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This
article was commissioned by the Marketing Society Journal "Market Leader" for inclusion in March 2004
Mobile Marketing. How to succeed in a connected Age
Expanding Time, Expanding Experience, Expanding Me
An overview of mobility and its potential for businesses and brands.
By
Alan Moore and Tomi T Ahonen
During
the TV show American Idol, more than 7.5 million American-Idol texts were sent
during the contest. The final was the largest single text-messaging event
handled by a mobile phone operator in the world, and a third of the senders had
never texted before. American Idol had provided a reason for non-texters to
adopt. This US phenomenon is even more exceptional when one considers that the
culture of use and penetration of the mobile phone is not
comparable to Europe, particularly the UK and the Nordics.
And
it is not 'Reality TV' that is the big idea as so many think it is, it is in
fact 'the interactivity of participation', or 'engagement', that is the central
driver to the success of these shows significantly enabled in part by the
mobile phone.
The
mobile phone and the entire concept of mobility has
impacted on our culture and goes deep into the human pysche. This is the
precise opposite to a world without the mobile phone. Now, you find out what’s
going on through your mobile phone, and go to the place where it’s happening.
How many of us feel bereft when we have lost, mislaid or forgotten our mobile
phone? The mobile phone enables us to swarm, to graze and move towards our most
potentially meaningful experiences at will. As a consequence the mobile phone
is a powerful mediator in the rise of the 'experience economy'.
A 21
year old PR consultant explains, "If I lost my mobile phone I'd go into a
panic". She happily confesses her mobile phone is her lifeline, and 21
year old Helen Searle, a PR consultant, says it would be a disaster, if they
were separated. "I use it for everything", she said. "If I lost
it I would go into panic mode. I would lose all my reminders, my calendars, all
my pictures and contacts. That would mean I wouldn't know how to stay in touch
with anyone and wouldn't know what I was supposed to be doing — especially in
my social life. It's essential."
As
the Internet and mobile communications merge, as mobile phones increasingly
become something that a teenager gets with her driver’s license, and as they
shrink from a tool you carry to a fashion item that you wear, Howard Rheingold,
the pioneer of virtual communities sees a profound shift in society. "They
amplify human talents for cooperation," he says.
The
mobile device is often the single most important communication tool in a
person’s life. It is often within arms reach 24/7. In fact statistics show that
it takes 68 minutes to realise you have lost your mobile phone, whereas it
takes 26 hours to realise you have lost your wallet. And the Internet and
society is teaching us to be more and more demanding as customers and more and
more efficient as executives. So it will be MY content, MY services, what I
want, what MY interest are, what supports MY work needs, what makes MY life
easier. Extending Me is personal; is relevant; is
customised; is about community; is about permission; is language; and is
multi-session. We don't want your services, we want our services. We want what
we want not what you want or what you want us to want.
Understanding
The 'Me' aspect of mobility is crucial to how
companies and operators can develop their businesses in the 21st Century.
Expanding Me, expanding time, and expanding experience
are all fundamental to the mobile phone. Marketing today truly needs to
understand the social sciences.
NTT
DoCoMo the highly successful Japanese mobile operator believe that services
have to be MAGIC (Mobile, Anytime, Globally, Integrated, Customised) to be successful.
According to the Financial Times, NTT DoCoMo has moved nearly 40 million of its
46 million mobile service subscribers in Japan to the popular I-mode data
services platform. The FT reports DoCoMo’s monthly revenue from I-mode is
normally 20 percent higher than from its voice-only services. Considering
I-mode was launched in February 1999, its growth represents one of the most
successful mobile data services in modern times. DoCoMo have created an
environment where they control the access to content and new I-mode sites and
have a growing number of content providers who want to join the official NTT
DoCoMo portal. The increasing number of subscribers is attracting more content
providers and the increasing amount of content makes the service ever more
appealing to subscribers. Creating a virtuous circle that co-creates value for
both the customer, and the bottom line value for the business.
Importantly,
NTT DoCoMo understand that a successful mobile data
business is built upon creating attractive content and having a flexible
approach to: partnerships, revenue sharing agreements and the pricing of
services.
One
wonders why then, currently some mobile operators are trying to migrate TV onto the mobile phone or marketing 3G in the most
rudimentary fashion possible. Rather than finding compelling reasons for
customers to adopt. The future lies in understanding ME, and
micro-segmentation. Of equal importance is to understand that though we are all
individuals we also have communities that we associate with. We need to be part
of society. We need to feel loved, respected, listened to and to have a sense
of belonging. It could be our family, friends, business associates, tennis
partners, a fan club, horse riding society, pressure groups, political organisations,
etc. It is also important to understand that the Me
attribute is an extension of myself and my communities. So services that help
us keep in contact, that help us build and share are all addressing the
community aspect of Me are valuable.
Businesses
have to understand that they need to move towards the micro-segment of one,
connected to communities of interest if they want to take full advantage of the
mobile phone. Its not about the marketing gimmickry of
free minutes, or celebrity endorsement, that you can send an MMS picture of
yourself naked to another phone. We have moved into a world of
interconnectivity. We now lived in the Connected Age.
The inexorable rise of the mobile phone can be put into context by the
following statistics.
Today
there are over 1.4 billion mobile phones worldwide, which is
more mobile phones than there are automobiles, computers, or even television
sets. Already over 500 million mobile phones had built-in browsers. During 2003
the global mobile phone penetration exceeded that of fixed telephone lines.
For
the past five years many have claimed that the mobile telecoms industry is at
saturation. Yet subscription statistics keep astounding those experts. In the
Western world mobile subscription penetration is now expected to reach 120%.
While toddlers are unlikely to ever carry mobile phones, the 120% number must
then include users with multiple subscriptions. This is in fact the trend in
leading countries around the world where young working people increasingly have
two mobile phones, for example one from work and another for private use. The
mobile penetration numbers are quite startling with countries at about 95%
subscription penetration are:
-
Austria
-
Finland
-
Hong Kong (over 105%)
-
Iceland
-
Israel (over 105%)
- Italy
-
Portugal
-
Sweden
-
Taiwan (over 110%)
Mobile
and fixed line telephony (voice & text) is worth $1 Trillion. Hollywood,
the music and gaming industries are each worth approx $30 billion, while the
SMS text messaging traffic is worth almost $50 billion. Ringtones alone are a
$2 billion business, whilst music companies make more money from the royalties
of a single track when it is released as a ringtone than they do when it is one
track on an album CD. The rap artist 50 Cent recently set a record when his hit
In Da Club sold 500 000 copies as a Ringtone.
Spending substitution:
Teenagers
today in Finland spend up to 90% of their allowance on their mobile bill. Over
50% of this is on SMS. This group of society are spending less on clothes, the
cinema and eating out. They are using text for chatting, sending jokes, sharing
simple pictures, providing information on what where who and how to their
friends and even dating over SMS.
An O2
study run by MDA (Mobile Data Association) on 16-24 year olds in UK (August 03)
found that youth spend 400 GBP per year on mobile phone and services, more than
on any other typical teen entertainment ie. Their music and stereos, TVs, video
games and PCs, movies etc. 95% use SMS and clear preference to use SMS rather
than voice so that secret communication without parents or siblings getting to
listen in. I asked my 21 year old son over dinner what he spent on his mobile
phone bill per year citing the £400 figure. He laughed, agreeing that he spent
more money on his mobile than anything else. But thought the
£400 figure woefully low. He declined to tell me how much it actually
was.
But
clearly these statistics demonstrate that if you want to reach people, today
you need to think as much about that mobile/ Internet connectivity as you do
about the 30 second TV spot, and reconsider a move from interruptive to
engaging communication solutions that support go to market business strategies.
Especially when there is growing evidence that Television has lost young males
to computer games.
A
Mobile Youth study of UK 15 year olds, released April 2003, says part of the
money to feed the habit of the mobile phone comes from less smoking. A Siemens
study in 2002 in Asia found that youth prefer using SMS rather than e-mail.
Young people use SMS to start dating and in relationships get upset if the
partner does not send at least one SMS per day, according to an Orange study in
the UK and France in 2001.
Disruption and Destruction
But
the impact of mobile telephony goes beyond the youth market. Mobility is
disrupting many industries. Lets use the camera as one
example. In 2002 more mobile phones with built-in cameras were sold than
digital cameras. During this year it is expected that more mobile phones with
built-in cameras are sold than digital and film based cameras combined. And
this week the Financial Times announced that Kodak was giving up traditional
film to move to a solely digital business. Reflecting on these figures, one can
see how the mobile phone has significantly contributed to the cannibalisation
of Kodaks’ business model.
The
disruption continues in other industries. Parking payments have shifted rapidly
to the mobile phone. In Estonia already a third of all parking is paid by
mobile phone; in Croatia already half. In airlines mobile phones are changing
the rules. Finnair started it by offering check-in via mobile phone in late
2001, and by now Ryanair, Air Asia in Malaysia, JAL in Japan, Lufthansa and Virgin
Blue in Australia have introduced the service. And in London the Congestion
Charge can be paid via your mobile phone. In just seven months from launch, 20%
of all Congestion Charges were paid by mobile phone.
The
camera phone and MMS (Multimedia Messaging Service) capabilities have
introduced numerous new types of services. The traditional post office is
affected as now in several countries from Finland to Germany and the
Netherlands it is possible to take pictures on the camera phone, and send them
as traditional printed postcards then delivered by the mail box. Older
generations very much appreciate receiving these instant images via post. In
Norway MMS messages are now being invited by TV programmes to be sent in as
content. MMS messages are sent out by TV programmes to viewers who want more
information such as the morning show on GMTV which will send cooking recipes as
MMS messages to its viewers upon request. Yet another variation is the virtual
haircut pioneered by Toni & Guy hairdressers who let customers experiment
with hair styles as images and then send the trial images via MMS pictures to
mates to consider if the haircut is OK.
To be
explicit on where mobility can be truly valuable to us in an everyday kind of
way, we return once again to Finland and Helsinki. Finland has seen its lottery
join in the mobile revolution and today about 10% of lottery payments are made
by mobile phone. Better still, Helsinki Public Transportation started offering
m-tickets for underground and trams since December 2001. Now of all single
ticket sales for the underground and trams in Helsinki, already 20% are bought
via mobile ticketing. Think what mobile ticketing would do for all of us that
suffer the daily grinding ritual of travelling on public transport in the UK.
We could even pay for our lottery tickets as we wait for or on our delayed
train.
It
does not raise any eyebrows in Finland to see a child of 8 with a new phone.
Finns take it for granted that the library allows book renewals by SMS, that the fishing license can be bought on the mobile
phone. Parents track the location of their children by location-based tracking
solutions and hunters equip their hunting dogs with location-based collars.
Most 65 year old grandmothers send SMS text messages to their grandchildren and
dentists reschedule cancelled appointments via SMS.
A
unique set of cultural circumstances enable experts based in Finland to see the
reality behind changes in consumer behaviour rather than the anomalies created
by exceptional marketing. With true competition - four cellular network
operators and dozens of active MVNOs (Mobile Virtual Network Operators)
including the biggest department store, the second largest hamburger chain, and
the third biggest Internet Provider in Finland each also selling their own
branded mobile phone subscriptions – Finland’s competitive market is forcing
operators to innovate and care about their customers.
So
what are the implications of mobility for business? First they must understand
that we live as mentioned before in an interconnected world. The majority are
now educated to seek out information that expands ME. Every type of business
and brand has the opportunity to use mobility to enhance and extend its
relationship with its customers and create value for its own bottom line.
Success will increasingly depend on two factors - understanding the emerging
customer needs and effectively marketing to sharply defined target segments.
Each
and every business, if it embraces these two conditions will financially realise
the opportunities presented by mobility. Here is a list of a diverse group of
businesses that have harnessed this opportunity and become their own MVNO
(Mobile Virtual Network Operator)
Businesses
also have to understand that the services they offer must create value for
their customers. In doing so they will create value for their
own bottom line. Here are two examples.
Super Stable:
Launched
in mid January, Super Stable is Hong Kong’s first mobile horse racing game
jointly developed by New World Mobility and Imoeba. In the country where horse
racing and horse ownership have exceptional prestige though few can afford real
horses, the virtual horse has enabled many to indulge themselves and get much
of the satisfaction of ownership. Players enjoy the excitement of bringing up
their horses to become the 'King of Horse'. Using SMS or WAP service, customers
can play the nurturing game and participate in horse races anytime, anywhere.
Market
Performance
Super
Stable was launched in Hong Kong in January 2002. The game received
overwhelming response with over one million of short messages exchanged during
the first three months from its launch.
An
enhanced version incorporating the mating function was introduced in May 2002.
Due to the exceptional take-up of the service
Super
Stable has become the world’s first cross-border mobile network game, allowing
both Taiwan and Hong Kong players to participate in a same race through their
handsets. Significantly Super Stable generated higher average revenues than the
heaviest business users. Super Stable increased data revenue up to 50%.
Competitors would normally claim 12 to 15% of revenues generated by non-voice
data. Joseph H. O’konek, President of Far EasTone said: It allows our customers
to interact with other users in Hong Kong via IVR, SMS, WAP, and GPRS
platforms, bringing us one towards our vision: Anywhere, anytime,
communications that enrich the lives of people.
In
addition to games on horse racing, similar concepts of breeding, nurturing,
training, and competition are behind such popular network games as Dino Island
where you grow, develop and even do battle with dinosaurs on the Orange network
in the UK. A similar theme is in the Austrian Killer Bees game on the A1
network where gamers manage worker bees and killer bees to construct beehives
and then attack each other. With a national leader board and the benefits of
networked gaming, such community games are becoming very popular and
profitable.
Twins Mobile Music Service
New
World Mobilty approached Japanese mobile Internet Company, Cybird,
to set up an innovative branded mobile phone service based on the ultra popular
Hong Kong music duo Twins. The service turned the ordinary mobile phone into a
portal with the power to bring Twins closer to their fans. With the mobile
phone subscription the fans had access to:
Latest
news from Twins, concert info and direct advertising of upcoming live
performances
Twins
Ringtones, logo, screensaver, e-card, website with a fan chat
area
Members
can use loyalty points to enjoy more premium services
Twins
was launched via a PR campaign drawing in fans for a consumer event. This was
followed by advertising campaign from New World Mobile,
'Twins Mobile' logo was applied to Twins albums and concerts. There was an
email collection campaign for limited edition goods through SMS fan mail and
finally acquisition through a chance to win concert tickets
New
World Mobility, began the sales of Twins Mobile, in
August of 2002. The phenomenal success of the branded Twins SIM card has
provided evidence of the possibilities of mobile multi-platform branding. Creating communities, extending the brand and driving sales.
Now
the lessons are being applied in America where rap artist Nelly has announced
plans for his mobile phone subscription that includes not only Ringtones, but;
logos, screen savers and games, but also several cuts of his music pre-stored
onto the mobile phone.
Summary
The mobile
phone is a new powerful medium. It can generate interactivity that is
dramatically exponential in comparison to either; TV,
the fixed Internet or even PC’s. Both SuperStable and Twins Mobile Music
service demonstrate this. All businesses must understand that mobility plays a
key role both today and in the future to drive their future cashflows and
revenues. Mobile services can provide the means to generate a detailed mapping
of its marketplace and reach out to its customers. Mobility is closely connected
to marketing. It will be marketing through engagement driven by; creativity; an
understanding of ‘ME’, interactivity; and enabling services that will generate
success.
Businesses
and Marketers need to understand in greater detail how mobile services can help
them create ‘Marketspace’ in a crowded marketplace. A
marketplace that one could describe today as representing total competition.
The fundamental requirement to succeed is in ‘value innovation’, the mobile
phone and the entire notion of mobility is central to business success in the
21st Century.
Co-authored by Alan Moore, SMLXL managing director and
Tomi T Ahonen.
To
find more about SMLXL and their abilities in Disruptive Marketing and
Engagement Marketing, follow this link to Small Medium Large Xtralarge
SMLXL [Link
to SMLXLarge.Com]