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Mobile Marketing in China 2013 Foreword The mobile age is upon us. Consumers aren’t just going online; they are online on the go – using their smartphones more than ever. This is particularly true in China, where smartphone penetration is burgeoning, both in cities and regional areas. For marketers, the dawn of the mobile age represents huge opportunities. As consumer behaviour undergoes a significant revolution, marketers can likewise revolutionise the way they engage audiences to drive more sales, boost engagement and loyalty, and generate invaluable buzz. Yet mobile marketing also comes with its challenges. At the base level lies the definition of mobile marketing. Is it a distinct marketing channel, or an amalgamation of other channels? Or, is it simply a device to facilitate channel execution? How does mobile fit within the broader marketing mix? As more people use their smartphones to redeem vouchers or compare prices while in-store, for example, the mobile channel is becoming the ‘glue’ sticking the online and offline worlds together. Mobile has proven itself as the dominant channel in marketing, complementing and supporting many other channels in the multichannel mix. Now, marketers need the ability to integrate technology-rich channels with more traditional channels to ensure the customer experience is seamless whether they are in-store or online, on their Android phone, or interacting via any of the many other channels in the mix. China has gone mobile Right across China, people are embracing the mobile era. According to a recent Fiscal Times article1, there are 330 million smartphones in use in China right now. This exceeds the total number of mobile phones active in the US; and Experian predicts the number of smartphones in China to grow to 500 million by the end of 2013. Aligned to this phenomenal growth in smartphones is the growth in mobile apps and services. The same article states that Tencent’s WeChat – the dominant social media network – now has almost 300 million users; and e-tailers Baidu.com and Taobao have recently upgraded their offerings to make them more mobile-friendly and thus capitalise on the wave of smartphones hitting the market. The majority of consumers in China – both in the city and regional areas – now use their mobiles to access to the internet. For marketers, this provides easy reach to masses of potential customers. But what tactics work now? And what will work in the future? The maturing of mobile creates a more complex marketing environment, in which overwhelming amounts of consumer data can be gathered and analysed. Like never before, marketers need to have the tech-acumen to really understand how all the channels converge, and how each channel can be optimised for where they converge. In China, which has the highest smartphone penetration in the world, there is absolutely no doubt that the future is mobile. 1 “ China’s Smartphone Boom Has Huge Global Impact”, Last edited 16 January 2013, http://www.thefiscaltimes.com/Articles/2013/01/16/Chinas-Smartphone-Boom-Has-Huge-Global-Implications.aspx#page1 1 Mobile Marketing in China Foreword Predictions for the future of mobile Despite the clear prevalence of mobile devices in people’s lives, mobile marketing and m-commerce are yet to reach their peak in China. While it has already leapt to the top of the digital channels, marketers need to take their understanding and application of mobile marketing strategies to a new level. As more consumers purchase smartphones – and existing users become even more willing to engage in dialogue with brands via their mobiles – marketers need to work harder to build relationships via mobile channels; use analytics and targeting to better engage; and apply best practices to avoid being perceived as spammers. With fewer people in China using laptops and desktops to access the web, it won’t be long before smartphones ‘drive brand awareness, pre-purchase research, price comparison, payments for both online and in-person transactions, and social media distribution of popular content.’2 The smartphone will become a digital replacement for almost everything that we carry in our pockets and wallets – cash, credit and debit cards, passes,receipts, vouchers, tickets and loyalty cards. Security features will become increasingly important as more personal data is stored in the cloud. At the same time, marketers will need clear strategies around data collection, management, including data cleaning and optimisation, recognising that the proliferation of data will be both an opportunity and a challenge. At the user level, the consumer will dictate where, when and by whom they can be ‘seen’. Allied to this, their preferences will become more sophisticated – with the ability to specify the products and services that they receive information about, and the way in which they are communicated. Many marketers in China are adept at giving consumers what they want on their mobiles. There are some great examples of SMS campaigns that feature targeted, often time-sensitive promotions that convey the notion of exclusivity that consumers love. For example, Taobao launched an online ‘shopfest’ to celebrate China’s Double Eleven on November 11th 2012. The majority of the merchants used SMS to offer discounts on their virtual stores, especially to customers who have purchased before. This resulted in a historical record high of RMB 19.1 billion in sales transaction on that day.3 As mobile devices become more integrated with people’s homes, cars and offices, marketing activities will accelerate and an increasing proportion of marketing budgets will be spent on mobile communications. Experian expects that by 2015, turnover of the mobile marketing market in China could exceed RMB 20 billion and within five years or less, mobile will overtake all other digital channels as the most effective way to reach and engage with consumers. Given all of this, marketers have little choice but to incorporate mobile into their cross-channel marketing strategies. But they can pay heed to the experiences of their peers in doing so. This whitepaper provides insights and commentary on research conducted by Experian Marketing Services in China, into how marketers are currently using mobile marketing as part of their broader strategy. 2 “ China’s Smartphone Boom Has Huge Global Impact”, Last edited 16 January 2013, http://www.thefiscaltimes.com/Articles/2013/01/16/Chinas-Smartphone-Boom-Has-Huge-Global-Implications.aspx#page1 3 “ Tmall and Taobao See $3 Billion in Sales During China’s 24-Hour Online Shopfest”, Last edited 12 November, 2012, http://www.techinasia.com/china-ecommerce-sales-day-2012-tmall-taobao/ 2 Mobile Marketing in China Executive Summary Marketing is undergoing a significant paradigm shift. Consumers are calling the shots more than ever before – with the world at their fingertips, or in their pockets, they are driving a new dialogue with brands. As mobile cements itself as a marketing channel with serious clout, marketers need to understand how this channel fits within their broader cross-channel strategy. To gain a greater understanding of mobile marketing in China, Experian Marketing Services surveyed 321 marketers from a wide range of industries, including retail, financial services, telecommunications/utilities and travel/ leisure. These B2B and B2C marketers are immersed in the ongoing quest to engage more effectively with their customers – which, in order to keep pace with industry competition and stay ahead of the curve, must now incorporate mobile. Compared to Hong Kong, where roughly two-thirds (65%) of marketers have successfully tested mobile channels, the research shows that only 36% of marketers in China have tested mobile. Furthermore, only 16% have incorporated mobile as a regular marketing channel. This is a surprising result, and could be that western brands are adopting different tactics than local brands. Yet the future of mobile is bright in China. The vast majority of marketers (92%) agree or strongly agree that mobile is going to be one of the most popular ways for customers to engage with brands. Likewise, 84% anticipate that sales made through mobile devices will increase or significantly increase in the next year. The 2012 Experian Marketing Services Mobile Marketing research sought insights into the current usage of and attitudes towards mobile marketing, the barriers and challenges marketers face, and the plans for the coming years. With the spotlight clearly shining on the mobile space, it becomes interesting to assess which mobile tactics marketers plan to implement to achieve these forecast sales. On the radar for the next 12 months are email marketing campaigns optimised for mobile and location-based mobile services. Fifty per cent of marketers plan to use email campaigns in the coming year, and 44% have location-based mobile services in their sights. Overall, the research findings reveal that China is on par with countries like Australia and Singapore when it comes to mobile marketing adoption – with less than half of marketers yet to implement a mobile marketing campaign. Figure 1: Marketing channels ranked by perceived importance compared to twelve months ago 80% More important 70% Equally important 60% Less important 50% 40% 30% 20% 10% 0% Direct mail 3 Social media Mobile Marketing in China Email Face-to-face SMS MMS Website Phone Traditional advertising (radio, TV, print) Online advertising Executive Summary Current favourite tactics – SMS and MMS – reflect the power and immediacy of mobile to grab a consumer’s attention and drive them in-store or online to make a purchase. China boasts the largest e-commerce market in the world, and SMS and MMS are the principle drivers of the market. Experian predicts that these two mobile tactics will continue to dominate for the next few years, and points to examples of banks and retailers (explored in further sections) who are already leveraging these tactics to great effect. Despite the rapid growth in mobile, traditional channels such as direct mail are still considered important tools to communicate with customers. In fact, across the board, all marketing channels – new and old – are seen as becoming more important. This points to why marketers are finding the whole concept of multichannel marketing more difficult to manage. They are faced with the twin challenges of ensuring that mobile activity is integrated effectively with more traditional channels and that data from multiple sources is meaningfully combined. 4 Mobile Marketing in China While the research shows that marketers are becoming increasingly savvy about how they collect data, there is still work to be done in this area. China’s massive population and high take-up of smartphones means marketers need ways to sift through vast amounts of data to identify consumer insights and behaviours that will add value to future campaigns. As the success stories show, mobile marketing can deliver positive returns when used correctly. With marketers in China set to extend their mobile marketing into new channels – and thus take steps towards creating a 360 degree view of consumers – the future is certain to show more robust and effective campaigns being implemented. Research Results In with the old and in with the new: an increasingly complex marketing environment Mobile marketing is a fast evolving channel in an already complicated and cluttered marketing environment. In fact, it’s growing so fast that it presents the biggest change in marketing. The good news is that mobile presents incredible opportunities for businesses large and small to engage more effectively with consumers. The challenge is that it presents another channel that marketers need to incorporate into the mix – without necessarily expanding their overall budgets. These research findings are interesting. According to Experian’s observations of the market, SMS is the king of communications in China. SMS is all about delivering short, simple calls to action that drive foot traffic and e-commerce, and its immediacy and effectiveness at reaching large groups of people override the cost factor. One might expect that, as new and exciting marketing channels enter the mix, old ways of connecting with customers would become defunct in a case of ‘out with the old, in with the new.’ Local brands understand the power of SMS, and use it to great advantage. Yet many western brands are hesitant to use the tactic – despite it being the most powerful way to communicate with Chinese consumers. However, the Experian research shows that almost all marketing mediums are seen as equally or more important than they were last year. With email, on the other hand, the trend is flipped. It is used more heavily by western brands based in China, who are familiar with its power and reach as a communications tool. However, these western brands are now starting to take the lead from local brands and are using SMS campaigns. When it comes to either tactic, marketers need to personalise, incentivise and target their communications to effectively engage consumers. Naturally, digital channels are increasing in importance, with more than half (58%) of respondents indicating that SMS is more important than it was 12 months ago and 49% indicating that email is more important. Figure 2: C hannels ranked in order of importance for organisations as a method for communicating with customers, with 1 being the most important and 10 the least important. Channel 5 1 2 3 4 5 6 7 8 9 10 Direct mail 41.5% 13.0% 11.1% 9.5% 7.0% 5.4% 3.5% 3.5% 1.6% 4.1% Social media 3.5% 5.8% 5.1% 7.1% 12.2% 13.5% 14.7% 14.4% 11.5% 12.2% Email 6.8% 14.6% 12.6% 18.4% 14.2% 8.4% 8.1% 7.8% 6.8% 2.3% Face-to-face 4.2% 7.7% 9.9% 11.2% 15.1% 9.3% 12.8% 14.4% 9.6% 5.8% SMS 29.0% 21.5% 10.4% 8.8% 6.3% 6.6% 3.5% 4.7% 3.5% 5.7% MMS 1.0% 3.8% 8.6% 8.0% 8.9% 15.7% 9.9% 14.4% 20.1% 9.6% Website 2.0% 2.0% 2.0% 2.3% 5.2% 9.5% 13.7% 11.4% 21.2% 30.7% Phone 8.3% 10.5% 14.3% 15.3% 11.1% 9.6% 13.7% 9.6% 3.5% 4.1% Traditional advertising (radio, TV and print) 4.1% 15.2% 17.7% 11.7% 11.1% 9.5% 7.3% 8.5% 10.1% 4.7% Online advertising 1.6% 7.4% 9.7% 8.4% 8.7% 12.3% 12.3% 10.3% 11.00% 18.4% Mobile Marketing in China In with the old and in with the new: an increasingly complex marketing environment As well as these digital channels, many traditional channels are also becoming more important to marketers. Compared to 12 months ago, 67% of marketers believe that direct mail is more important; 58% say that phone contact is more important; and 44% think traditional advertising is more important. The most popular marketing channels When asked to rate the top three most important marketing channels, direct mail emerges as the most popular. Sixtysix per cent of marketers include direct mail in the mix – indicating that this tried and tested method of engaging with customers is not going to disappear any time soon. There is a prestige element to direct mail that luxury brands and real estate agencies certainly align themselves with – investing in a quality piece of direct mail is seen as being noteworthy and value-adding in these highly competitive markets. Unsurprisingly, SMS comes in second, rated by 61% of marketers as a top-three channel, and email is favoured by 34% of marketers. Clearly, it’s a case of ‘in with the old and in with the new.’ Is this mix of old and new a challenge for marketers, or an opportunity? Changing consumer behaviours present great opportunities for marketers to connect online and offline activities – or the ‘old’ and the ‘new’ ways of communicating with consumers. Consumers are also increasingly using mobile phones to seek out store locations and perform comparison shopping. Clever companies draw on this trend and use mobile marketing as a way to drive customers in-store or online for increased sales. Some of China’s biggest brands and retailers are using mobile marketing and m-commerce to achieve stunning results and are really changing the retail landscape. Supermarket cosmetics brand, L’Oreal has managed to secure a greater share of the market in 2012. This has been achieved by leveraging m-commerce tactics and offering price flexibility that encourage shoppers to price compare in-store on their mobile. As a result, the brand has increased both online and offline sales. Clearly, the blend of mobile and traditional channels can be a powerful combination for determined marketers. Yet, in an increasingly complex marketing environment, consumers are empowered like never before and are calling the shots in terms of how and when they engage with brands. With this in mind, the mobile channel presents a great opportunity for marketers to boost the effectiveness of their broader campaigns – while bearing in mind that mobile alone is not the panacea for communicating with customers. Figure 3: How far has your company progressed in terms of mobile marketing? This is not part of our marketing plan (7%) Discussing the idea internally, but no action has been taken (26%) Have a strategy or are forming a strategy but no implementation has taken place (31%) Have implemented one mobile or SMS campaign to test success (20%) Have implemented a successful campaign(s) and have incorporated mobile as a regular marketing channel (16%) 6 Mobile Marketing in China Welcome to the mobile era: marketers are clearly confident about mobile marketing’s future In the major cities and across the vast countryside, the Chinese population has embraced the mobile era. For many, the mobile web is the only web; and apps are potentially opening the door to even more engagement. Marketers acknowledge this changing consumer behaviour and plan to leverage the mobile channel subsequently. The Experian Marketing Services research shows that nine out of ten marketers realise the increasing importance of mobile marketing. Thirty six per cent of marketers strongly agree and 56% agree that mobile will be one of the most important ways for a brand to engage with their customers in the next two to three years. Yet, the findings show less than half of marketers in China are putting mobile marketing campaigns to use. Only 16% have incorporated mobile as a regular marketing channel; while 21% have implemented one campaign to test the waters. A further 31% have developed a strategy but have not yet implemented it. This shows that there is still some way to go for marketers in China. The minority is yet to embrace mobile, one quarter discussing the idea internally and there are only 7% indicating that mobile is not part of their marketing plan. For those that have started using mobile tactics as part of their broader marketing strategy, the investment is clearly paying off. The research shows that 34% of marketers who do use mobile currently receive 11-25% of their sales via mobile devices, and 27% receive between 26-50% of their sales via this channel. These results are interesting, particularly when compared to Hong Kong. In Hong Kong, 65% of marketers have implemented one or more mobile campaigns (compared to just 37% in China), and yet have similar results when it comes to mobile sales. If marketers in China are much less likely to use mobile marketing, then why are their sales from mobile devices just as high as Hong Kong? It may be that Chinese consumers are much more comfortable with e-commerce than Hong Kong consumers, who prefer to head in-store to get the best deal. It may also be explained by the fact that Chinese consumers are more likely to browse the web on their mobile than their laptops, so m-commerce has more impact than e-commerce. 7 Mobile Marketing in China Looking ahead, eight out of ten marketers believe that their company’s sales made through mobile devices will grow in the next year, with 21% expecting sales via mobile to significantly increase and 63% expecting they will increase. Longer term, 59% expect to see a significant increase over the next five years. Given this expectation that mobile devices will become an extension of the in-store cash register, marketers are allocating more of their budgets to the mobile channel. More than half (54%) are investing significantly more in mobile channels than they were 12 months ago. The good news for those who are yet to implement a mobile strategy is that almost nine out of ten marketers agree that mobile marketing works. The Experian Marketing Services research shows that, of those who have implemented a mobile marketing strategy, 24% rated their most recent mobile campaign as very effective and a further 61% rated it as effective. These very strong results clearly point to the effectiveness of the channel in reaching and engaging with consumers. With so many marketers at a tipping point – ready and willing to embrace mobile but yet to implement a strategy – it is clear that China is on the cusp of a mobile marketing revolution. The 330 million smartphones are there, the consumers are ready… all it takes now is action by marketers to start implementing mobile tactics. In this calm before the mobile storm, the question is, are marketers investing in the right places, implementing the right mobile tactics, and ensuring that mobile supports and complements other marketing strategies? Testing the waters: a range of mobile marketing tactics are in play We’re seeing significant testing and execution of a number of different mobile marketing tactics, but the research shows that gaps still exist. Over the next 12 months, marketers plan to fill these gaps with more varied mobile tactics. Marketers are clearly keen to experiment with different mobile tactics in China – undeterred by the ever-evolving and growing number of mobile tools available. The full range of tactics are in play, in differing degrees: mobile-optimised websites, m-Commerce, QR codes, location-based mobile services, SMS and MMS campaigns, mobile-optimised email, custom apps, in-app ads and mobile barcodes. Yet some are far more popular than others. The most common tactics in use are SMS campaigns (with 71% of marketers using this tactic), m-commerce (64%) and mobile-optimised websites (60%). As earlier sections of this whitepaper noted, SMS is king in China. Consumers willingly receive marketing SMS and accept them as a part of daily life. These often offer-rich messages are particularly popular in industries such as telecommunications, where the local telecommunication providers fight hard for customer loyalty. In the SMS space, the telecommunication providers do a lot of marketing to their existing customer base with special offers in a bid to retain them; and they often partner with retail brands to capture new customers and drive loyalty with existing customers. It comes as little surprise that the mobile phone number is the predominant piece of consumer data that is collected in China, far surpassing email addresses. Marketers know that the likelihood that an email will go straight to the junk folder is very high, yet an SMS or MMS is likely to be seen by the consumer. Some banks in China are using MMS to send regular newsletters embedded with rich media, coupons and vouchers to customers. For example, the credit card centre of CITIC Bank and Bank of China regularly send MMS-based day-to-day financial tips and merchant partner coupons to selected premium clients. This is done to drive loyalty amongst the customer base. China Merchant Bank has integrated its account changes and billing information into WeChat, the latest mobile application to enhance interaction with customers. Around the world, 98% of MMS and SMS are opened within 10 minutes of being sent and provide marketers with a greater degree of reliability when compared to channels like email4. Experian is seeing that cross-channel marketing via mobile – with real-time triggers based on consumer activity – is very effective. Mobile is the only channel that maps directly to a unique user, following them everywhere, at all times. Based on context and location, an SMS can be used to engage the consumer and support their needs. For example, marketers can exploit the interruptive nature of SMS to grab the consumer’s attention and create real value. Consumers respond positively to brands who communicate the right messages via the right channels at the right time. This geo-targeting is most effective in China’s tier one cities, where there is great opportunity to drive local consumers in-store to purchase. In smaller cities and remote areas, geotargeting is still relevant yet in a different way – e-commerce vendors can identify those consumers that live outside the tier one cities and drive them to their online stores. 4 “ Why SMS Marketing is Still Relevant in 2012”, Last edited 12 June 2012, http://blog.textanywhere.net/post/2012/06/12/Why-SMS-Marketing-Is-Still-Relevant-In-2012.aspx 8 Mobile Marketing in China Testing the waters: a range of mobile marketing tactics are in play Figure 4: W hat mobile marketing tactics does your organisation currently use? Tactics Rounded Percentage Rank SMS campaigns (campaigns utilising mobile text messages) 71% 1 m-Commerce (sales transactions conducted through mobile devices) 65% 2 Mobile-optimised website (tailored version or section of your site specifically enriched for mobile browsers) 60% 3 QR codes (Barcodes specifically designed for mobile readers allowing consumers to directly access online content or offers) 51% 4 In-app ads (advertising within mobile phone applications) 44% 5 MMS campaigns (campaigns utilising mobile multimedia messages) 42% 6 Email marketing optimised for mobile (emails optimised for mobile viewing/browsers) 35% 7 Custom apps (custom created mobile phone applications) 32% 8 Location-based mobile services (mobile content based on the location of the customer) 30% 9 Mobile tickets or barcodes (Barcodes or offers tailored for customers and provided via mobile devices) 23% 10 Do not currently use any of these tactics 1% 11 The effects of the mobile marketing tactics listed above are clearly positive. Of those that use SMS, 27% rate it as very effective; for m-commerce, 58% rate it as very effective; and for mobile-optimised websites, 61% rate it as very effective. Across all of the tactics currently in use, only a very small percentage of marketers rated the tactics they use as ineffective. In the coming year, marketers plan to start leveraging more and more tactics. The top three tactics likely to be implemented by marketers in China in the next 12 months include custom apps (52%), mobile tickets/barcodes (51%) and email campaigns optimised for mobile (50%). The focus on in-app ads is a nod to the growing prevalence of tablets – particularly the Samsung Galaxy – in China. Advertising has never really worked on mobile phone devices, given the lack of on-screen real estate and the fact that a single ad can adversely affect the user experience. On tablets, however, there is more space for in-app ads to slide into the picture without being too disruptive to the user. Tablets give advertisers more real estate to play with, and a great opportunity to connect directly with individual consumers. 5 “ Tim Cook: China will be Apple’s top market”, Last edited 11 January 2013, http://money.cnn.com/2013/01/11/technology/china-tim-cook-apple/index.html 9 Mobile Marketing in China Vouchers, coupons, barcodes and mobile tickets provide a real opportunity for marketers to engage with customers who are seeking better deals in store, and with the new passbook functionality incorporated into smartphones such as the iPhone 5, this form of mobile marketing is expected to dramatically expand. This is further supported by Apple CEO Tim Cook’s prediction that China will be the company’s largest market in the next few years.5 With the growing mobile penetration and the high usage of social network sites, Experian predicts that engaging with consumers via social media on mobile devices will increase in the coming years. One example of this is Weibo, which is used by 22% of the population and has twice as many users as Twitter. However, Experian cautions that consumers aren’t always positively receptive to being engaged on social networking sites. Similarly to other countries, consumers see social networking as a place to create and hold authentic relationships, a place where they call the shots, and they start the conversation (if at all) with brands. In this ‘chatbased’ environment, it is very difficult for brands to make the first move without offending consumers. Testing the waters: a range of mobile marketing tactics are in play To leverage social media channels on mobile devices, marketers in China may look to a permission-based approach, where consumers ‘opt-in’ and openly invite a brand to communicate with them. This path is proving to be one of the most effective ways to build relationships on social media channels. One tactic that falls outside the ‘top three’ yet warrants attention is QR codes. In China, at least half (51%) of marketers who have embraced mobile are using this tactic. This is in response to consumer demand – Experian is seeing that consumers want more deals with barcodes. Yet how mature are the QR code strategies in play? Most brands in China are only using a very simplistic form of QR codes to send information, not deals – so the effort that it takes for the consumer to use a QR code doesn’t pay off. Driving the bottom line Promisingly, the majority of marketers recognise the power of mobile marketing to drive sales both online and offline, with 67% reporting that this dual effect is their primary objective for using mobile strategies. Only 20% state their primary objective is to drive only online sales, and 11% to drive only offline sales. 6 “ The Mobile Movement Study”, Last viewed 31 January 2013, http://www.thinkwithgoogle.com/insights/library/studies/the-mobile-movement/ 10 Mobile Marketing in China These results are on par with global trends when it comes to using mobile devices. Around the world, 67% of consumers research a product on their smartphone before buying in-store; 23% research on a smartphone, head in-store to check out the product and then purchase online; 16% research on smartphone, visit the store and then purchase on smartphone; while 9% visit the store first, then purchase on a smartphone6. It’s a very mixed bag, incorporating many channels – and the purchase process clearly relies on the smartphone at various stages. Given the research results, we can expect an explosion of mobile tactics to enter the marketplace in the next 12 months. Yet marketers need to be wary of introducing mobile for the sake of it, or of adopting a ‘scattergun’ approach whereby the tactics and tools they use are not integrated with other channels. It is critical to determine if mobile is the right channel – both for the business and the customer – before working out which mobile tactics will best deliver individualised and tailored mobile experiences that support both online and offline sales. Major barriers: many marketers lack multichannel strategy, deep expertise and senior support There is no shortage of mobile service companies and advertising agencies in China. Yet, as with the adoption of any new channel, organisations face their own internal barriers to adoption. According to the research, the three biggest barriers to mobile marketing are a lack of a multichannel marketing strategy (51%), a lack of in-house expertise or resources to implement tactics (cited by 49% of respondents), and a lack of senior support (34%). These barriers are closely followed by ROI, which 31% of marketers believe is holding them back. The whole question of attribution and ROI has become incredibly complex in the multichannel marketing world, and there is a lack of clarity around ROI in the marketing arena as a whole. It is becoming too difficult to attribute just one part of a conversation with a customer to a sale. Instead of taking a channel attribution approach to ROI, marketers have to look at it from the campaign level and measure how effective a campaign was in improving sales. In terms of main barrier cited by marketers – a lack of a multichannel marketing strategy – many organisations lack the in-depth understanding of how to integrate mobile campaigns with other channels, or of how to strategically model a comprehensive multichannel campaign. Faced with an incredibly complex and fragmented marketing environment – which incorporates all manner of channels, online and offline – marketers need proven ways to collect and analyse the data from these disparate channels. Beyond this analysis, they need to ensure that the channels are operating in synergy and, most importantly, connect with consumers in ways that work. This ties in with the second barrier – a lack of in-house expertise – and a general skills shortage in the China market. While there are people in the industry with plenty of experience, there is not enough to meet demand, particularly in key areas of segmentation and targeted analytics. This helps to explain why a ‘bulk send’ mentality still prevails with SMS, rather than targeted messages to particular consumer groups. 11 Mobile Marketing in China When it comes to senior support for mobile marketing, despite 34% citing that a lack of support is a barrier, it appears that many senior teams are aware of the value that mobile offers. According to the research, 19% of marketers think their senior teams have advanced understanding of the value of mobile marketing, and 56% think they have intermediate understanding. Senior managers understand that consumers and brands are increasingly interacting through mobile; and they acknowledge the incontrovertible truth that if this is not being done now, it will be in the future. Yet they demonstrate a somewhat one-dimensional understanding, and are yet to fully comprehend how to realise true value through specific mobile marketing implementation. This creates a barrier and makes them more reluctant to commit more marketing budget to mobile. On a positive note, nine out of ten marketers in China believe that mobile is the way forward for engaging with consumers. Clearly, the barriers cited above are not enough to stop marketers from embracing the mobile channel. However, once a mobile marketing strategy is in place, a number of challenges do arise. Major challenges: lack of insight into how best to integrate with other channels Once marketers overcome the barriers to mobile adoption and get to work in implementing a strategy, they must do so by integrating mobile with all other offline and online channels. Easier said than done. The good news is that Chinese marketers are confident about collecting meaningful data from mobile campaigns. Almost all marketers (92%) collect mobile data as part of their wider customer data strategy and obtain permission separately from other channels, allowing consumers to choose whether or not they receive mobile marketing messages. With all this data at their fingertips, marketers are in a great position to develop and execute successful mobile campaigns. However, multichannel coordination – ensuring that campaign themes and messages are integrated and consistent across all channels – remains a major challenge, with 34% citing this as the biggest difficulty of the past 12 months. Seventeen per cent believe that ensuring that the right messages reach the right audiences through effective targeting profiles is the major challenge, and 13% state that combining the data captured through online and offline sources is the major challenge. Clearly, the whole question of multichannel marketing is a burning issue – extending beyond the mobile realm. These marketers are concerned with how to use data across channels to inform strategies, and how to implement campaigns across channels to achieve stated business objectives. What with so many channels in the mix, it is becoming more difficult for marketers to obtain a clear picture of their customers. A 360 degree view is needed to measure the success of all customer touch points and align individual channels for across-the-board gains. This provides a full snapshot of what a single customer looks like and a history of the interactions and transactions with the brand. Yet it can be difficult to achieve, particularly given that many companies collect consumer data from channels in very fragmented ways. Mobile phone numbers, email addresses and social IDs are often recorded as disparate items in the database, with consumers having separate entries for each item. Brands have to retrospectively ‘mine data’, matching and cleansing it. 12 Mobile Marketing in China Lacking a 360 degree view, marketers run the risk of implementing a fragmented strategy – over-communicating, under-communicating, or sending the wrong message at the wrong time. However, Experian is witnessing a profound paradigm shift within the industry, as the more forwardthinking organisations reframe the debate in terms of the ‘current customer view’. Instead of collecting every piece of information about a customer and building a single, physical data repository, a ‘current customer view’ leaves data assets in the source systems and then uses technology to gather real-time information about that customer. This information is then used to inform a marketing decision and execute a campaign that is highly targeted and relevant to that individual. Overall, whether you have a current customer view or a real-time customer view, knowing who the consumer is and what they want will effectively inform marketing plans. Where does mobile marketing fit into this multichannel mix? As all the research shows, it fits in many ways – and is almost a multichannel realm in its own right, with so many other channels converging on it. To overcome the challenges, marketers need the tools and know-how to both implement mobile marketing strategies and align these strategies with all other channels. Summary Consumers in China are demanding more from their mobiles. This gives marketers an incredibly rich playground in which to launch new campaigns and ongoing engagement strategies. It presents an opportunity to start a new dialogue, open the door to more sales, and build loyalty. With Chinese consumers embracing the mobile era, marketers have a great opportunity to innovate and explore new ways to engage. Many marketers are already acting upon this trend, acknowledging that the consumer now calls the shots and uses their phone as search engine, GPS and more – choosing what tools they want to use, and when. However, some marketers are still struggling in the face of an increasingly cluttered and complex marketing environment in which new and old tools compete for customers’ attention. How to integrate mobile with established channels remains a burning issue – particularly because the mobile space is harder to define and grasp, and marketers lack the analytical skills and resources to get mobile off the ground. Marketers need insights and knowledge about how to successfully implement multichannel campaigns, and how to identify which channels are most effective in reaching and engaging with particular individuals. Fortunately, this whole notion of engaging with individuals is what mobile marketing is all about. 13 Mobile Marketing in China Whether it is a luxury brand seeking more effective ways to reach discerning buyers and drive them in-store to secure a sale, or a behemoth e-tailer like Taobao seeking to improve and enhance the mobile shopping experience, virtually every business in China can leverage the mobile channel for business gain. And they can really start to utilise and analyse the data they have available to deliver highly individualised and tailored experiences that secure even better results. Today, it’s about starting – and maintaining – a meaningful dialogue with consumers. It’s about ‘pull’ marketing, where marketers use rich data and insights to provide individual consumers with tailored experience based on their unique needs. Given the everyday consumer’s attachment to his or her mobile device, the mobile space is the ideal arena in which this can occur. Top tips for making the most of your mobile journey 1 State your goals 4 Target best practice Take a top-down approach starting with your business goals and what you want to achieve across all channels. Clearly define your objectives and get a clear picture of how mobile fits within this crosschannel strategy. While large scale distribution may have its place in reaching a huge customer base, being able to target effectively is more important. Know who your consumers are, and where they are, and target them accordingly. Continue to analyse this information to see if your mobile strategy is working. 2 Think multichannel Smartphones are changing the consumer landscape. The number of IDs that converge on a smartphone give marketers new opportunities to optimise all channels for where they converge. 3 Devise a data strategy Data – and its supporting strategy – is still untidy. You need to clean up your data and build a strong strategy for the collection and storage of mobile phone numbers, email addresses and other consumer insights. 14 Mobile Marketing in China 5 Make m-Commerce easier Many brands are having successes with m-commerce. You can make it easy for consumers to buy on a mobile device by streamlining the check-out process and reducing the number of clicks to purchase. Research Methodology Experian Marketing Services commissioned independent research amongst 321 marketing professionals in B2B and B2C environments from a wide range of industries, including retail, financial services, telecommunications across China. The findings were used to develop this industry whitepaper on mobile marketing in China. Yi Bai Li Information Technology (Beijing) Co. Ltd. Yi Bai Li Information Technology (Shanghai) Co. Ltd. 12th Floor, Tower C, Oriental Media Center 4 Guanghua Rd Chaoyang District Beijing 100026, P.R.C. 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