Mobile marketing is the most personal medium available. People run their lives off of mobile. It’s business, it’s personal, it’s information gathering. It’s on 24/7. We call it the “brand in the hand.”
— Global Media Manager, Adidas International
First it was the Internet. Now, the convergence of the Web and wireless technology has begun to challenge many of the assumptions companies have about their marketing strategies. Indeed, the combination of the Internet and hand-held mobile devices is making possible a whole new array of marketing applications and offerings. This is what we refer to as “brand in the hand” —the potential for branding and marketing communications to be delivered to people in their hands while they are shopping, watching a sporting event, commuting, working or doing chores at home. In the past, advertising and branding models were based primarily on 30-second commercials and magazine ads. Today, the growth of digital and mobile communications is changing so fast that consumers may soon find themselves interacting with brands in fundamentally different ways. For now, the target delivery medium for mobile marketing applications is cell phones, personal digital assistants and other hand-held devices. But scenarios such as the one in the film “Minority Report,” in which holographic point-of-purchase displays for the likes of Gap clothing engage passers-by by name, are not that far off in certain Asian and European markets. Before companies rush into this new marketing arena, though, they need to understand some fundamental issues. For starters, in what ways does mobile marketing differ from traditional approaches? Moreover, when should a company pursue a brand-in-the-hand initiative — and when should it not? And how should firms integrate such a novel approach within their overall marketing strategies?
Getting Personal
For many people, the cell phone, PDA or other hand-held device has become virtually a necessity of everyday life. (See “The Global Spread of Mobile Technology.”) In particular, young consumers, who tend to be technology-savvy multitaskers, have quickly adopted mobile devices to socialize, play online games and download content, including music, ring tones and wallpaper backgrounds. Within this market segment, cell phones have become a status symbol and a means for individuals to express themselves through customized face plates, ring tones, carrying cases and so on. In this sense, cell phones have become similar to clothing, jewelry and other external communicators of the self. One observer has even claimed that mobile communication devices may represent the “ultimate expression of an individualistic society.”
The Global Spread of Mobile Technology
To understand how companies develop sources of competitive advantage through their global strategy, we conducted in-depth analyses of 50 American, European, Latin American and Asian companies. We also interviewed and analyzed the public statements and other interviews of senior executives and managers in charge of global strategy in more than 20 of these companies. In addition, we reviewed the relevant strategy literature of the last 30 years, searching for articles discussing the different ways in which companies can develop sources of global competitive advantage. In this article, we cite a number of these companies, along with examples from several widely taught case studies, but regarded from a different angle than the one from which these studies are conventionally taught.But younger consumers are not the only ones to embrace mobile technology. In fact, the reach of mobile devices is perhaps best understood by segmenting people on the basis of their acceptance and use of technology as well as their lifestyle motivations, rather than solely on background variables such as age or gender, which can be less representative of actual behavior.2 In one such study, Forrester Research, based in Cambridge, Massachusetts, looked at factors such as technology attitude and income along with three primary motivations (career, family and entertainment) to categorize consumers. The people in one resulting segment — “mouse potatoes,” a relatively older group characterized by high income, interests in entertainment and a positive attitude toward technology — appear to be likely candidates for adopting mobile technology.
As increasing numbers of consumers become users of mobile devices, companies will likely develop marketing strategies for exploiting that new medium. In fact, global brands such as McDonald’s, Coca-Cola, MTV, Volvo, Sony Pictures, Nike and Adidas have already begun to explore brand-in-the-hand concepts. For example, one of the newest forms of marketing is the text-in promotion, in which people with cell phones can engage in a variety of promotions by text messaging certain codes. In Europe, Coca-Cola Co. and McDonald’s Corp. recently partnered to promote the popular movie “Finding Nemo” by distributing 25 million drink cups that each contained a unique text message code. Consumers could submit the text code through their cell phones to win prizes and downloads such as mobile postcards and Nemo wallpaper. In all, more than 4 million people participated in the campaign.3 In another instance, MTV Networks Co. recently partnered with Virgin Mobile Telecoms Ltd. to promote special ring tones that were featured in MTV’s 2005 Video Music Awards show and were available exclusively on Virgin Mobile phones.4
Like Web communications, mobile marketing can be interactive, but it offers the possibility of a closer brand connection because of the personal nature of hand-held electronic devices. Cell phones and PDAs store information about individuals’ social networks of friends, family, and business or school contacts. The devices might also contain a calendar of appointments and serve various other functions, including alarm clock, camera, calculator and video game player. Therefore, they often stimulate an emotional connection with their users, as evidenced by the popularity of accessory products that people purchase to personalize their phones, including customized ring tones, face plates and wallpaper backgrounds.
At this point, mobile marketing is tied primarily to cell phones because of widespread use as well as the portability of the devices. It should be noted that brand-in-the-hand strategies do not include laptops accessing WiFi wireless networks because of the limited mobility of such computers. Further, the usage characteristics of cell phones versus other devices are quite different. Not only are mobile phones very portable — many people carry them around everywhere — but they also tend to be on most of the time. This raises the important differentiating characteristic of a mobile marketing strategy versus a traditional approach: The former can be executed specific to a consumer’s location or to the particular consumption context. In other words, the true benefit of mobile marketing is realized when brand-consumer communications and interactivity takes place at the more personal, contextual and location-based levels. Because individuals can be, and often are, connected anytime and anywhere, mobile marketing can be used to collect data through the wireless Internet to determine not only the exact location of a consumer at a given time (at Wrigley Field, for example) but also the context of why that individual might be there (to cheer a favorite team, the Chicago Cubs). With that information, more meaningful or relevant advertising messages or promotions can be delivered to the consumer (a 30% discount coupon for select Cubs merchandise) on his mobile phone or other hand-held device in a setting where the consumer may be receptive to receiving such communications. Scenarios like this one are becoming increasingly possible, especially now that Finland-based Nokia Corp. has introduced a permission-based mobile service that employs Bluetooth and other close-range radio technologies.
A New Marketing Paradigm
Marketing approaches can be characterized along two dimensions: (1) the level of consumer interactivity that the medium enables and (2) the degree of location specificity of the medium itself. (See “A Comparison of Marketing Communication Approaches.”) Traditional media are typically “lean-back,” involving little interactivity. Television viewing, for instance, is a relatively passive activity. Some traditional marketing media, like radio, TV and print advertising, are independent of location (for example, an ad in a magazine might be read at home or during an airline flight), while others, like billboard and retail advertising, are specific to the consumer’s location (for example, an “Everything on sale” sign that is posted in the window of a jewelry store).
In contrast, some newer types of media are “lean-forward,” requiring a greater degree of interactivity. Web surfing, for instance, requires a person to make conscious decisions about what sites to access next. Here again, the marketing medium can be either independent of location (for example, a Web site’s pop-up ad that can be viewed on a computer at work or at home) or dependent on location or consumer context (for example, the Chicago Cubs coupon). The unique value of mobile marketing is that it enables both brand-consumer interactivity and location specificity that cannot be achieved with other approaches. In other words, the mobile platform offers a fundamentally different type of consumer experience.
This new marketing paradigm could play an increasingly important role, particularly for reaching certain consumer segments. Consider the fact that most teenagers in Europe’s largest TV broadcast markets are interested in some level of interactivity between TV and their cell phones. In response, corporations may need to pursue mobile strategies aggressively to connect with such consumers. And it follows that, as more and more people migrate to wireless communication platforms, they could become increasingly difficult to reach with traditional advertising and promotional methods.
The Role of Mobile Marketing in Branding
But will brands only be able to compete in the future by exploiting alternative forms of communication, such as mobile marketing? And, if so, how can such new approaches complement the more static, traditional forms of advertising? The answers lie in the characteristics of mobile marketing that enable brands to achieve three objectives: (1) foster top-of-mind awareness and attitude formation, (2) increase brand-consumer involvement and interaction through content downloads, e-mails that trigger a viral effect and other activities, referred to as “second order” responses, and (3) directly influence consumer actions related to purchasing transactions, referred to as “first order” responses.
Build Brand Awareness
Mobile marketing creates new opportunities for companies to form or shift consumer attitudes toward a brand through the use of value-added content (rich, digital media offerings, including audio and video) that can be personalized with context and location specificity. During the 2004 UEFA European Football Championship, for example, Adidas International, based in Amsterdam, Netherlands, a division of Germany’s Adidas-Salomon AG, launched a campaign that enabled cell-phone access by customers to a number of brand assets, including photos of popular athletes and entertainers associated with the championships, sport-specific commercials and short movies. The company also developed an applet that could be downloaded to a mobile phone to provide real-time scores and other information about the soccer matches. The software program generated more than 60,000 subscribers across Europe. In the music industry, recording labels and artists are employing mobile marketing to launch new albums. For example, the band New Order, which is attempting a comeback after several hit songs in the 1980s, is promoting its new compact disc through digital posters, song clips, ring tones and photos of the band members that can be sent directly to fans’ cell phones via infrared and Bluetooth technologies.6 To link that marketing effort to retail outlets, the digital posters will also be displayed at select stores carrying the CD. It should be noted that the Adidas, New Order and other similar campaigns not only prolong the brand-consumer relationship, but they also personalize it because of the close attachment that many people feel toward their cell phone.
Increase Consumer Involvement and Interaction
Mobile marketing enables frequent consumer involvement and interaction through repeated content downloads and online games and contests. Such second-order consumer activities are not tied directly to an actual purchasing transaction, but they can be instrumental in establishing and prolonging the dialogue between brand and consumer. The unique advantage of the mobile platform is that these dialogues (and the resulting brand-consumer relationships) can be forged at a more personalized and contextual level. And as the bandwidth of wireless communications continues to increase, the various applications, including audio, data and streaming video, that can be delivered to people’s hands via cell phones will become ever more sophisticated, above and beyond simple text messaging.
Adidas, for example, enables consumers to download photos of its popular athletes, such as soccer star David Beckham, and digitally superimpose their own photographs on those images. Some music companies allow people access to a portfolio of cell-phone downloads (including ring tones and wallpaper) that leverage certain artists and their songs. Fans key in text codes for promotions such as “a day in the life of … ,” which continually posts updated photos of a particular artist, sponsored by the brand. To introduce its new S40 car, Sweden’s AB Volvo developed a European mobile marketing campaign. Targeted participants could view a video teaser of the car on their mobile phones, and then access the Volvo Web site via an e-mail link to see the remainder of the video. About one-third of the people downloaded the video clip onto their mobile phones, and half viewed the entire footage from the Web site.
In the financial services industry, New York–based Citibank has initiated a program that allows customers throughout Europe, the Middle East and Asia-Pacific to use their cell phones to gain access to their bank accounts as well as to obtain stock market updates and alerts on select stocks. Other companies have sponsored contests to increase brand-consumer interactions. In 2004, the Dove line of skin-care products developed a marketing campaign that encouraged consumers to voice their opinions regarding what “real beauty” meant to them.9 Physical billboards were driven through two major U.S. cities, and people on the street could send short text codes on their cell phones to vote in favor of specific images of beauty shown on those displays. The results were then shown in real-time on a spectacular billboard in Times Square in New York City, and participants could engage in online discussions on the topic at the Dove Web site.
Influence Consumer Response and Activation
One limitation of traditional marketing approaches is that companies often don’t know what actions, if any, consumers take after being exposed to an ad. The Internet has begun to change that by providing firms with click-stream data. But with mobile platforms, not only can consumer behavior be tracked online, it also can conceivably be activated in situ. Currently, commuters in Japan can scan bus schedules with their phones and receive coupons from stores along their route. Those retailers can then track the redemption rate of those coupons. In the future, cell phones will likely be able to read the radio-frequency identification tags on items in stores, including clothes, shoes and sporting equipment. Those products could then “talk with” shoppers to relay important information, such as special promotional offers. But the ability of mobile marketing to trigger consumer purchases remains in a nascent and experimental stage. Many organizations capture information about customers in various functional areas, including sales, marketing and customer service, but they lack a sophisticated system for integrating those multiple databases. Consequently, they have trouble personalizing their interactions with customers and therefore have a limited ability to take full advantage of the mobile platform. A potential danger is that a company could alienate customers by bombarding them with different messages from separate areas of the organization. Of course, integrating disparate databases would require substantial funding, and firms would need to decide whether the mobile platform should be positioned primarily as a mechanism for branding and data collection (that is, a back-end system) or for conducting transactions (a front-end system). On a related note, companies also have to determine whether they require a back-end infrastructure, such as a dedicated warehouse, for mobile fulfillment.
Important Issues
To investigate those and other issues, we conducted an in-depth case study of Adidas, the global manufacturer of sporting footwear and apparel. (See “About the Research.”) Adidas has made an aggressive foray into the mobile platform in an attempt to leverage more from its marketing dollars with respect to the industry leader, Nike Inc., of Beaverton, Oregon. Throughout its various mobile campaigns, Adidas has faced numerous challenges, and the company’s experience has led us to identify six major issues for managers to consider before implementing a mobile-marketing strategy.
About the Research
This research is an extension of our ongoing work over the past five years to examine the ways in which companies are attempting to incorporate new technologies into their marketing and branding strategies. In this study, we conducted a series of in-depth interviews with executives responsible for managing worldwide advertising and media in the Global Media Group at Adidas International, located in Amsterdam, Netherlands. Although there are limitations to single-source studies, we believe our work with Adidas is representative of leading mobile-marketing practices and applications. Adidas competes in a highly competitive market and occupies a position behind the industry leader, Nike Inc. Because Adidas cannot spend as much as Nike on marketing communications — Adidas’ annual advertising and promotional spending is $900 million, compared with $1.4 billion for Nike — it has adopted more innovative, yet cost-effective, ways of reaching consumers, such as through mobile marketing.
Read, Share & Enjoy!
http://sloanreview.mit.edu/article/the-coming-era-of-brand-in-the-hand-marketing/