News Leadership 3.0

March 07, 2011

Workshop: Mobile mecca can be tapped by local media

By A. Adam Glenn
The mobile phone is the new mouse - and local media companies have a chance to grab a chunk of the cheese. That was the consensus of a mobile marketing workshop in New York March 2 that outlined the myriad ways users now engage with mobile campaigns, and drove home the vast near-term growth (much of it local) expected in mobile advertising.

The mobile marketing experts, gathered as part of a local online advertising conference organized by Williamsburg, VA, consulting firm Borrell Associates, made the case that the overall growth potential for mobile advertising is enormous, with tallies into the many billions of dollars.

Local mobile advertising, for instance, is expected to grow from $500 million in 2010 to a remarkable $12.5 billion in 2015, while national mobile advertising will go from $5.8 billion to $28.25 billion, per Peter Conti, an executive VP at Borrell. Similarly, mobile SMS (text) advertising is to skyrocket on the local level from $238 million to $6.85 billion, and on a national level from $1.7 billion to $10.2 billion. Mobile app advertising is also expected to explode - on a local level from $35 million in 2010 to $1.2 billion in 2015, and on a national level from $271 million to $6.9 billion.

In just one market, Louisville, KY, for instance, SMS mobile advertising by businesses was forecast to grow from $1.2 million in 2010 to $33.7 million by 2015, a 3,000 percent growth rate.

Part of the potential for mobile is that almost everyone with a device can send and receive text messages, meaning a U.S. market of 200 million, pointed out Konny Zsigo of Michigan-based mobile marketing firm Wireless Developer Agency. Of those, 20 million use text alerts, 16 million have received a mobile coupon and 8 million have redeemed one. In addition, there are 100 million U.S. mobile web users (in fact, he said some 20 million use only their phones to access the web). He also counted 50 million email and free app users, and 25 million mobile video users.

Local media companies have great potential to leverage this mobile boom
, providing the database and other tools for mobile campaigns, and tapping into the reality that much of mobile users’ focus is local. Sandy Martin of Borrell said fully a third of mobile searches on Google have local intent, while the number for Microsoft is as high as 53 percent. And while only 15 percent of small businesses have tried mobile marketing in last 12 months. Borrell’s Bill Caudill says a survey shows 44 percent are at least somewhat likely to try mobile marketing in 2011.

Among the biggest opportunities are the fast-growing businesses in SMS ad delivery and in online coupons. Conti said for local media websites, for instance, coupons can be a great way to enhance directory listings, and can be customized, for example by using birthdays from user site registration forms to issue celebratory meal coupon offers. Restaurant promotions in general are a strong mobile category, as are other high-margin retailers like car services, salons/spas, cosmetic services, events and tourist attractions, while contests can drive great results. And the potential isn’t just SMS and coupons - Martin noted that Cisco predicts video will be 65 percent of mobile traffic by 2015.

Not that the mobile market is without its challenges. Zsigo suggested that while many national firms want to advertise and providers have lots of inventory, buyers and sellers often have difficulty finding each other. In addition, device fragmentation is a real reality - carriers are constantly looking for ways to segment audiences by making a wide variety of mobile devices, which greatly complicates standardized ad delivery.

The silver lining of that device diversity, however, added Zsigo, is that it also allows you to target campaigns directly to those different devices, pinpointing specific demographics of their users more readily. In addition, a great deal of information can be captured when someone engages with a text message or a mobile site, including knowing their device make and model, carrier, referring sites and whether the person is a repeat visit.

Among the advice the panelists offered was that campaigns are best “in media” - Zsigo suggested that a much higher response rate can be expected if you ask users to do something directly on the device they’re using to access the campaign (a mobile message seeking a response on mobile, for instance), rather than to go to another medium to act (a display ad asking someone to dial a mobile code). Caudill suggested keeping discounts simple (two-for-ones or “dollars off” work best), creating urgency with new offers and expiration dates, offering all details upfront to avoid customer frustration, and freely testing out different offers. Martin also advised owning your own customer lists, collecting consumers no one else has in as granular a way as possible.

Presentations are available free for download from the workshop - and other parts of the three-day Borrell Associates conference.

The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

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