If Mobile is Contextual, then Smartwatches are Hyper-Contextual

apple-watch-review-heroI’ve previously blogged about the challenges for the Apple Watch. Right now though, nobody can agree on the success of the device. Data from Slice Intelligence, reported by MacRumours  suggested that sales fell by 90% in the second week of July. However, Recode countered that the data only accounted for US online sales and didn’t factor in the launch in physical stores during the same period. Regardless of the ‘sales’ stats, Business Insider has predicted a 35% annual compound growth of the smartwatch market. The Apple Watch is therefore an interesting device in which to understand the direction and benefits of wearable computing.

Having used my device for nearly two months (yes, I have an Apple Watch), it’s been a good way to understand what works and what doesn’t. For example, I find the notifications are more useful than I expected. Whilst getting my phone out my bag or pocket is not a major hassle, there are benefits with notifications on the Watch. For a start, it’s discreet. I have been in a few meetings where my Watch quietly buzzed and I could quickly glance down to see what it wanted. That’s less of a disruption than pulling my phone out my bag. One commentator claimed that all the notifications do is to tell you to pick up your phone. I haven’t found that. Some of the notifications are reminders of another next meeting. I also use it to check the weather, transport and currency rates. None of these require me to look at my smartphone.

One of the unexpected benefits has been for travel. I can set an arrival time for a journey in Citymapper and it will alert me when I need to leave, based on the current speed of the transport network. The turn by turn navigation is also useful. I was in a less savoury part of the city the other week and it was more discreet to use my Watch than get out my phone to check the route (if only Apple Maps were a bit more reliable). The navigation is also useful when it’s raining or I have my hands full.

What’s interesting about all these benefits is that they are all very specific, or contextual. There is a parallel with the contextual nature of smartphones. I have been banging on for years about the need of brands to understand context in mobile to deliver the right engagement. For example, context is not simply knowing the user’s location. Understanding that I’m in-store is useful, but it doesn’t tell me if I’m browsing, ready to buy or just can’t find the product I’m looking for. Context also includes the time of day, my intent and even functions such as the battery life (when people’s batteries are low, the save their usage for basic tasks like messaging their loved ones).

I’ve asked a number of people how they are finding their Watch. Although each person uses it differently, everyone said it was useful, but not essential. Maybe that will change if Apple Pay gains traction. However, the non-essential nature is the key point here. Whilst smartphones are now an essential core device, smartwatches are not. They are useful for very specific tasks. If brands want to develop their engagement on these devices then they will need to understand the very specific contexts in which they are useful. It’s hyper-contextual. Of course the challenge for brands is how to understand or identify that hyper-context.

People are more likely to recall an ad with a QR code. Really?

Many people are publishing stats and figures about mobile. Sometimes they ring true: the growth of smartphones, the increase in mobile search or the fact that most consumers want discounts from brands, are things that all make sense. There is enough anecdotal evidence around to support that. Some figures, though just don’t fit with what’s around. The latest one that doesn’t add up is some US research that suggests that 72% of people recall an advert with a QR code on it. I know a bit about the US market and although QR codes are becoming more used, 72% recall sounds very high.

The study also gave some glowing results on consumers wanting to use QR codes (87% would use one for a discount or voucher). The study was produced by US marketing communications agency called MGH. Whilst it’s important to gain an understanding of consumers and how they will use technology, it’s even more important to generate accurate results. What was the sample demographic used for this study?

My understanding is that most consumers don’t know what a QR code is, and those that have tried it found it doesn’t work very well. The former is backed up by study from youth communications firm, Dubit who found that  72% (co-incidentally) of teenagers didn’t know what a QR code was. Just 43% identified that it was something to do with a mobile phone and only 17% had actually used one. This was a weighted sample of 11-18 year olds (in other words, representative of that age group across the whole population). Teenagers are a pretty tech-savvy group if you ask me. If QR was becoming mainstream then I would expect that group to know about them.

Whilst QR codes clearly have potential, there seems to be a widespread problem in brands and advertising agencies, who believe that the presence of these square pixels is enough to interest consumers and get engagement. But QR has not caught the public imagination. If it had, the demand for them would be insatiable. It will take much more effort on the part of advertisers if they want to create successful QR engagement.

The current issue of the DMA Mobile Council Newsletter has an in-depth look at QR. Or see my previous blog; The Problem with QR Codes. (Oh, and if you are bothered enough to use QR codes, the one on the right takes you to a report on the US reserach)

Operators are NOT the place for mobile marketing

An Orange Shots campaign for Snickers

Who are the media owners/media channels in mobile these days? Is it the operators or is it the app stores and social media owners such as Facebook, Twitter and Foursquare. Most agencies and brands would regard the latter as the place to buy their media. However the operators would like us to think different. Some mobile networks have made valiant attempts to create their own direct marketing channels, namely Orange Shots and O2 More. Both have a reasonable number of opt-in customers who receive marketing messages on behalf of companies. Whilst there are problems with the media planning and buying in these channels, they have a certain amount of brand appeal. Operator revenues are increasingly squeezed so these channels offer a potentially valuable source of income.

However, according to a YouGov report this week, it would seem that consumers are less than impressed with the idea. In short, over 80% of those surveyed said it was unacceptable for operators to include third party offers in their mobile marketing. Consumers will accept a limited amount of brand marketing on their mobiles: 38 per cent said they would want no more than one per month and 31 per cent saidless than that. 14 per cent were prepared to receive offers up to twice a month, but there was a significant difference between the ABC1 (8 per cent) and C2DE (20 per cent) demographics. The study found that whilst consumers are happy to accept a certain number of offers from their mobile phone companies, such as offers on new tarrifs or handsets, when it comes to third party marketing, they are risking alienating them and pushing them to other networks.

More on the YouGov report here.

Verizon fined for overcharging on data: good or bad for mobile marketing?

The US network provider has been given a fine of $25 million by the FCC for spurious data charges, following a 10 month investigation. They will also have to refund over $50 million to 15 million customers who were overcharged. Much of the case focussed on the network’s pay as you go customers who were charged for activities such as accessing the Verizon home page (promoted as free) or for accessing web pages which failed to load.

It’s good to see the FCC acting against the operators, but ultimately these kinds of activities are bad for business for brands in mobile. In the UK many of the scandals have been around Premium SMS. In spite of some sterling work by the regulator, Phonepayplus, reducing the scams to almost zero, there is still a strong public perception that shortcodes can be dodgy. Similarly, operator charges on data, roaming and roaming data have made some of the public highly wary of accessing sites or apps. A recent DMA/IAB mobile messaging study found that the main concerns about mobile marketing were the costs – percieved as both high and unexpected. That is consistent with previous studies. So, the Verizon rip-off may have a lasting effect that could hold back consumer confidence in mobile marketing.

It’s all in the messaging

The DMA and IAB have just released some joint research into mobile messaging, which shows that SMS and MMS have an important place in mobile marketing. One of the main findings was that consumers would not only like to receive vouhcers and offers by SMS, but that at the moment they do not feel that brands are giving them enough offers. That’s clearly an opportunity. However from a marketing perspective, it isn’t a case of just shoving the offers out there on SMS. What was also very apparent is that mobile users want to opt-in directly to a brand, and even within that, they want to choose what offers (and when and where) they will receive them.

When I speak to advertising agencies, they often consider mobile messaging to be ‘a bit rubbish’ (as one industry journalist described it). Rubbish and old school seems to be the current agency thinking on SMS and MMS. Their focus is on apps, and in particular, iPhone apps. But when people say those kinds of things about mobile messaging they’re missing the point:

Firstly, there are many highly creative and successful mobile messaging campaigns. In my article, The Business Case for Mobile, I give a number of examples – Orange and Walkers Crisps are two obvious ones. They have run imaginitive and successful campaigns using just SMS. They’re far from rubbish and the creative element comes from the idea itself.

Secondly, SMS and MMS are the drivers for many different types of marketing. SMS is a good response mechanism, not only in mobile but across other channels such as TV or outdoor advertising. At the other end of the customer journey, messaging is a great call to action. It can be a reminder to do something (or buy something) and the immediacy of messaging makes it happen.

Thirdly, SMS and MMS are a good delivery mechanism for other types of media. For example, NatWest used O2 More’s opt-in network to send an SMS to customers on the iPhone to download their app. What happened was that 36% of those people downloaded it. By identifying only those people who banked with them and had a compatible handset, there was zero wastage in the messaging and a very high level of engagement. Could you have got that level repsonse through email or TV? I very much doubt it.

Fourthly, people remember SMS and MMS. The study found that almost everyone (98%) remembered the mobile marketing message sent to them. How many other channels can do that? The reason people remember them is that mobile is a very personal device, and SMS is a very personal channel. When we receive an SMS we check it on our phones very quickly. Over 90% of text messages are read whether they are personal, or a marketing message. A number of brands are spending a lot of money developing and promoting iPhone apps to create greater brand awareness, maybe they’re focussing in the wrong place. If you want to create brand awareness, how about using SMS or MMS? It has nearly 100% recall!

In this age of smartphones and convergent devices, apps, web, location or AR etc have an increasingly important place in marketing. There is an argument to say that with such devices there will be a move away from SMS into messaging through IM (and BBM) or through social media, such as Facebook. Whilst there is some element of that going on, there is no evidence that SMS is on the wane. In fact the reverse is true. The universality and immediacy of the channel has seen SMS continue to grow. It has an important place in mobile marketing, and at the end of the day, it simply works!

The full research is only available to DMA and IAB members, but contact me through this blog if you woulde like a copy.

NMA Article on the research is here

Mobile Marketing Magazine article on the research is here

The Business Case for Mobile Marketing

This article is quite long, if you’re looking for mobile marketing case studies, I have linked each brand name to the relevant section:
Orange Wednesdays, Snickers, Lucozade, Colour Catcher, BMW, Fanta and Sprite, Shelter, Walkers Crisps, Carling, Barclaycard, Comic Relief, Wagamama, Marks and Spencer, Ocado and Amazon.

There are many barriers that appear to prevent brands and advertising agencies from using mobile marketing. The lack of data, benchmarking or measurement makes it hard to see the real business case for mobile marketing. Yet mobile clearly has potential. The following article shows how mobile marketing has increased response, sales, transactions and improved brand engagement and awareness.

The questions I often hear from brands or agencies tend to go like this: ‘if we include a shortcode in a TV ad how many people will respond’ or ‘what are the response rates for mobile marketing for specific sectors and in specific demographics’? These questions are hard to answer. It is certainly true that mobile marketing lacks historical data around sectors and demographics. However, it could also be argued that data about response rates is similarly hard to quantify in other marketing channels.

The situation for mobile is improving though. Data from specific campaigns is giving marketers a better understanding of the mobile channel and industry studies, such as the upcoming IAB/DMA research into SMS marketing are beginning to shed more light on the sector. There are also research companies, such as Comscore who are adding to the pool information on mobile user activity. In fact since the introduction of Mobile Media Metrics the mobile web is probably the most accurately measured digital channel.

On a technological level measuring mobile marketing isn’t that hard, but there are no standards across the sector, and different platform providers offer different measurements. When it comes to looking at the impact of mobile across a range of direct marketing channels then measurement is more problematic. For example, text to call is a simple yet effective way to increase response rates from advertising, particularly TV and outdoor. I was speaking to a DM agency about a successful text to call campaign that they ran. It was to get people to make donations to a national UK charity where a text to call number was shown in a series of TV adverts. The response was good, with an increase of over 60% against adverts shown without text to call. However, they were unable to measure the effectiveness of the different TV channels because the call centre only recorded the time that they first spoke to the caller, rather than the keyword used in the initiating SMS. As a result it was impossible to identify which advert had generated which response and it prevented them from tailoring the time slots accordingly. It isn’t difficult to track the origin of the SMS, but the call centre had never seen a need for it and their systems simply couldn’t handle that data. There is an example from Colour Catcher below, where tracking response rates to TVRs was done successfully, allowing them to fine tune their campaign. For anyone looking at a mobile marketing campaign the lesson here is to choose your platform provider carefully.

The good news for mobile marketing is that many companies have taken the plunge. Although they are not always willing to share their results, there are numerous case studies to demonstrate that mobile marketing works.

One Campaign We All Know About

If you’re in the UK, then think about a mobile marketing campaign you’ve heard of. Let’s make that a bit easier. Think of a day of the week. Maybe Wednesday? Now think of a colour. I hope it was orange. And hopefully you are now thinking of Orange Wednesdays. The mobile network operator’s campaign has been running successfully for six years now and it is firmly in the public consciousness. The concept is simple: a free cinema ticket to any Orange customer who takes any friend, on any Wednesday. It is redeemed by texting to a shortcode; something that over 14 million people have done. This has given a strong boost to Orange’s customer retention, and has firmly associated the brand with film going. And Wednesdays. The reason that Orange chose that day of the week was simply because it was the quietest day for cinema audiences and therefore the best time to offer their customers free tickets. However, since the campaign has been going, Wednesday has become the most popular day to visit the cinema outside of the weekend. In fact some film premieres have been moved back to Wednesday rather than Thursdays due to the popularity of that day. That is in part due to the Orange customers, but more significantly the mobile marketing campaign has changed the broad public perception of that day of the week and film going. Mobile marketing has effectively changed consumer behaviour.

Low Cost, High Response

Mobile is a relatively inexpensive medium. Take SMS for example. The cost to send a text message is around £45 per 1000. Even though that is more than sending emails, the read rates for SMS are 95%. True, many mobile users don’t need to open their SMS to actually see it, but that doesn’t detract from the fact that most people read their text messages. What’s more they usually read them immediately. Email fares less well, with 17-25% of emails actually getting read. So although the cost per email is less, the response rates make SMS a compelling option for some campaigns. Email, of course, has its own advantages: it can provide much more information than SMS, it can be media rich and opening rates (rather than just delivery rates) can be measured. However, for some brands and services, SMS can generate a much higher response because of the immediacy of the call to action.

Away from their film campaign, Orange have created a direct marketing channel by offering customers free premium content in return for receiving limited, targeted marketing offers. As customers have opted-in to receive only what they are interested in, they regard it less as marketing and more as useful information. As a result, Orange Shots have reported response rates from the channel. A recent Snicker’s campaign featuring ring-tones with Mr T saw 39% of those who received the message downloading their content. Who wouldn’t want Mr T as their ringtone? And who isn’t going to show it off to their friends? It makes for a nice piece of brand engagement.

The high response against low cost has been of benefit to a number of brands. Lucozade, for example ran a campaign in 2008 giving away free bottles of their fizzy drink. It ran across a number of channels, including mobile. The mobile campaign used an SMS response which delivered a voucher code to the user’s phone which could be redeemed in shops. There was also a click through link from the SMS to a mobile site. Of those who received the SMS, 10% clicked through to the site, an excellent rate when compared to other channels. More significantly, 35% of the requests for vouchers came from the mobile channel, yet only 1% of the marketing budget was spent on it.

Working Across Media Channels – Mobile at Its Best

Colour Catcher is not the coolest product on the market. They are sheets, made by Dylon, that you throw into the wash to stop colours running. It has a bit of a naff image, thanks in part to some cheesy pan-European creative. Worse still, many people just didn’t think it would work. In order to challenge that perception the brand offered a free sheet for anyone to test. Promoted through their TV advertising, the sample could be ordered by sending an SMS to a shortcode. A Yahoo study in 2010 (Yahoo APPetite) found that over 80% of people in the UK watch TV and access mobile media at the same time. So, the mobile is right there with the TV viewer, and text offers the most immediate response mechanism. Colour Catcher expected to send around 4,000 samples in response to their adverts. They ended sending 34,000 samples during the first wave of advertising.
Unlike the campaign I mentioned at the start, Colour Catcher segmented the audience and response by using different keywords for the inbound SMS. From that they were able to track and refine the responses against TVRs. The highest response rate was in the North West of the UK and the lowest were in London and the East Midlands. The result was that in the second round of adverts, they were better targeted and 105,000 samples were sent out. And the samples resulted in increased sales: over 300% against baseline during the campaign and 60% increase post campaign.

Increasing Sales

The car manufacturer, BMW, has been one of the most forward thinking in their mobile marketing. One campaign in Germany focused on the requirement for drivers to use winter tyres in the snow. Customers who bought a car from BMW that year were sent an MMS reminding them about the tyres when winter began. The MMS showed a picture of the model of car they bought, in the colour they bought it with the winter tyres on. They sent 120,000 messages and the result was a 30% uptake. That’s actual sales, not responses. That equates to sales of $24 million from a marketing budget of less than $50,000. What’s interesting about this example is that it shows two key elements to mobile marketing: it needs to be personal and relevant. Mobile phones are amongst the most personal items we own. On the whole we don’t share them and they are with us all the time. So, the most successful marketing campaigns on mobile are those that engage with those facets.
The current Sprite and Fanta campaigns have also had a high level of uptake. Their approach is to offer something that every young person wants. Money. Or at least, the next best thing, phone credit. Purchasers of Sprite and Fanta text a code to a shortcode shown on the tab of the can. They immediately receive 50p phone credit (or 50p on their subscription bill). Hardly surprisingly the first campaign saw over ½ million redemptions. The phone credit is a big attraction, but the success is also down to the simplicity and the immediacy of the campaign. You don’t have to send off for a voucher, or go somewhere to redeem it, or wait a week for the credit. It works because you can get the 50p right there and then. Figures haven’t been announced for this campaign yet, but all the indications are that it has made a significant addition to sales.
It’s not just cars and soft drinks that have been able to use mobile to increase their sales. Some charities have been very successful at it. Shelter, the UK homeless charity relies on direct debit donations for some of their income. Many of these direct debits are made through street collectors; typically the collectors are good looking out of work actors. Unfortunately many people cancel their direct debit without making a single payment. They obviously enjoyed their conversation with the actor, but were less committed to the charity. In order to reduce the first payment ‘no shows’ Shelter sent reminder texts to donors. Rather than harassing the donors into giving though, what they did was to tell stories about how they have helped homeless people. These stories were highly personal and relevant. The result was a reduction in first no shows by 30% and an income increase of 6%. As with BMW, the campaign tapped into the personal, relevant and immediate nature of the mobile channel.

Changing Consumer Behaviour

Orange have already shown how mobile can change consumer behaviour on a macro level, but there are other examples where this has been done on a micro scale. The crisp manufacturer Walkers, has been using mobile as a marketing channel for a few years. A campaign in 2009 used a text response number as part of a rolling competition. The company gave away an ipod every hour to people who texted a code on shown on their crisp packets. One of the things that Walkers did was not just notify the winners but they also sent a response message to the losers. On one day they sent a message to the losers: ‘Did you know that 34% of the winners yesterday came from Barbecue Beef?’. The following day 78% of the entries came from that very flavour. Whilst that particular example didn’t have any specific impact on the brand overall, it shows how the immediacy of mobile can be used to direct customers to specific products or offers.

Increasing Brand Engagement

For many the perception of mobile marketing is as a response and acquisition tool, but many brands have used mobile as a brand engagement channel. The numerous reality TV shows have shown that text voting is popular, and brands have been using it as a customer survey and feedback mechanism. If you make a customer service call to T-Mobile in the UK, it will be followed up with a text-based satisfaction survey. Walkers Crisps took the customer survey concept even further. In 2009 they ran a competition for customers to vote for their favourite new flavour, from a whacky range of choices submitted by the public (Cajun Squirrel was one of them). The campaign started with TV advertising, followed text and online to for the vote itself. The SMS response was massive, with over a million people voting from their phones. In fact most people in the UK will have heard of the ‘Do Us a Flavour’ campaign, because it caught the public imagination to the extent that the winning flavour was announced in news bulletins. For those who don’t remember, the flavour that won was Builders’ Breakfast. The immediacy offered by mobile allowed the brand to both engage with the public and at the same time create massive PR valued at over £4 million. As a result, sales of their crisps rose by 14% in 2009.

For many brands, apps and iphone apps in particular are the favoured way of mobile brand engagement. One of the earliest pieces of brand engagement from a UK brand on the iphone was from Carling. Based on a US app, the Carling ipint offered users a simple game to play from which they would fill and drink a virtual pint of beer. It quickly become the most popular free app in the store. The genius behind the branding though was that the only reason to have the app was to show off to your mates, whether they had the iphone or not. It wasn’t the kind of thing that you were going to sit and do on your own on the sofa at home.
Barclaycard have had even greater success with their Waterslide game. As one of the first companies to use contactless payment technology, their TV advertising used dramatic images of a man using a waterslide built around a city. This concept was then taken onto mobile in the form of the iphone Waterslide game. The app is relatively simple, but highly engaging, where the user navigates down the waterslide by tilting the phone and collecting points on the way. The game has seen nearly 10 million downloads from the app store making it the most successful brand app ever. The Barclaycard app is far from perfect. The branding is very light, and there are no options to continue the customer journey. It is also worth keeping in mind that just 5% of free apps are opened once or never at all. Nonetheless this doesn’t detract from the significant brand value gained from 10 million people downloading the app.

Mobile as a Transaction Tool

Marketing is one thing, but for many brands it’s all about the buying. Increasingly mobile is becoming the medium for transactions. Premium SMS has been around for a long time, but is limited in both what it can be used for and the low payouts that vendors receive. In the UK it has also been the subject of a number of scandals, particularly where TV voting has been concerned. However, where there is user trust, the potential of premium SMS payments has been realised. Charities, in particular have achieved good results with this. The 2009 Comic Relief campaign had an option to donate by text option. Users could send an SMS to give £5 to the charity. The campaign was greatly helped by the fact that the government waived the VAT and the networks gave a 100% payout to Comic Relief. As a result they raised nearly £8 million through SMS donations.
However, we are seeing other more trusted forms of payment coming through on mobile. In 2009 Wagamama, the noodle chain put an app into itunes which allowed customers to order take-aways through their phone. Significantly, for the first time, this app included payment by credit card, and along with it the facility to store that information. Apple has taken it one stage further and is now allowing in-app payment through the itunes store, so users don’t even need to re-enter their card details. For now these are focused on app upgrades from free to paid versions, but it won’t be long before users will be able to pay for all kinds of things.

As mobile users get used to the idea of paying through their phone, then the possibilities for brands to create applications for transactions becomes easier to realise. In 2010, Marks and Spencer became the first UK high street retailer to launch a full mobile site. The site is simple and intuitive with all the functions you would expect from a good site: browse and buy 24,000 products, find my nearest store and a quick purchase button for customers who have registered their card through the site. Much to the surprise of Marks and Spencer, the transaction values in the first month were high. Rather than spending £5 or £10, people were buying beds and spending nearly £1000 through their mobile site. Since then, purchases up to £3000 have been made through the site. Ocado have focussed on the mobile apps to deliver their mobile commerce, which is a good route given their customer demographic. The evidence is in the fact that their iphone app accounted for nearly 5% of their orders. Ebay have used both apps and the mobile web for transactions. The app has been so successful that people have bought boats, Bentleys and even a $350,000 Lambourghini through their phone.

Amazon CEO Jeff Bezos said, ‘The leading mobile commerce device today is the smartphone’ and so he should. The online retailer has revenues of over $1 billion per year from mobile transactions. A friend of mine used to go into Borders and find books he liked. He’d then order them for less from Amazon from his phone, in the shop. No wonder Borders went bust! The next development in mobile transaction are contactless payment phones. With it, mobile users will see transaction as a normal, safe way to make payments. When it comes to mobile retail in particular, all the evidence is that the customers are there and willing to buy.

Putting it Into Practice

So there you have it. Brands in sectors including FMCG, high street and online retailers, banks, automotive manufacturers, entertainment, telecoms companies and charities have all benefitted from mobile marketing. They have seen increased response rates, increased sales, improved customer relationships, created better brand engagement and greater brand awareness all through the mobile marketing channel.

In spite of all these great examples of successful mobile marketing, that of course doesn’t guarantee that other campaigns will necessarily live up to it. There are no guarantees with any marketing campaign regardless of the channel, but there are enough examples to show that mobile is a successful and engaging media channel. There is a lot to developing good mobile marketing campaigns: understanding users, understanding how personal the medium is and developing engaging concepts. Most of all, it needs to be consistent the business objectives and brand strategy. Not only that, but as with any new channel, marketers need to be prepared to fail and to hone their campaigns. That is exactly what the brands mentioned in this article have done. When other brands do this too, they will see that mobile marketing works.

More info: How to Build The Perfect Mobile App, Time for Retail to go Mobile