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Chapter 16 Mobile Marketing and Related Developments Learning Objectives: By the time students complete this chapter they should be able to: Identify important concepts that apply to the adoption and diffusion of technological innovations and the accelerating speed of their adoption. Describe the environment described as pervasive computing and explain changes it could make in the way we live and work. Discuss the current status of mobile adoption in one or more countries around the world and explain why penetration rates and usage behaviors differ between countries. Identify the strategic drivers of mobile technology and why they contribute to the adoption of mobile. Discuss the channels of mobile marketing with special emphasis on the ones that are unique to mobile. List the steps in developing a mobile marketing campaign. Discuss the role smartphones and mobile apps are playing in the world of mobile marketing. Describe the uses of location-based and barcode marketing with special emphasis on their relevance to small, local businesses. Explain the meaning and implications of digital convergence with emphasis on media convergence. Chapter Perspective Those familiar with this chapter from the second edition will find it substantially changed. The wireless world is moving so quickly that was necessary and you will likely want to do some updating each time you teach it. For the first time there are examples of real mobile campaigns in the U.S., but the most well-developed mobile marketing is still taking place in the E.U., Australia, and Asia as examples in the chapter show. Instructors in other countries should find it easy to find good, current examples of campaigns in their own area—perhaps on their own smart devices! On that score, the attempt was to make the chapter device agnostic except for specific data and campaign examples. The marketer needs to be thinking “mobile marketing,” not smart phones, tablets or operating systems. The effort is about reaching the customer anywhere, any time, on any mobile device. As good general sources: comScore has a MobiLens product http://www.comscore.com/Products_Services/Product_Index/MobiLens Nielsen has Mobile Measurement service http://www.nielsen.com/us/en/measurement/mobile-measurement.html The Mobile Marketing Association is a global organization that has a wealth of resources http://www.mmaglobal.com. The theme of the chapter is laid out in the first paragraph: mobile is fast becoming the dominant way to access the Internet—faster in some developing countries where access to the wired Internet is not widely available, more slowly in countries like the U.S. where desktop/laptop usage is deeply ingrained, but it is becoming dominant. That will change the way marketers do their work and that, and its corollary, media convergence, is the theme of this chapter. Consumer Adoption of Technology Innovations Students should recall the concept of the consumer adoption process from their introductory marketing course and perhaps from others. It does, however, have a final stage that is not always included. The internalization stage is especially important in the case of innovative products, and that includes most electronics, that take some learning on the part of customers in order to achieve a satisfactory use experience. Adding this stage stresses the importance of customer support, especially in the time immediately following purchase, to ensure that successful learning takes place. Marketing all complex electronics products can benefit from emphasis on this final step. Students probably need to be walked through this process step by step with a brief example of how it might take place in an Internet-relevant purchase. This concept of product factors that promote adoption is also likely to represent a review, but perhaps less likely to be remembered than the first two concepts. Again, it would probably be useful to walk through the factors briefly giving students, or asking them to give, a brief example of a product that has the features. Software is a good example, because all the factors apply. They need to have relative advantage and to be compatible with existing systems. Most are complex, especially business applications that require integration with existing systems. Complex products like CRM software often come in literally dozens of modules. The virtual demonstrations that are part of most software sites are a good example of communicability. Figure 16.2 is a recent chart chronicling the speed of adoption of technology innovations. The speed of all the newer innovations, the Internet, PCs, and Cellular is astonishing. Where will it run out of steam? Not with iApple products it seems. The text chronicles the first generation of iPhone and iPad sales. Succeeding models have blown through those numbers. I’d encourage you to search for the introductory sales of a recent version to document the point. IBM that makes these points about technological innovation around the world: 1. Innovation occurs with greater rapidity across product types and national boundaries. 2. It requires collaboration across scientific and technical disciplines. 3. The traditional concept of intellectual property is being questioned. It needs to evolve from being a possession that is hoarded to being a productive asset that is invested or even shared to encourage further progress. Those are all powerful statements. Number 3 is particularly challenging, especially because it comes from a powerful technology company. Pervasive Computing The concept of pervasive computing is arguably the framework for development of technology, including the Internet, as we move forward. It may be worthwhile to ask students for their own definition and explanation of the concept. Whether called “pervasive” or “ubiquitous,” it is the idea of embedding computing power in almost everything we use. According to IBM, a pervasive computing environment would feature: Computing power in all areas of daily life A wide variety of wired and wireless devices with data-handling ability Chips embedded in many daily products Network access at any time, from any place Devices would communicate with one another (M2M, location-based services) Table 16.1 sets forth the dimensions of the pervasive environment according to the “6 As” of pervasive computing. Encourage students to pay special attention to the Marketer Requirements column. These are all changes in the way marketing is done—some evolutionary, ones like consumer-initiated and many small transactions may be revolutionary. The next section makes the point that mobile is becoming dominant and gives statistics to support that view, most of which will be out of date by the time you read this. The resources listed at the beginning of the chapter and/or a quick search will provide updates. We will post items of general interest on the Google+ page for the text when we find them. Global examples of mobile marketing campaigns are: The Discovery Channel/Tourism Australia tour is a creative matching of message and execution. Unfortunately we couldn’t get permission of use the image of Paul Sr., Paul Jr., and Mikey because they are quite adorable. You can get an image at http://communicator.com.au/case-studies.html. While you are doing it, look at a site that is highly creative and visually beautiful but hard to use. The J&J Hong Kong campaign is a great example of the precise targeting available to marketers who plan and execute with care, and the metrics suggest a successful outcome. The English National Opera example demonstrates success in an area that is challenging to opera companies throughout the world—attracting younger patrons. We didn’t get permission to use an image of the app, apparently because they were phasing it out. They are active in social media including Internet radio, but apparently didn’t continue with the app. Wonder why? They do have some apps in a channel called Electric Ears http://www.electricears.com/our_apps.html—mostly trying to help people learn to sing opera. Strategic Drivers of Mobile Marketing With those three examples in mind, we look at the strategic drivers of mobile marketing. They are: • • • • • • • • • Context (perhaps best described as appropriate to the customer’s lifestyle) Localization (at the appropriate place) Personalization (with relevant content) Growth of social networks (there is much data that shows people increasingly accessing social nets from their mobile devices) Time sensitivity High value Voice activation One-click payment Security Privacy Expanded permission marketing (define this as more than just permission to contact the consumer. It includes how often, with what kind of message and perhaps where.) The implication is promotions delivered at times and by vehicles that are convenient to the customer; not push communications at the convenience of the marketer. That is a huge challenge to the customer database and to the systems that will deliver this type of promotion. Like social media marketing, this is not marketing as we previously knew it, even on the Internet. Mobile marketing has to be consumer centric in design and delivery, or it will not be successful. Developing Mobile Marketing Campaigns Figure 16.4 provides an overview of the tools/channels that can be used in mobile campaigns. All of them, with the exception of text/SMM, are also options for campaigns in the wired world. That says something about integration; activities and content can be repurposed for the mobile environment. However, it is important for students to realize that you cannot just “scrape” a website and make it a mobile site, nor can you simply make an online display ad mobile. In general they will have to be recreated on a mobile-specific platform. Students should relate to this by offering examples of sites they’ve tried to use on a mobile device that hasn’t been properly configured and was difficult/virtually impossible to use. Planning a mobile marketing campaign has all the steps of a marketing campaign in any medium. The target market aspect is emphasized in order to give some statistics. There is a point to be made that not all mobile users are teenagers playing games, and that is important. The statistics themselves will also age quickly and an update would be desirable. The steps/questions to be answered are: 1. Who are the customers and where are they accessing content? 2. What attitudes do members of the target audience hold about our brand? 3. What message will be compelling? 4. When to send messages and how often? 5. What action do we want the mobile user to take? 6. What metrics will be used to measure the success of the campaign? The Mobile Tools in Action The section starts with two graphics on smartphone adoption and usage. This would be a good place to bring in tablets. This is one chart that will work for awhile http://www.zdnet.com/blog/btl/tablet-adoption-to-grow-by-40-percent-by-2016-reportsays/74131. This section focuses on three primary tools—mobile apps, 3D scanner codes, and location-based marketing. Examples have been chosen to reinforce the point that the target audience may be older, wealthier, business or professional than the usual suspects—teens or young adults. The audience for sports may be less male and less young than many stereotypes would suggest and the NHL app for RIM’s Blackberry is an excellent example of targeting an older, more affluent target audience. They were apparently pleased with this early experiment; they now have apps for iPhone and iPad and carrier-specific apps. See the mobile page at http://www.nhl.com. In an attempt to balance genders and showcase another attempt to attract a younger audience by an event experiencing decline over the years, apps for the 2011 Oscars were featured. All the major entertainment events have them now; you can easily find a current example, probably with a demo you can use in the classroom if you like. Or look for “mommy apps;” there seem to be almost as many of those as mommy blogs! Or just be satisfied with the MSLO apps. It would be good to link back to Chapter 5 which showed the company as an early adopter of the iPad as a channel. Unless you are a devotee of one of the location-based platforms like Foursquare, your students are likely to have more experience with them and it is good to ask what, how much, and where they use them and if they have any qualms about their location being revealed. It’s also important to ask them whether they use promotions on the location-based networks, when and for what. That leads into the small business use of location-based marketing, which actually leads of this section. Students are likely to be less familiar with the location-based platforms that have become so important to small, local businesses. Google’s Places is described and it is easy to access and to show the product demo. The fact that they switched from QR codes, which could be printed out on the user’s own printer, to NFC stickers that have to be distributed to them is interesting. The pundits suggest that is a precursor to tap-and-go payments, and I suspect that is true. Yahoo!, of course, began as a directory, so offering this kind of local service is highly relevant for them. The section ends with a discussion of Groupon, which is location-based but not in the same way as Foursquare and its competitors. Groupon has gotten a lot of bad press—just search “news” for Groupon-bashing, especially by disaffected merchants and a host of competitors of all types springing up. It’s interesting to follow the new entrants and to watch for the shakeout. The Barcode Marketing section discusses QR codes—the fanciful example of “art” in Figure 16.10 and the commercial use (note MSLO again!) in Figure 16.11. We couldn’t resist a promo of our own in Interactive Exercise 16.2. The codes tend to work over several transfers from one medium to another, but they don’t work on PPT, so be warned if you want to use them in class! You and or your students are probably users of the scanner and shopping apps needed to use QR codes and this is another good place to ask for experiences. NFC codes are likely to be less well known but with powers like Google behind their use, that may soon change. Keep an eye on developments in mobile wallets which will use NFC technology. Podcasting is mentioned briefly to wrap up this section. It has become almost an afterthought for most marketers, although some who have established an audience continue to use it effectively. Industry Self-Regulation This is a brief but important section. It highlights the work of the Mobile Marketing Association to establish rules of the road for mobile marketers worldwide. They are based on the Fair Information Practices Principles (Chapter 15): Notice Choice and consent Customization and constrains Security Enforcement and accountability These are industry guidelines. Another global principle holds true. The U.S. favors self regulation; the E.U. and other countries have or are considering legislation regulating, in particular, mobile commerce. Digital Convergence Digital convergence is no longer discussed in terms of one big appliance that would deliver all services, especially to the household. What has converged is media. How many times has the ungrammatical term “repurpose” been used in this text, for example? People want content wherever they are on whatever device is handy at the moment. Media channels have to be interchangeable in use, even if not in technology. The Convergence Center at Syracuse University provides this definition: “Digital convergence” refers to the profound changes in the structure of media caused by the emergence of digital technologies as the dominant method for representing, storing, and communicating information. In the past, information and communication technologies were segmented into discrete economic and technical systems with minimal capabilities for interoperability. No explicit mention of devices here! As far as marketers are concerned, the best conceptualization may be SoLoM, the acronym supposedly invented by venture capitalist John Doerr of Kleiner Perkins Caufield & Byers. It describes the convergence of Social, Local, and Mobile to be a single powerful social force and a key driver for marketing at the moment. KPCB doesn’t permit the use of their graphic, so I had to make my own. The orange “implications” boxes in Figure 16.13 have been discussed at various points in this chapter. So have devices and the challenges for marketers in the “integrating” bars at the bottom. What most commentators seem to miss is the role of search in this ecosystem. While we may have a few favorites marked and while we may get notifications of various types, search is at the heart of finding out what is going on where, and which of your friends are participating. Search, once again, may be the trigger for a SoLoMo activity by a person or a group. This point is well made in this graphic, really aimed at marketers, not dummies! http://socialcommercetoday.com/solomo-for-dummies-chart It suggests some of the opportunities inherent in some of the major platforms and this is something else that is in its early stages. The next big thing? Probably—for the moment at least! The chapter ends with some examples of media convergence and a description of the Huffington Post business model. HuffPo has integrated user contributions into its main framework in a way that few others have done. If you have time, a live visit to the site is interesting. You have to scroll ALL the way down the front page to get to the list of sections which includes News (edited, many paid), Blogs (user contributions), Columnists (most, perhaps all, syndicated), and All Things Arianna (she’s the founder, after all). The user engagement material is buried on the FAQs page, but when you find it, the material is detailed and interesting. Discussion Questions 1. Explain your understanding of what mobile marketing is and what role it can play in marketing campaigns. Mobile marketing simply is marketing effort that reaches people on mobile devices. It includes, but is not limited to, mobile commerce. Examples throughout the chapter emphasize mobile campaigns but include campaigns that have offline components, whether it is driving customers to retail stores or reinforcing messages sent by traditional online or offline techniques. Students may have some interesting examples of mobile marketing campaigns. 2. Discuss the concepts of the adoption and diffusion of technology products. Why is the diffusion process becoming increasingly rapid over time? Basically, the consumer adoption process is a model of the stages people go through in adopting an innovation. The stages are: Awareness Interest Evaluation Trial Adoption Internalization It is worth re-emphasizing the importance of customer support in helping customers to internalize the innovation—to incorporate it into their lifestyles. The diffusion of innovations concept models the stages (segments) by which a product is adopted in a population of interest. The segments are: Innovators Early Adopters Early Majority Late Majority Laggards Marketers would like to be able to identify Innovators and Early Adopters in order to target them in ways that would interest them in the product and encourage them to engage in word of mouth (“buzz”) favorable to the product. The increasing speed of the cycle is certainly facilitated by communications of all kinds, including but not limited to the Internet. However, the data about Apple products in the text suggests another dimension. I’d characterize it as the shared communications among brand loyalists that are a result of having a loved and trusted brand. 3. Do you believe that mobile will become the dominant type of Internet marketing? Why or why not? The text suggests strongly, and many experts agree, that it will be dominant, already is in some contexts. People like to stay in touch in economies of all types. Add to that the fact that mobile has leapfrogged the wired Internet (cheaper and faster to deploy) in many developing economies, and you have a recipe for a dominant channel. 4. What are the strategic drivers of mobile marketing? Why is each important? The strategic drivers are: Context, the user’s situation from which the contact is made—time, place, device (desktop or mobile) Localization, the physical location from which the user is making contact—a shopping mall, for example Personalization, the relevant content—a coupon for the store in the mall that the user is passing at the moment Growth of social networks, which are available on mobile devices and make it easy to communicate, share, and shop Time sensitivity, the time at which contact is being made—the coupon should be offered when the user is near the store, not before or after High value, the value of the content to the user—the coupon must be of sufficient value to cause the user to consider entering the store and redeeming it Voice activation—the user should be able to activate the device without having to use the keyboard in applications like onboard automobile systems One-click payment—forms are onerous in desktop applications, much less small mobile keyboards and screens. Payment mechanisms should be specified in advance and stored for later use Security must be strong and apparent to the user in order to create trustworthy systems Privacy—opportunities for capture of data (GPS data, for example) are even greater with mobile systems and protection of user privacy becomes even more important Expanded permission marketing—it is no longer sufficient to ask if the marketer may capture and use data. It become imperative to ask how the user wants to be contacted, how often, and for what reasons. None of these drivers specify pushing advertising or promotions to the user without specific, time- and location-sensitive permission. Permission marketing must be expanded to allow the user to specify the terms of contact. 5. Mobile marketing content is comprised of various types of media and the corresponding delivery channels. What are the channels by which mobile content can be delivered? This question is an attempt to get students to distinguish between types of content and types of delivery channels. They are clearly related. Videos are delivered on video channels like YouTube and Vimeo, for example. But videos can also be delivered on other channels— websites, for example. Today’s Internet is an ecosystem of content and channels, but they are not the same thing, and it is important for students to make a distinction. That said, mobile channels include: Email Mobile apps Bar sodes Text messages, SMS, EMS Podcasts Music Videos Content marketing (which may be more a marketing technique than a channel) Search marketing Display ads Writing this, I realize that I didn’t include radio. It didn’t seem important at the time, but with the rise of Spotify (http://www.spotify.com/us) and its competitors radio has become a viable mobile channel. 6. True or False: Receptivity to mobile marketing efforts can be effectively predicted by knowing the age of the target audience? Discuss your reasoning. While it is indisputably true that the young do more, more often on mobile than their elders, examples in this chapter have been chosen to demonstrate the use of mobile by older and more affluent consumers. The NFL hockey app, the MSLO cooking apps, and the Home Depot use of QR codes are a few of many possible examples. It would be good to ask students for others. 7. Why are smartphones and tablets such an important enabler for mobile marketing? Their ubiquity and download speeds are key reasons. However, had not developers from all kinds of businesses not rushed to offer apps of all kinds, mobile marketing would still be languishing. 8. What is a mobile app? Why are mobile apps so important in mobile marketing? PC Magazine defines an application as “software that is used for business or entertainment.” That is simple, straightforward and it captures the essence of an app. Create apps that are meant for use on mobile devices and you have it. You can illustrate the importance by thinking about what was on the smartphone when you (or one of your students) first purchased it. There was an operating system and a few apps—supplied by the device makes, the OS maker, or strategic partners. After a few weeks or months of use, how many apps are there now? Many more. The number and types of apps your students have downloaded will provide a window into their lifestyles that would make an interesting discussion. 9. What are some of the uses of location-based mobile marketing? Because knowing where the user is at any given moment is the essence of the GPS systems on our mobile devices, location-based marketing is a natural for retailers of all types. Any retailer, large or small, can use location-based marketing to drive customers to a bar, a store in a mall, a small local retailer—and on and on. There are other uses for location-based communications— severe weather alerts come to mind—but the communications are not necessarily marketing. Your students are part of the target audience for many mobile marketers; what experiences do they have—good or bad? 10. Why do you think couponing sites have become so popular? Do you use any of them? Why and for what purposes? This is more a chance to recount experiences than a profound question. People like deals and, first the Internet, and now the wireless Internet, have provided an effective way for marketers to deliver them. Again, the experiences students have with the use of coupons will shed light on their lifestyles. A surprising number of them may have been less than satisfactory for a variety of reasons, and that will be interesting also. 11. How can small retailers participate in mobile marketing? Many mobile platforms are self-service. From Google Places to Foursquare to new entrants like Pinchit (a site and mobile app for tastemakers http://www.pinchit.com/new-york) offers free or low-cost promotional opportunities. It’s important to note that those take place on the third-party platforms. Mobile apps and mobile websites are not free. Mobile apps require skilled programmers. Mobile websites require a different platform from an Internet website host. Here’s a local favorite that is a strategic partner of both Yahoo! and Google, who want the small businesses in their listings (Facebook is developing a similar service) to develop a mobile site. The Unbound Commerce site (http://www.unboundcommerce.com) has good content about their product lines; no interactive or video that I can find. It’s important to distinguish between self-service and vendor needed, but all the options are within the budget of most small retailers. 12. What is the difference between QR codes and NFC? Give an example of the use of each. The technology difference is that a QR code has to be physically scanned using an app (and there is no standardization, so one app doesn’t work on all QR codes). An NFC code works on shortrange radio wave technology like Bluetooth. The user’s device can communicate with NFC codes in ways like tapping the object. Some communications can be accessed without effort, perhaps while the device is still in the user’s pocket or bag: http://www.nfc-forum.org/aboutnfc. If the user is walking down the street and sees a restaurant that looks good, a tap on the Google Places sticker can bring up the menu. If she is checking into a hotel, the hotel system may be able to confirm her registration and provide a digital key to her room as she walks through the lobby. See http://www.nfc-forum.org/aboutnfc/nfc_in_action for an extended example. 13. What is meant by digital convergence? Digital convergence definitions no longer focus on devices. The focus is now on media. The definition used in the text is: “Digital convergence” refers to the profound changes in the structure of media caused by the emergence of digital technologies as the dominant method for representing, communicating information. In the past, information and communication technologies were segmented into discrete economic and technical systems with minimal capabilities for interoperability. The user outcome is the ability to access any digital content on any device at any time in any location. That is a powerful concept. 14. Do you expect media convergence to continue to become even more important over the next few years? I have no insight into “the next big thing,” but until a revolutionary innovation comes along and replaces it, media convergence should continue and perhaps even build momentum as even more people have smart devices and become even more accustomed to accessing any content they want on those devices. Internet Exercises 1. Internet Career Builder Exercise. 2. Three mobile marketing campaigns—Discovery Channel, Johnson & Johnson, and ENO—are discussed in this chapter. Dissect the use of media in these campaigns. Discuss the way in which other Internet and traditional media can be used to enable and support mobile marketing campaigns. Discovery Channel/Tourism Australia: Mobile campaign microsite Blogs written by the riders Integrated with Tourism Australia’s global branding effort which almost surely used a wide range of online and offline media: http://www.australia.com. J&J Define contact lens: Branded WAP site Banner ads placed on mobile sites MMS messages to existing database, new opt-ins ENO: Text messaging to patron database Mobile app for fundraising and ticket sales While the text doesn’t say so, the mobile app was available on the ENO website while it was being used The three campaigns illustrate some of the possibilities. J&J was limited to mobile. ENO used mobile and its website. Tourism Australia had a fully integrated online and offline campaign that has as its hub a visually beautiful and informative website. Other examples in the chapter include videos (NHL) and bar codes (MLSO). 3. Select a B2C, B2B, or nonprofit organization, business, or brand of your choice. Outline a mobile marketing campaign following the process portrayed in Figure 16.5. (Hint: you will find it difficult to specify what is to be measured for this campaign unless you establish specific and measurable marketing objectives for it). The steps/questions to be answered in outlining the campaign are: 1. 2. 3. 4. 5. 6. Who are the customers and where are they accessing content? What attitudes do members of the target audience hold about our brand? What message will be compelling? When to send messages and how often? What action do we want the mobile user to take? What metrics will be used to measure the success of the campaign? This would make a useful assignment. However, the hint gets a major issue I find. Students, both undergraduate and graduate, have a terrible time setting marketing objectives, and it is a good thing to force them to make the effort. SMART objectives (http://www.marketingteacher.com/lesson-store/lesson-objectives.html#) are part of it. Specific and measurable are difficult to wrap your arms around in practice, not to mention realistic. Mapping metrics to objectives has been illustrated several times in chapters including social media and metrics. In my experience students will often start with something that’s not a marketing objective—I’m going to build a website, for example—a personal objective, but not a marketing result. It usually takes several iterations to get any set of objectives to acceptability. Developing an objective setting/metrics mapping assignment would be excellent, but it’s not clear you can leave it to the last weeks of the semester. My students do this in the context of developing a marketing plan. You can find my syllabi and outlines for Internet and social media marketing plans in this manual. 4. Take an inventory of the apps on your own smart device or someone else’s. Even better do both. Discuss the use of the apps and the impact they have on your lifestyle and activities. Compare your usage to someone else’s if you are able and draw marketing implications from the similarities and differences. This would be a fun exercise because the apps are quite revealing. You could broaden it by having them sample one person of their own generation and one who is significantly older or younger. Or, if you are brave enough, you could list your own apps and either compare with a few of theirs or you could ask them to profile the consumer who has that set of apps. However you do it, it should be interesting. Key Terms barcode printed, machine readable set of black lines and white space that identifies products according to the universal product code; 2D bar codes are represented by a matrix in order to store more information. curation organizing and maintaining a collection. digital convergence changes in media that have been brought about by changes in computing devices and networks. embedded device device, often a microchip, that becomes part of another device, rendering various services, often doing so without human intervention. interoperability the ability to exchange information between different operating platforms. location-based service content that is delivered based on the user’s current location. media convergence several types of media or media channels (text and images, for example) working together in a fashion that is seamless to the user. mobile app a software application that runs on a smart mobile device. NFC (near field communications) a type of wireless connectivity that enables communication between enabled devices over short distances. pervasive computing computing power embedded in devices that makes computing capabilities available to anyone, anywhere at any time. podcasting a service that uses RSS technology to download audio content to a user’s device. SIM (Subscriber Identity Module) card a removable chip for cell phones that stores personal data and makes it easy to switch from one phone to another. text messaging electronic message sent from one cell phone to another.