Helping Hands
Wednesday, 23 June 2004

New Media Age - As traditional agencies’ skills expand, the role for mobile specialists will change. But there’s still a lot for them to do, finds Clare Goff

When Grey Interactive launched a dedicated wireless division in 2000, it was more for show than out of necessity. “It was trying to show that the agency was cutting edge rather than to make any money”, says Alan McCulloch, head of Joshua Interactive, as it’s now called. Ten months later the division was folded and the agency turned its attention to interactive TV.
Three years on – in telephony terms the replacement lifecycle of two mobile phones – mobile marketing is slowly but surely becoming serious business. There are now 35m mobile users in the UK, around 69m text messages sent every day, and 13% of users across Europe have traded their black screens for colour MMS handsets.
Mobile messaging across Western Europe will be worth an estimated €176.8m (£117.5m) this year, according to Jupiter Research, of which almost all is spent on SMS. For those clients ahead of the curve, mobile is becoming an important part of the marketing mix, growing out of the youth brands that first got onboard the text phenomenon.
For Richard Hurring, head of sales and commercial partnerships at Vodafone Target, text messaging is still in the early stages of development and has a long way to run. “We need to move on from text-to-win to more compelling uses of SMS,” he says. “But it’s far from reaching it’s full potential.”
By 2008, however, the mobile marketing sector will have more than doubled to almost €400m (£265.7m) says Jupiter, and more than half of that will come from multimedia services (MMS), allowing more sophisticated mobile marketing strategies to come into play.


Adapting to Mobile
As mobile starts to gain larger chunks of marketing spend, marketers are taking the medium more seriously. The next few years are set to be significant for agencies in the mobile space. So who are they and where will they fit into the mobile marketing value chain?
For many traditional agencies, mobile is still very much and R&D area. “It’s a hard thing to make money from,” admits McCulloch. “It’s still low down in the thinking of many clients unless they’re huge youth brands like MTV.”
Without the technology needed to implement campaigns, traditional agencies struggle to play more than an advisory role for clients attempting to use mobile phones as a marketing channel. “It all comes down to the technology,” says Jason Carter, Universal McCann head of interactive. “We’d have to buy into it.”
As brands try to rush into the space without giving thought to the intrusive nature of the medium, agencies are taking on the role of guiding them through the options. Many now have a dedicated mobile specialist, but that person is also likely to be spread across other emerging technologies, such as interactive TV, or is part of the direct marketing department. Agencies still need to link up with mobile specialists in order to implement campaigns.
Enpocket established itself as a specialist in mobile marketing area and is well placed to fill the holes traditional agencies’ knowledge and technology bases. It bills itself as a full service mobile marketing solutions provider, helping clients through each stage of mobile communications from research to campaign delivery. Its three components are Enpocket Engine, a campaign management programme; Insight, which researches and analyses data campaigns; and Solutions, which helps marketers run campaigns in this space.
The company has noticed a shift in the use of mobile in the last year from building and leveraging databases for mobile data to increased WAP usage and the use of mobile as a significant part of the marketing mix.
One of it’s main rivals is Flytxt, which has been established in the mobile marketing space since 2000, when it was very much a case of “putting a toe in the water” according to chairman Lars Becker. In those days WAP was being billed as the mobile marketing platform, before users discovered text was much cheaper and less unwieldy. At that stage mobile marketing was very much a niche-player market, but now the sector falls into three distinct areas, says Becker.
First there are the gateway providers, which connect to applications to the mobile operators. Then there are the application producers themselves, which craft and personalise the messages. Third are the specialised agency players, which provide customer service and creativity”.
Flytxt has fingers in all three parts of the mobile marketing triangle, but it’s latest product, Flytxt Direct, gives an indication of the path it’s likely to follow as the market matures. This allows third parties to set up a campaign and manage it for a client.
“It’s like a mobile marketer in a box”, says Becker. “We think our role going forward will be to provide the tools for campaigns.”


Shifting Specialisms
As mobile technology branches out into Java, Flash and video, those agencies that can provide technological solutions and creative insight for using them will be much sought after. But in the same way that companies like DoubleClick launched into the emerging internet space by providing campaign solutions, then shifted to being a licensee of technology as expertise grew in the traditional agency structure, so the same kind of shift is emerging in the mobile industry as it moves into the mainstream. Enpocket’s senior VP, Peter Larsen says that in the main the company now works directly with clients. But going forward he sees traditional agencies taking on a lot more of the mobile expertise role. “The specific mobile marketing solution providers will work in close partnership with the agencies, which will slowly but surely move to mobile solutions in-house,” he says. A more traditional agency setup will then form, with the mobile operators linked to a brand and third-party providers through their lead agency, and clients will be able to license the technology themselves to run campaigns in-house, as many already do in the mobile CRM field. As the mobile market develops, however, the marketing landscape will shift dramatically. “In the next five years, mobile will move from being just a communications tool to establish itself as the device through which you consume media,” says Becker.
Both Flytxt and Enpocket have an international canvas and have watched mobile become a significant marketing platform in Japan, where it’s estimated to overtake radio in 2007. There the market has already moved from one where content is on a pay-per-use basis, with limited scope for marketing, to become ad-supported medium where content is free.
“Mobile advertising will emerge as a category,” says Becker. “It’s a very powerful medium where there are no boundaries to creativity.”
Larsen adds that while there’s no guarantee that the British market will develop along the same lines as that of Japan, the experience there is showing that 90% of mobile data traffic comes from outside the mobile operators themselves, creating huge opportunities for content providers and marketers.
While some of the UK operators have tried to stake a claim on a piece of the mobile marketing scene, they’re largely expected to be passive participants in the future. O2 was the most aggressive in this respect; it’s division O2 Broker targeted brands and media companies directly to run their marketing services. It changed strategy earlier this year and now focuses on it’s relationships with third parties in the area, through O2 Strategic Partners. A spokeswoman for O2 said, “It was more effective for us to outsource that function to third-party providers. We recognise we have our own set of skills.”
While Vodafone advises on creative and for clients through Vodafone Target, it plays and evangelistic rather than implementational role for the mobile medium. Hurring says, “We use Target as a vehicle to engage with brand and media owners and get them to do more stuff with mobile. We want to stir up the market.
He says that traditional agencies have been slow to pick up on mobile, while media owners, particularly in the TV area, have snapped up the opportunity. “Once the pot was boiling, we stepped back,” he says. And he believes the same will happen with mobile marketing once clients pick up the bait. “In the long term, we expect there will be more experts in that field to run client campaigns.”


Brand Complexity
Andrew Jones, managing partner at mobile agency Aerodeon, which advertises on and executes mobile campaigns, says that while many of the larger media owners can now run their own text messaging campaigns through in-house consoles, the same hasn’t happened with brands, which need a more complex solution.
“It hasn’t reached the point where it’s a commodity,” says Jones. “The skills of a mobile marketing agency are still needed.” And the complexity of mobile marketing will increase as the market matures, he believes.
While mobile agencies on the whole have led from the technology side of mobile marketing, Hurring believes that’s largely irrelevant and he tries to lead from a creative perspective. “We don’t get involved in whether it’s 3G or SMS, but what the customer experience looks like,” he says.
Mobile agency Marvellous had the same idea when it launched two years ago as a purely creative player. It’s co-founder and creative director Jon Carney places creative at the top of the mobile marketing food chain, above the technology and aggregators that currently lead a lot of thinking in this market. “The client relationships will reside with pure-play creatives going forward,” he says.
The agency is now finding itself going head to head with big players n the direct marketing space on pitch lists, and is finding big brand names keen to make a leap into mobile.
But for many in the industry mobile marketing needs more of a rigorous sell if advertisers are going to climb on board in great numbers and build mobile into a significant part of their marketing strategy. Joshua Interactive’s McCulloch is hopeful that the industry will begin to sell itself more to make it easier for the agencies to sell the medium to clients.
“It’s still quite embryonic,” he says. “Coca-Cola does an SMS campaign every year but there isn’t enough of that to sustain an industry.”

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