Pitching Consumer Goods by Mobile in the UK

The mobile advertising scene is changing in Europe, according to a study by comScore M:Metrix. Its August 2008 Benchmark report showed a sharp increase in European mobile ads for goods that previously had little exposure on the mobile channel, such as food, clothing and consumer electronics.

The ads in question used SMS, not a Web-based technology. But the survey showed that in the year to August 2008, food advertising on mobile phones grew 53%, while ads for clothing and fashion rose 38.2% and restaurant ads 37.3%. Overall, advertising for consumer goods and services on SMS was up 15.2%, while advertising for mobile products such as downloads and entertainment fell by 9.6%.
Consumer response rates were also excellent. For example, 15.5% of mobile owners who received an ad for a restaurant in the three months to August 2008 responded, and 12.6% of those who got offers for food, such as grocery coupons, did so.

UK advertisers are well-placed to take advantage of these trends.

Penetration of active mobile phone connections in the population stood at 122.6% at the end of 2007, according to Ofcom’s report, “The Communications Market 2008.” Fully 86% of UK adults ages 16 and over owned a mobile phone in Q1 2008, and access rates were even higher among children ages 12 to 15. In addition, more than 60% of children ages 8 to 11 polled by Ofcom owned or had access to a mobile phone.

The UK also boasts high rates of SMS text messaging. In 2007, the last complete year for which Ofcom measured this activity, SMS use was up 28% on the previous year, and an average of 68 texts were sent each month from every mobile connection in the UK.

Before the financial crisis, industry observers were convinced that the mobile Web, together with mobile online advertising, really was approaching liftoff. Now it seems unlikely that 2009 will see a big breakthrough in mobile. But advertisers can still learn how to engage with mobile subscribers. Those looking for ways to connect with key target audiences during the economic downturn, and drive direct consumer response while keeping a firm grip on marketing budgets, should compare the costs of online and mobile SMS campaigns, or the feasibility of combining more-traditional Internet ads with an SMS dimension.

Will Mobile Marketers Pony Up for Texts?

During the past few weeks there have been reports that Verizon Wireless may start charging $0.03 per outbound SMS message sent to its subscribers. That would double or triple the cost to marketers who send SMS text messages to their opted-in consumers who use Verizon.

Text messages are the biggest component of mobile message advertising, which will reach $4.5 billion in revenues in the US by 2012, from nearly $1.5 billion this year.

For its part, Verizon told The New York Times the company had not set any specific price for delivery of text messages or a date that any fee might go into effect.

Service providers have definitely been carrying more traffic on their networks as a result of texts. Americans sent 75 billion text messages in June 2008 alone, according to the Cellular Telecommunications & Internet Association—up from 29 billion in June 2007.

John du Pre Gauntt, senior analyst at eMarketer, said that carriers had some justification for wanting fees from marketers because otherwise they would have to pass full costs on to consumers—which would not serve either industry.

However, Mr. Gauntt said carriers should not just look at mobile marketers as another revenue stream to tout in earnings calls. “You milk the cow once it’s grown, not after it’s just been weaned,” he said.

“Carriers will likely start charging marketers for commercial texts at some point. But in the long run, it will be thought of as negotiating point, rather than a threat to the freedom of the mobile Web,” Mr. Gauntt concluded.

How Do Mobile Users Spend Their Time?

Texting tops the list.

Mobile users in the US are on their phones more than ever, talking, texting, watching videos and using the mobile Web.

Over one-half (54%) of mobile users surveyed in September 2008 by Azuki Systems said their usage had increased by more than 25% over the past two years. One-fifth said their usage had increased by 50% or more. One-third of respondents talked on their mobile phone more than 10 hours per week, and 34% of respondents ages 17 and under talked for more than 15 hours weekly.

But minutes of talk time became a commodity long ago, and mobile carriers—and the marketers who want to reach mobile customers—are looking to mobile data for new revenues.

The survey results should encourage them: Nearly four out of 10 mobile Internet users surfed the mobile Web for 2 or more hours every week. That number is likely to rise as smartphones continue to go mass market; 62% of mobile users surveyed said they either already owned or would own one within the next 12 months.
Nearly four out of five mobile users said they sent text messages from their phone, and 29% of those who did spent more than 2 hours every week on the activity.

The percentage of mobile users who told Azuki they sent text messages was even higher than results recorded by Nielsen Mobile in Q2 2008. Nielsen also found texting to be the most common mobile content activity, although it estimated that only 53% of mobile users engaged in SMS messaging.

Peering Inside a Mobile Phone Network

Have you ever wondered why your mobile phone can alert you to new voicemail without having ever rung? Or why a text message can get through when a call can't? Maybe you've traveled across continents and been amazed at how calls still manage to follow you? Or perhaps you've noticed that sometimes your battery only seems to last a fraction of its normal life? And why can the iPhone 3G figure out your location in 3 seconds when it takes takes your car GPS 3 minutes?

Although we normally take the ubiquitous mobile phone for granted; assuming it should work anywhere at any time, there's quite a bit of complex technology involved in sending a call to a device in your pocket. While we've all screamed in frustration over dropped calls and other annoyances, the truth is these are impressive devices, packed with amazing technology, that still hold a few tricks up their sleeves. And after you learn a little more about the inside of the system, maybe, just maybe, you'll be a little less irritated the next time you battle to make a simple call.