Three years on, and the mobile marketing industry is stronger than ever. Volumes of text messages have increased by 200% over the past two years to an average of 55 million per day. Increasing numbers of blue chip companies have been adopting this communication medium and the original pioneers of mobile, such as Emap and Chrysalis, now have retained mobile marketing partners and long-term strategies.

As it stands today, the industry is worth a modest £38 million. It's pace of growth isn't slowing and industry analyst houses, such as Forrester are predicting that over the next two years, 50% more companies will adopt mobile marketing and spending will double. Given this growth rate, it's hardly surprising that a plethora of burgeoning companies and ventures have formed in response to the text message phenomenon.

The types of business models in this space are as varied as they are many in number. At one extreme, we have the 'agency' model:

Agencies

·  Are niche creative and interactive agencies providing the ideas behind mobile marketing campaigns

·  Tend to one of two different 'types': the pure mobile marketing agency and the interactive or mobile arm of a traditional marketing or sales promotion agency

·  Outsource the technology

·  Manage the overall campaign including the technology provider

The USP of the 'agency' is that because they know how mobile works better than their traditional counterparts, they can provide expert advice and creative for campaigns.

It might be worth adding at this juncture, for those less familiar with the industry or not so technology savvy - the technology piece involves more than the mere sending of text or multi-media messages. There are two key components to the technology. One is direct connections to the network operators, allowing for message delivery and receipt. The other is a technology platform that builds the necessary layers of intelligence into the campaign, creating different campaign mechanics, e.g. point collection, m-couponing etc. and reporting on campaign progress.

The agency business model operates like a traditional agency - billing for the account management and creative and may take a share of any revenue generative campaigns. Whilst the agency model tends to work in the majority of cases, the key piece that's missing is the direct communication between technology and client services which allows for the smooth running of campaigns and the development of products in direct response to the clients needs.

We've looked at the agency model. Now let's turn to the model which tries to play across the whole mobile marketing value chain:

The full service mobile marketing specialists

·  Offer the delivery of messages, the technology and the consultancy and advisory services under one roof

·  Tend to be a niche player focussed solely on mobile marketing

·  Have the unique benefit of having created products and services directly tailored to the needs of      
            clients

Because the technology and client service teams sit next to each other, they can give continuous feedback, thus moulding and developing the technology and products to suit the market. Full service companies derive their revenues from the advice they provide, licensing of technology and messaging costs. Though these players are trying to bite off a larger piece of the pie than others, because the majority have built up their experience from a dedicated focus on mobile, they have acquired this broader range of skills and knowledge over time.

The final key type of model in this space is the telecom player, which is also described as:

"Gateway" companies

      ·  Offer direct connections to operators

      ·  Plus a thin layer of technology to allow for simplistic and typically high volume campaigns

      ·  Gateway companies derive their revenues from messaging costs

      ·  Because the model is simple and technology based - it lends itself more easily to scale

The USP of a gateway business is that it can offer direct operator connections across many countries and continents. However, they don't offer the expert advice from a client servicing team or the level of technology that supports more sophisticated campaign mechanics. Some gateway companies have attempted to complement their core business by forming partnerships with creative agencies.

Again the key component missing here is the communication between technical and client servicing teams.

Beyond the three business models I've outlined, within which the majority of players can be lumped, it gets more complicated. There are players that have for example, attempted to create further specialisation by focusing just on 'youth'; providing a service dedicated to one particular sector such as media, or specialising in offering research or selling mobile databases.

Taking a step back and looking at the general mobile marketing landscape, over the last three years we've witnessed changing business models, liquidations and consolidation, trends typical of any emerging industry. It's too soon to say which will be the winning model and separately who will be the successful players and how far they have to evolve before they become winners. But needless to say the more avenues players pursue in the mobile space and the competition within this developing environment, the better. Mobile will be the lynch pin of all communication in the future and brands will use the common thread of mobile to unite all of their communication strategies.

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