| Rewarding users receiving marketing works - within limits |
| Thursday, 06 November 2003 | |
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Mobile Media 7th November 2003 - Giving users some kind of a reward for receiving marketing has long been part of the mobile marketing lineup, but it hasn't always been employed successfully. Some brand owners - including confectionary maker Cadbury's and music channel MTV - use onpack or on-air promotions to get users to sign up. But mobile marketing firms building a database other companies can market to don't have the luxury of brand awareness and need to offer users some kind of incentive or reward to entice them to sign up.U.S. company Spotcast followed in the footsteps of a Swedish player that gave regular phone users free call time in exchange for listening to ads before and during their phone calls. Spotcast, which offered the same feature over mobile, gained some traction in Asian markets early on, but the concept of free mobile airtime for ads didn't stick. Pamir Gelenbe, director of corporate development and co-founder of UK mobile marketing firm Flytxt, points to UK company The Mobile Channel, which attempted to create a database of users for SMS marketing by awarding people £0.05 (US$0.08) per SMS marketing message they received. They money could be donated to a charity, for example. But TMC never managed to reach critical mass. Others have had more staying power. Germany-based mobile marketing agency Mindmatics started its operations in 2000 with Mr. AdGood, an opt-in SMS marketing service that rewarded users with points for receiving marketing messages. The points could be exchanged for cash - but more commonly were used in exchange for ring tones and logos. The Mr. AdGood brand remains alive and well in Germany and Austria, while the UK arm of Mindmatics has kept the concept but re-branded it Red Alertz. Anders Hakfelt, managing director of Mindmatics UK, concedes that the company's database didn't initially become the cornerstone of the Mindmatics business the way the firm had initially expected. "The first [Mindmatics] product was database marketing," he explains. "The problem was that it costs money to build [a database], and you have to get to critical mass before you are taken seriously." As the downturn in the mobile data market hit, the concentration on database marketing proved difficult. Mindmatics refocused its business and started building marketing applications - though the database stayed as part of the portfolio. "We thought initially that the database would be the core product, but what has worked is a complete solution," says Hakfelt. "Companies don't want the hassle of dealing with multiple suppliers for something that represents just a tiny part of their media budget." Now, the UK outfit has some 250,000 members, while Mindmatics has access to 700,000-800,000 opted-in mobile numbers across Europe. Users sign up on the web, submitting a range of profiling details that enable Mindmatics to segment the database in a variety of ways. The sign-up method differentiates the database from many others, Hakfelt says, with those capturing users via SMS having a more difficult time profiling users. Using mobile content as an incentive to make users sign up works well, Hakfelt says. While in the UK, the perceived value of a ring tone is £1.50, Mindmatics' cost for supplying it is far lower. Furthermore, the points system Mindmatics deploys enables advertisers to easily offer a free ring tone or a certain number of free points to users who respond to a marketing message. Mindmatics is not planning to add rewards that are not mobile-related, though more advanced mobile content will likely be added to the lineup. The company has also recently launched a mobile couponing application, first deployed by UK nightclub Carwash. Hakfelt maintains that users "never complain" about Mindmatics campaigns. "Those that don't like mobile marketing wouldn't sign up," he points out. The company only sends users a couple of messages each month, and churn out rates on the database are only about 1%. Gelenbe points out that using such a database tends to result in customer-acquisition campaigns, something that he says is hard to do effectively directly on mobile. But it might depend on who is advertising. Mindmatics customers include those that are already closely allied to the handset, such as mobile content vendors. In other markets, the concept is turning toward more advanced technologies. In South Korea, local company Widerthan.com enables the EV-DO subs of cellco SK Telecom to receive movie trailers and TV-style advertising on their handsets, for which advertisers pay the packet fees. Widerthan.com has worked with SK Telecom to build a marketing database of some 300,000 users since launching its SMS reward-based advertising service early this year. The company manages three or four text messages per user per day, according to Widerthan.com president Jim Woo Soo. © Copyright Flytxt Ltd 2006. Unauthorized use of any content constitutes a material breach. |
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