Mobile Moving Forward

To promote its annual surfing competition in Hawaii, Quiksilver sends a text message alert to recipients of an opt-in program whenever waves in the area are high enough for the games to begin. In-store signage informs customers of the text service. Quiksilver's mobile marketing agency, New York-based Access 360 Media, originally expected to draw a few hundred hardcore surfing enthusiasts when it launched the program in 2006. It now boasts a database of 4,500 subscribers."We were able to cross over into an aspirational category. A lot of people got excited about surfing," says Lon Otremba, CEO of Access 360. "That kind of enthusiasm is what marketers look for to build their brand and drive sales."Adds Matt Ramirez, online marketing manager at Huntington Beach, Calif.-based Quiksilver, "Mobile messaging is a great vehicle for us. It gives us direct access to [a new group of customers]."While Quiksilver is hardly alone, it is in line with the mostly foodservice and specialty brands that are leveraging this "path-to-purchase" marketing tool. Supermarkets and mass retailers are flirting with mobile coupons, and the brands within those channels are rolling out dedicated iPhone applications, like Kraft's iFood assistant, but the tactic is still new."Obviously, there is greater potential here for more considered purchases, such as electronics or even beauty products, than for a commodity item like dishwashing liquid," says John Hadl, managing partner of Santa Monica, Calif.-based BrandinHand. Those categories can use mobile to allow consumers to scan product reviews or visit mobile websites for relevant commentary."The Holy Grail will be when consumers can type in an entire shopping list and find every store in their area with the items in stock for the lowest prices," says Hadl, adding: "We're not there yet." Mobile databases are still somewhat limited and, frankly, most consumers aren't technologically advanced enough to solve overly specific problems on their phones, like finding out whether a certain variety of Tide is on-shelf at a particular store. However, given the more than 250 million cell phone subscribers in the U.S. today, mobile marketing does make sense. Spending on mobile is still dwarfed by other forms of interactive media, including e-mail and search, but is expected to grow steadily and reach a combined $1.27 billion in 2014, up from $391 million this year, per Forrester Research, Cambridge, Mass."Mobile marketing is increasingly being viewed across the purchase funnel as a way for retailers and brands to connect with shoppers," says Jason Katz, executive vice president of emerging media at Westport, Conn.-based Catapult Marketing, whose packaged goods clients include Sara Lee, Wrigley and Mars. He says that while the sheer number of mobile programs in the marketplace has increased dramatically in the last few years, it will be at least another year before their scale can significantly impact a company's bottom line.Program TypesInitially, mobile was hyped as an advertising medium, which led some marketers down a dead-end path of trying to foist banner ads on a cell phone-toting public that had neither the sufficient technology nor the attention span to accept those messages. Today, many mobile programs send concrete offers via an SMS text, a standard (and ubiquitous) form of communication for most phones or wireless carriers. A common tact among CPG brands involves text-to-win sweepstakes. Nestlé, for example, is currently dangling a coast-to-coast comedy trip for the grand-prize winner of its "Butterfinger & Improv" contest, in which consumers may enter by texting a promotional code printed inside wrappers to the short code "LAUGH."Video game enthusiasts can search for products and receive weekly deals by downloading Best Buy's new Gamer's Club iPhone application. New York-based Slifter is the creator of the software's mobile engine.In a partnership with Ping Mobile, Englewood Cliffs, N.J., Unilever ran a sweepstakes for Axe deodorant spray that placed six different short codes in various ad channels, such as cinema commercials and video-on-demand programming. A reply message drove entrants to stores to buy the product to receive another 50 entries. This method allowed the company to track which locations solicited the most responses and when, all while building its mobile database."A mobile program has to provide value to get consumers to invite you in. Then, it becomes database management: How do I keep them coming back and create a sense of loyalty?" says Access 360's Otremba. "If everything else you're doing is of low value, you haven't accomplished much. Mobile can't be seen as a [one-time] communication."Not everyone believes that mobile marketing must initiate a call to action in order to be successful. "If you're only looking at this as a way of generating a sale, then you're underselling the value of mobile marketing," says Mike Wehrs, president and CEO of the New York-based Mobile Marketing Association.Wehrs argues that brands are also using mobile marketing effectively as an engagement tool, citing Dove's recent "Go Fresh" campaign as an example. Even so, marketers look for measurable results and often use traditional metrics, such as the number of iPhone application downloads, to assess the impact of their campaigns. Likewise, retailers could use mobile to increase interactivity with their customers. Sherman Oaks, Calif.-based Channel M, for instance, is testing new programming on its in-store TV network. "The content might encourage shoppers to use their cell phones to enter a trivia contest or vote for their favorite music video," says Peter Lee, CEO of Channel M, whose operators include Steve Madden and Ashley Furniture stores. "It's a way of enticing people to stay in the store for a longer period of time."Mobile CouponsCurrently, one of the more popular forms of mobile marketing involves a new spin on an old behavior: clipping coupons. Both Kroger and, more recently, Safeway have introduced a nationwide mobile coupon program from San Jose, Calif.-based Cellfire. Grocery shoppers who opt-in to the program (by downloading Cellfire's mobile Web application) receive regular coupon offers on their phones that can be clicked on and sent to their loyalty cards for redemption at their local supermarkets."It's another way of reaching out and helping consumers save money," says Michelle Marian, vice president of interactive marketing at Safeway, Pleasanton, Calif. "We are promoting the program in-store, in weekly circulars and in digital media including e-mail, search, online [ads] and with prominent positioning on our websites."Cellfire's CEO Brent Dusing says his firm expects to sign another major grocer and a department store-style big box retailer this year. He's also been in regular discussions with drugstore chains. "As a marketer, you're limited with paper coupons and you get very little insight into your consumer," Dusing says. "With mobile coupons, retailers can improve the customer experience and generate a sales lift."Proponents of mobile coupons often cite their high redemption rates (averaging 15% to 20% among grocery stores) as proof that they work. However, the programs do carry significant upfront costs, including the purchase of short codes, and thus far have had limited reach. Marsh Supermarkets, for example, currently has a relatively modest pool of about 10,000 subscribers in its mobile coupon program from Smart-Reply, Irvine, Calif."It's a small population, but it's been growing steadily," says Chris Collier, director of marketing at Indianapolis-based Marsh. The chain expects to best competitors through technological advances in its system featured in a new website design later this year. "We're not unique now, but in six to eight months, we won't be compared to anyone else in the industry," predicts Collier. Dan Jones, vice president of grocery, CPG and recall services at SmartReply, adds that there's more to these programs than discounts. "Mobile is about giving consumers something truly unique and solving a problem," he says, envisioning a time when grocers will send out video recipe demos to their customers via mobile phones.In the meantime, the data gleaned from coupon redemptions could enhance existing supermarket loyalty card programs and allow stores to better target their customers' needs. Critics, however, question the industry's ability to do just that. "A lot of these loyalty databases are not particularly well-structured. It won't be easy for them to take action," says Steve Smith, a new media consultant and frequent contributor to the online Mobile Insider. "Sure, you get discounts from the stores, but do they ever contact you with a follow-up offer -- or even know who you are?"Collier admits there's still work to do. "We've had moments of brilliance, but in general, retailers haven't done it very well," he says. "We have to figure out what our customers want and turn their desires into our action."Breaking Down BarriersMobile-based discounts are not new. Various retailers including Borders, Supercuts and Hollywood Video have all experimented with the coupon format in the past. Yet previous programs have suffered from P-O-S issues, such as checkout lines getting bogged down when customers presented their mobile phones for proof of purchase and employees had to search for the correct codes to plug in. Now, firms including Chicago-based Samplesaint have introduced bar code technology that allows a cell phone screen to pass through an optical scanner, thereby instantly redeeming the coupon.At Best Buy, meanwhile, marketers are busy trying to break down barriers to the mobile phone purchase itself. In its recent survey of 1,000 U.S. consumers, the retailer found only one in five adults currently owns a smartphone; the rest cited various deterrents to purchase including expense, confusion over the assortment of models/features, and difficulty with the shopping experience.To overcome the confusion, Best Buy looks to continually streamline its Buyer's Guide and in-store display area, which is now organized by carrier. The chain has also rolled out more than 40 standalone small-format Best Buy Mobile stores devoted to selling cell phones and related products. The company says it has been successful in attracting new customers, particularly female shoppers, at these predominantly mall-based locations.Scott Moore, vice president of marketing at Best Buy, Minneapolis, says that employee training is key to enhancing these P-O-S efforts. "We have a dedicated mobile phone staff that is very good at helping customers navigate through all the choices," says Moore. "It's not just about product knowledge. It's listening to your consumers about how they are currently using their phone and how they want to use their phone."What consumers want to do on their mobile phones -- and what they can do -- may be two different things. Fremont, Calif.-based Nielsen Norman Group recently surveyed a group of mobile phone users and found that Web browsing for a variety of tasks (e.g., searching movie listings) was quite cumbersome and slow. The study found a much higher success rate for the navigation tasks on touch phones such as the iPhone (75%), compared to other smartphones (55%) and regular phones (38%). Still, industry players continue to pound the drum on the validity of mobile marketing. "Everybody has a unique use for mobile," insists Peter Schultz, vice president of business development at Ping Mobile. "If a company is smart about what they want to get out of it, they'll see a huge ROI."

Mobile Moving Forward

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