| Mobile Marketing goes mainstream |
| Sunday, 25 January 2004 | |
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FT.com- 26th January 2004 - The heartland of mobile commerce has traditionally been the teenage market - and in particular the highly lucrative sale of ringtones and logos. With this in mind, farmers in Germany might not seem to be the ideal audience for a marketing initiative based around mobile phones. But the success of a recent project set up by Bayer Crop Science, a subsidiary of the pharmaceutical giant Bayer, illustrates just how broad the potential audience for mobile marketing and advertising has become. In order to raise awareness of its agro-chemical products, the company set up a text messaging service across Germany that alerted farmers to changes in local weather conditions. Farmers who signed up to the service, which was developed by mobile marketing and technology company Flytxt, received regular messages with updates for their local area, along with product recommendations from Bayer. "Feedback from the farmers has been very positive," says Lars Becker, chief executive of Flytxt, "but the most enthusiastic response has so far come from the Bayer sales representatives, whose details are sent out with each text message."Not only do wireless communications offer a direct and highly personal way of getting a message across to customers, they also enable advertisers and marketing companies to build strong relationships with them. Over time, a brand or retailer can build up a clear picture of a particular consumer's preferences, enabling it to send highly relevant targeted messages and increasing the likelihood of a response. "If you want to get in touch and have a relationship with your customer, then the mobile phone is a pretty ideal medium as it's something we carry around with us all the time," says Eden Zoller, a research director at Ovum, the technology research group. Mobiqa is one of a number of specialist companies that have recently begun to explore the potential of mobile marketing and customer relationship management (CRM). It has developed a service that enables event organisers and promoters to distribute electronic tickets to mobile phones. When a customer purchases a ticket, he or she receives a unique code, sent as either a barcode or a sequence of numbers. This can then be redeemed using a standard barcode scanner upon entry to the venue and checked against an online database. Last year, Mobiqa piloted the mobile ticketing service at the Edinburgh Festival and in November 2003, it distributed barcode tickets for the Orange-sponsored Bright Day pop festival in Liverpool. "The advantage from the organiser's point of view is that you don't have the logistics of actually printing and distributing tickets," explains Richard Philips, commercial director of Mobiqa. "And from the customer's point of view, there is no possibility of losing your tickets. With paper tickets, you can't replace them if you mislay them. But if your mobile phone is stolen with the barcode on it, you can let the organisers know and they can cancel and reissue the tickets. Even if you delete the SMS message, you can tell the operator and they just issue the same one again to your mobile." An important advantage of mobile ticketing, says Mr Philips, is that it eliminates touting and fraud, as there is no physical ticket to be sold or passed on. He also points out that, throughout an event, organisers can instantly find out how many people are in attendance - a huge improvement from a health and safety perspective on the traditional method of counting ticket stubs behind the scenes. In the longer term, Mr Philips envisages concert promoters or ticket agencies using data mining to send increasingly targeted messages to customers. "If you send someone a paper ticket," he says, "you don't really have a way of tracking their preferences. But with barcode tickets, you will begin to get a pattern of what people like and, once you've got that pattern established, you can get into much more personalised marketing." Supermarkets and other retailers have long tried to foster these kinds of relationships with customers with the use of loyalty cards but, according to Marc Lewis, chief executive of mobile marketing company iCoupon, they have failed to keep up with our shopping habits. "We've changed as consumers. We now shop daily and we've become convenience shoppers. Most of the existing loyalty card schemes only send out a mail-out three or four times a year, so there's a disparity between how often brands want to speak to the consumer and how often they are able to." In response to this, iCoupon has developed a mobile barcode service, called m-bar-go, which offers consumers discounts on goods at retailers and money off their phone bill each time they redeem a coupon. Members who sign up for the service, which launches in more than 3,000 UK stores this June, receive a unique barcode containing their membership details and, thereafter, a weekly text message with offers on branded products in supermarkets, music stores, bookshops and other retailers. To redeem the coupons, members hand their mobile phone over at the till, where the barcode is scanned using a standard EPOS scanner. Mr Lewis points out that misredemption, a common problem with paper coupons, will be eliminated because the coupons can only be redeemed if the items on offer have already been rung through the till. In addition, the brand that has offered the discount only pays when the coupon is redeemed. "Cost per acquisition is a compelling model because the advertiser doesn't bear any risk," explains Mr Lewis. Members will be recruited via direct marketing, in-store promotions and advertisements in retail magazines. Initially, the offers sent out will be fairly generic, but as the company starts to build up information on the kind of coupons customers are redeeming, it will be able to target them with more relevant messages. "This is not a short-term promotion tool," says Mr Lewis. "It is something that allows our brand partners and retailers to collate data and intelligence about their customers over the long term, and monitor the impact it has on their sales." As mobile marketing takes off, is there not a concern that consumers will be deluged with unwanted messages, in the same way as spam has flooded e-mail inboxes? "That's potentially the big showstopper for all mobile marketing," admits Ms Zoller, "but the situation is nowhere near as problematic as it is with e-mail. To date, the way the mobile industry has tried to control spam has been through self-regulation. The Mobile Marketing Association has a code of practice that they put together, and some operators are also setting up their own initiatives to monitor the issue." Mr Becker points out that the problem is unlikely to match the scale of e-mail spam because it costs money to send a text message, whereas sending bulk e-mail carries little or no cost. This means that mobile marketing is unlikely to become the medium of choice for unscrupulous purveyors of dubious services and practices. The 2003 EU directive on privacy and electronic communications is also helping to clarify the situation. It requires any distributor of mobile marketing to obtain prior consent from consumers before sending out text messages. But although this "opt-in" system may help to stem the tide of unsolicited messages, it does not address the issue of how frequently customers should be contacted. "There is no simple regulatory or best-practice answer to the question of frequency," says Mr Becker. "It really depends on how often you can be relevant to people." © Copyright Flytxt Ltd 2006. Unauthorized use of any content constitutes a material breach. |
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