Media: All about ... Mobile marketing

The industry has yet to make it into the mainstream, Alasdair Reid writes.

It's almost obligatory to interpret Martin Bowley's appointment as the chief operating officer of Pitch Entertainment Group, announced last week, as a sign of the times. Assessing what sort of sign this happens to be is more difficult.

The knee-jerk reaction from many sources was that this is a tale of a man down on his luck. Oh, how the mighty are fallen - not so long ago, Bowley was the top dog in an airtime market worth nearly £5 billion. Now he's involved in a business comprised mainly of hot air and loose change.

The contrarian view is more forward-thinking. In this version, the fact that one of TV's big players has embraced mobile is just the latest confirmation of the sector's rise. In fact, it won't be long before TV advertising is regarded as a quaint subset of the mobile phenomenon.

The truth is, as always, somewhere in between - and from Pitch Entertainment's point of view, the immediate pay-off is that Bowley's arrival raises the profile of the company (and its business sector) within the mainstream ad community.

1. Some observers divide the mobile marketing industry into eight sectors: mobile messaging, whether by SMS, WAP or MMS; banner advertising on mobile portals; off-portal searches, for instance on Google mobile; tailor-made ads that top and tail mobile television content; the provision of mobile content such as ringtones and games; customer relationship marketing initiatives such as alerts and tracking; "mobile local", whereby, for instance, a retailer will use Blue Box Instore technology to send messages to potential customers passing its stores; and, finally, the screensaver business.

2. Estimates of the worth of mobile marketing in the UK, and the sector's likely growth rate, vary hugely. Some agencies estimate a global market worth $5.97 billion by 2011 but can't give a source for this figure; others give the same number but with a pound sign instead of dollars. One London media agency source (who declined to be identified) says "5 per cent of all UK marketing spend can now be loosely defined as being mobile". This appears optimistic. The UK Mobile Marketing Association is unable to supply reliable figures - one of the main problems in gathering statistics is the levels of secrecy maintained by the main mobile telephony operators.

3. Texting remains the mainstay, accounting for more than 50 per cent of all spend. But the earliest manifestation of mobile marketing - "push SMS", where text messages are sent cold to an acquired database - has all but died out. It proved relatively expensive to implement in cost per thousand terms and was thus uneconomical unless it generated an enormous response rate. "Pull SMS", where users are asked to respond to a commercial message in another medium by texting, often with the inducement of a prize, is the current mainstay of the industry.

4. Pitch Entertainment offers an added take on this - it provides a platform or virtual network that consumers can sign up to. They can then access a mobile entertainment community, including mobile instant messaging, unlimited photo and video upload, as well as access to free mobile content such as ringtones, games etc. In exchange, users agree to receive ads targeted to their specific demographic profiles and interests.

5. The biggest mobile marketing growth sector is the implementation of pay-per-click ad sites on mobile websites - and the growing penetration of 3G-enabled handsets will only accelerate this growth. Although the handset manufacturers had mixed results in the fourth quarter of 2006, Christmas was a strong period for sales. There are now 13.6 million 3G handsets at large in the UK market, though not all are enabled.

6. This is not yet unequivocally good news for mobile TV. True, there have been some bright spots, such as research in July 2006 from GfK NOP showing that one million UK consumers claimed to have watched some World Cup highlights on a mobile phone. But huge problems remain. There's still disagreement about technical standards and programming formats - and while the networks continue their current pricing policies, it will remain prohibitively expensive to watch high-quality video on a mobile device. So, even the most enthusiastic fans of mobile TV advertising say it will remain an irrelevance from a marketing point of view for the foreseeable future.

WHAT IT MEANS FOR ...

MEDIA OWNERS

- Mobile is a topic that strikes fear into the hearts of senior executives at established media owners, not least in the television business - although, of course, in public, they tend to insist that they see more opportunities than threats. Seeing big hitters from the TV business joining the mobile sector is not likely to make them feel any more relaxed.

- But they will continue to be reassured by the fact that the mainstay of mobile marketing continues to be "pull SMS". If you were being somewhat cynical, you could characterise this sector as a useful but by no means critical add-on to the outdoor medium.

ADVERTISING AGENCIES

- Mainstream creative agencies will not exactly mourn the fact that the more advanced forms of mobile marketing are currently stuck at a very bad place on the Gartner Hype Cycle (http://en.wikipedia.org/wiki/Hype_cycle). Creatives relish the opportunity to make a big impact on as big a picture as possible - and mobile is ultimately a tiny thumbnail of a canvas.

- Media agencies, especially those that have integrated direct and digital disciplines, will view the trials and tribulations of mobile in far more ambiguous terms.

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