iPhone effect helps mobile marketing gain momentum

LONDON - Mobile marketing could be described as all talk and no action, but the iPhone is changing the game.

iPhone effect helps mobile marketing gain momentum

The slow uptake of mobile marketing has meant that many marketers are sceptical as to whether it is worth investing in a medium that may never take off. However, Todd Tran, managing director of Joule, WPP's mobile marketing agency, says that the iPhone has brought some much-needed excitement to the market. 'It is the first smartphone to truly move handsets from being a phone to a computer, because of the superior user experience it offers,' he says.

Mobile marketing's inability to live up to the promises of the technology companies has, to date, prevented it entering the mainstream, according to Jed Murphy, digital director at Carlson Marketing. 'The infamous BT ads for its "Genie" service, which purported to allow consumers to surf the mobile internet, are a case in point. The reality was a painfully slow connection, delivering limited text-based content, with terrible usability and high data costs.'

However, as mobile internet speeds have increased through the advent of 3G and, more recently, high-speed downlink packet access - essentially 'mobile broadband' - it has been possible to create richer internet experiences for consumers, in particular the ability to download and stream video.

While handsets such as the Nokia N95, launched in the UK in 2007, started to capture some of this potential, they still lacked true usability. It took the iPhone, with its unique, intuitive interface, combined with the desirability of the Apple brand, to really capture consumers' imagination about what they could do with their handsets.

Despite consumers' appetite for downloadable applications and the mobile internet, though, penetration of the iPhone is low - 5%-6% worldwide and 1%-2% in the UK - and likely to remain so. This is partly because of its premium price and positioning, and partly because - for the time being, at least - in the UK it is available only on the O2 network.

Tony Effick, chief strategy officer at Publicis Modem, points out that while the launch of the iPhone has made consumers aware of the ease of touch-sensitive, large-screen phones, boosting sales of all such handsets, it also highlights mobile's historic weakness of fragmented networks and unharmonised operability. Developing campaigns for individual phones or operating systems is therefore relatively expensive. Effick predicts, though, that the market will have harmonised, and interoperability become standard, within 18 months to three years, allowing marketers greater reach at lower cost.

Moreover, agencies do not expect the relatively high cost of smartphones to be problematic, because of the UK's convention of subsidising the price of handsets when consumers upgrade.

'That will lead to more rapid uptake of these new large-screen format handsets in the UK than in other countries,' predicts Mick Rigby the founding partner of Yodel Digital.

However, despite the enormous marketing potential of the mobile internet most brands are not exploiting it, says Geoff Gower, creative technologist at Archibald Ingall Stretton. He dismisses Carling's iPint application, which used the iPhone's ability to tell the way up it is being held, to simulate a pint of beer being drunk, as 'a novelty, a bit of fun and massively over-rated'.

According to Rob Salmon, marketing communications partner at Coors Brewers, the iPint was the most successful free application (app) in the UK in 2008. 'It created a huge online buzz, with a large number of conversations about the brand in places it wouldn't normally feature,' he says. 'It received widespread media coverage in digital and traditional channels. The iPhone and similar devices are great media through which to provide branded content to consumers, but the quality of the content is key.'

Gower believes that such 'short-term entertainment brand extensions, or novelty games' offer far less marketing potential than applications that are 'more useful, functional and usable, time and time again'. He questions why, for example, Virgin Trains has not taken advantage of the iPhone's geo-location facility to create an app for customers that lets them find the nearest station and next train time.

He admits the medium is nascent, but suggests that brands that experiment at this stage stand to gain once smartphones become ubiquitous. This, arguably, is what brands such as Coors and film studio Universal Pictures, which offers downloadable film trailers and movie-themed games, are doing.

'Mobile advertising is a pull rather than a push technology, but once users download applications they are very engaged: they tend to spend time on the site, and revisit it, and your logo sits there on their menu, like a bookmark,' says Calvin Lim, director of mobile sales and channel support at Universal Pictures.

Universal's activity enables iPhone users to respond to a movie poster when out and about, via a short code and keyword, and download information, such as show times. By the end of the year, 'movie-goers will also be able to find the nearest cinema and book tickets via their phone', says Lourens de Beer, managing director of Minick UK, which in December launched a mobile internet site designed for iPhone browsers for the US release of the Universal Pictures movie The Tale of Despereaux.

Some brands already offer such 'utility'. Outdoor clothing brand North Face, for instance, has launched a snow report for skiers as an app that uses the iPhone's GPS facility. This will endure in a way that more gimmick-led promos cannot, says Effick.

British Airways customers can download an iPhone application that gives them real-time arrival and departure information, allows them to store their favourite flights, and gives them access to the BA website and timetables. An updated version is about to be launched that will also incorporate an online check-in service.

'The big benefit of mobile marketing is that it allows us to target location, action and need,' says Chris Carmichael, product manager for mobile in the marketing team at BA. 'It is a medium that is "always on". Our customers use their phones for business - increasingly they travel without their laptop. They have been trying to access our website from their phones in the past, and now we have made that much easier for them.'

As Carmichael concedes, BA is at early adopter stage, and he is concentrating on getting its main site to work as well as possible on multiple handset devices. 'That will have the biggest customer impact,' he says. 'They don't want us to dictate what device they can use.'

When BA launched the application in November, it attracted 11,000 unique users. By December it had 28,000 unique users and January's figure was even higher.

Away from the iPhone, last year Citroen UK ran a mobile marketing campaign for its C5 in partnership with Yahoo! on the Vodafone Live platform. Within four weeks it had 40,000 unique users, 85,000 clicks through to a WAP site, 3000 downloads of an embedded video and 1500 dealer location requests.

'To get 1500 dealer locators from 3000 downloads is very high, and the 65% brand recall compares very well with the motor industry average of about 55%,' says Ian Hughes, marketing director of Citroen UK.

Many of the campaigns and apps so far created for the iPhone target a youthful, gadget-conscious demographic. But user patterns of new-generation smartphones will shift quickly, claim agencies, which predict that mobile internet penetration will be nearly 100% of mobile users within three years, helped by the fact that those phones that enable little more than calling and texting, will rapidly become obsolete.

'Brands need to use this two-to-three-year window to trial this area methodically and intelligently, rather than jumping in and doing random things,' says Joule's Tran. 'They can't ignore the revolution.'

iPhone by numbers

  • By the end of November 2008, UK iPhone uptake was about 1.2% of all mobile users. Smartphone users (including iPhone users) accounted for 13% of all mobile phone users. (comScore M:Metrics)
  • Nearly 60% of iPhone users browsed the web in the quarter to 30 November 2008, about 28% accessed maps, 49% read news and nearly 24% accessed weather. (comScore M:Metrics)
  • iPhone users were 139% more likely to use their phone to play a game via a browser or download than other handset owners during the sample period. (comScore M:Metrics)
  • iPhone users were 134% more likely to be 25- to 34-year-old men than other handset owners. (comScore M:Metrics)
  • More than half of iPhone users visited a social networking site at least once during the month surveyed. (comScore M:Metrics)
  • Smartphone sales almost doubled in the year to 30 November 2008, with 23% of handset sales in the year being smartphones, compared with 13% the previous year. (TNS Technology)
  • About 8% of UK consumers have a new-generation touchscreen smartphone, and 16% intend to buy one next time. (TNS Technology)