, I think that the next really big business will also be a big surprise (like SMS and Ring Tones). As a wise man said to me not long ago, “the Google of Mobile will not be Google”.

One fundamental mantra however, is not questionable or dependent on unpredictable events in the future. It should be an obsession with marketers and that is, “learn as much as you can about your customer and use every possible piece of that information to converse with him or her in a relevant and timely manner”. I would be proud to celebrate the tenth anniversary of Mobile Marketing along with the birth of Flytxt, both with the knowledge that we have helped our clients achieve this level of understanding of their customers, and benefit significantly from it.