Making The Smart Call
Published Dawn, Aurora Magazine, August 2007
by Umair Mohsin
Companies spend Billions of Rupees every year marketing their products and services to potential customers in order to drive sales and grow brand awareness. Yet in today’s multichannel age, there is a plethora of ways to reach these audiences and though marketers are becoming increasingly inventive with the way they communicate with their customers, media proliferation has become a double-edged sword, and is now one of the biggest challenges they face.
Since the early 1990s there has been more than a 3000% increase in the number of TV channels, more than 1200% increase in commercial radio stations, and there are 40% more magazine titles. Whereas once mass audiences could be reached through a small number of channels, now they are fragmented over a large and increasing number of media, making it more and more difficult to engage with the people you want to reach.
With the recent advent of next-generation phones, however, now we are rapidly getting to the point where the single most important medium that people have is their wireless device. It’s with them every single moment of the day. No longer are they devices merely for phone calls and text messaging but portals that consumers can use to communicate, gather information, be entertained and organise their lives. But despite the fact that mobile phone ownership now considerably outnumbers landline usage (5.18 Million Landlines)[1], it has been overlooked, and particularly undervalued, as an opportunity for interaction between a brand and its customers.
There is no doubt that mobile marketing is coming of age. A casual survey of the advertising trends of major companies reveals that brand marketers are recognizing the increasing importance of the medium and integrating it more into their campaigns.
“The proliferation of telecom providers and easily affordable cellular phone technology in Pakistan has led to extremely high growth in the usage of cell phones by a general cross-section of the population, regardless of socio-economic barriers, gender, age, etc. Particularly amongst the youth and young adults, text SMS usage has grown exponentially. To take advantage of this new and highly popular medium of communication amongst our target market, we have successfully used it in our campaigns. This is not the first time any institution has attempted a marketing activity of this nature, and we fully expect an increasing number of institutions to explore this medium as well”, said a Brand Manager who asked not to be named.
To date however only Text ‘n’ win has been the application embraced enthusiastically by agencies. One reason for that is that not only do you not have to deal with sackloads of postal mail, you also don’t have the post-campaign data entry issues. Customers, just by entering the competition, are giving you some of their data – i.e. their mobile number. It’s up to you to collect any more data from the consumer if you need it.
For the uninitiated, a text ‘n’ win promotion is one which is usually advertised on a pack of a product, and the customer is invited to text in a shortcode for a chance to win a prize. This is a very convenient way to manage a competition or prize draw, and is popular with consumers. The recent underneath the lid promotion by Walls to text to win attractive prizes and can claim to be the biggest ever text ‘n’ win promotion to date. Underneath the lid of every Cornetto cone was a short unique code (printed at the time of production). This code is only visible once someone buys the cone, removes the wrapper, and flips the lid. Wall’s offered its consumers the opportunity to avail attractive prizes by simply texting this code to a pre-defined number using SMS (from any telecom network). Winners were contacted via same channel (i.e. SMS) to communicate the details of their prize and how to redeem it.
However, in terms of taking advantage of the full potential of mobile marketing, Pakistani marketers have barely scratched the surface. Mobile marketing is more than just things like text voting, text ‘n’ win or getting raw content like branded ringtones. What’s in its scope is brand advocacy, loyalty CRM, subscription, the areas where brands have traditionally used other channels and with our current array of mobile data services available, from text and picture messaging to direct response, Mobile IVR, promotion and mobile Internet, and the extent to which these can be applied, the future is simply incredible.
One big advantage which mobile marketing has is that it not only targets the consumer directly [100% targeted] as people never leave home without their mobile phones and rarely switch them off, but also achieves a high level of interaction as it creates a personalised, one to one relationship between a brand and a consumer. But even with all these advantages there is still some way to go before marketers are in a position where they will consider the mobile as a key part of their marketing mix.
So why, with an almost 37.58 Mobile Density Rate (58 Million Connections)[2], without factoring in WOM, a market growing at a projected 150% a year (1.5 million phones per month)[3] and with the mobile phone increasingly being seen as the centre of integrated communication for everyone by 2010 globally, has there not yet been massive take-up?
One of the reasons cited for this has been the technology (or lack of) & infrastructure. MNOs are only properly covering the big cities right now. The bigger population is still in small areas, where coverage is spotty. The networks have to grow and the boosters will have to work at that level where you’ll be able to cover the entire market before the uptake. Screen size and the bandwidth availability have also been cited as potential limiters.
The major problem however lies with pre-existing notions that advertising professionals (both clients and agency) bring to the medium. This is by far the biggest issue most marketers face with mobile – just trying to understand what it can do.
“We are at an absolute infancy with this medium and that too because we’re scared of it. It takes a lot of convincing & guts at senior levels to make this work”, said Faraz Khan, VP, HBL.
“Trying to innovate amongst people in ad agencies is always difficult, because they are always sceptical of new channels mostly because they do not know how to create and conceive into that channel. Up until now, mobile has still been spooky for them, but that is starting to change”, said Zakaullah Khan, Creative Manager, Prestige Communications.
“We have seen so many people who want to treat mobile the same as other medium, thereby missing the great opportunities mobile has by virtue of being different. The mobile medium has a personality of its own, but the first mistake people are making with mobile is to say: “Lets do the same thing, ‘in mobile’. In truth, to make the most out of mobile as a channel for marketing, we need to take advantage of the things that mobile does differently, and we need to embrace the fact that mobile has its own personality that brings the most value when it is understood and respected. Forcing mobile to perform under the same rules that all the other channels operate under limits the value and capabilities of this highly personal form of communication”, said Ehmer Kirmani, CEO Media IDeé.
Thus, starting your mobile campaign with the idea of replicating mass direct mail is all wrong. Yet even a relatively cursory look with a point of innovating on the existing marketing tools out there can soon reveal the real opportunities. Every day, marketers are running direct response fulfilment campaigns (Call for brochures, Call backs), content (through alerts), discounting/ couponing programmes that deliver customer advantages or even sales promotion programmes, all of which can benefit using the mobile medium. All of these play to the ‘always with you and always on’ strength of the medium.
Marketing Case Studies
There are two criteria for measuring the efficacy of any channel. Reach & Affordability – the efficacy and the quantification of the impact. As compared to other mediums, mobile communication is a very cost effective way of marketing and is fast becoming a very strong Sales Activation Channel. Moreso when its tied in to CRM centres. This was demonstrated clearly by a recent HBL Car Financing campaigns. Instead of mass SMSs, the campaign targeted specific demographics, with a simple Y/ N question / response. They got a response rate from the campaign of 25% and the net additional sales translated into a total Cost Per Acquisition (CPA) of only 30-40 Paisas each. As compared to other mediums, this clearly highlighted this medium’s biggest selling point. The marginal revenues were immediately identifiable.
“With intelligent application and targeting, such SMS messaging can enhance a brand, and produce great results. Furthermore, it is cost-effective, measurable and intuitive: lifestyle data in particular has a wealth of additional variables, because the way in which the information has been volunteered allows for the fine-tuning of campaign targeting like no other data can.”, said Faraz Khan, VP, HBL.
Another interesting case has been presented by The Muzik. They have successfully used the mobile phone as a Credibility Enhancement tool. The prime prospects of the channels are the youth, looking for freedom of expression, entertainment value, subtle and wild experiences. They want a dialogue with the world. The Muzik used the medium to connect into the lives of their youth. Not only that but this tool has also developed into a penetration check and a measurement tool for all their content, which give a much better analysis than the current dairy measurement services.
According to Faisal Tamanna, GM-Business Development; The Musik, HBO, Nick and the person instrumental in bringing about this shift in paradigm, as far as best practices go simple formulas works.
“We’re entering into an unbelievable era because of the mobile phone. One day it’s not unimaginable to hold programs like Live Earth or Mega Events that span countries through the power of this medium”, said Tamanna. “The same practices that work with our existing mediums however, won’t work with this. This is why we have had to totally re-think how to develop our mobile medium. We’re looking at it to become the portal of the youth with customized content, personalized programming and even video on demand. These will be the applications of the future which will drive the growth of media consumption”.
Talking to Mr. Amin A. Rehman, Vice President, Cards Division at ARY, highlighted another area where the medium is being used successfully – As a form of Product Augmentation For The Sahulat Card. The Sahulat Card is a debit card, which consumers use on outlets like Ary Cash and Carry, Jewellery stores and third parties like merchants / brand partners.
“We’re linking into the technologies that can enhance ‘Sahulat’s’ offering to our consumers. E.g. we’re launching a 24 hour shopping channel with which Sahulat card members can call into or just send an SMS with a code to a number and their purchases will be delivered home. Sahulat card members can also purchase talking hours and their groceries through their mobile phones. But the biggest selling point is our ‘Value Back’ to customers. Our customers get free line rents, free talk time with our ‘ARY Connect’ mobile connection, entertainment through events like the recent Bhambore or Waahdi festivals and the chance for mega draws (1 KG gold everyday) & sales promotions. Mobile marketing has tremendously increased in the number of connections we make with our consumers, our awareness levels are higher, and we’ve found that people are receptive through the mobile concept more & more. That is why we have plans on furthering the multimedia side of mobiles and perhaps even more facilities on it for the customers. This is the future now.”
Mobile offers a new way to cut through in today’s cluttered media environment, combining the potential for precise targeting and the ability to extend a physical, tangible brand encounter into a digital and interactive one. The key to unlocking the real potential for customer recruitment lies in understanding more about them and having the ability to interact with them directly. Personal is a key concept in all things mobile. Analysis and careful selection can be carried out before broadcast, and afterwards, with detailed responder profiling. Over time, companies can build profiles of their customers, and subsequently target them for highly specific campaigns, generating real and significant lifetime value.
However, marketers need to weigh the benefits carefully against the potential to seriously harm people’s relationship with a brand. Unless contact is made in an acceptable fashion, the mobile advertiser runs the risk of significant consumer backlash.
First of all consent is a very important thing. It’s simply no good talking to customers who do not want to engage with you. In order for a marketing campaign to be effective, the people on the receiving end of it have to be open to the messages, and only permission-based marketing allows that to happen.
“One of the barriers to the emergence of the market is education, but though brand managers are fond of talking about consumer education, but I would shine a light on brand marketer education, around the personal nature of the medium, the need for opt-ins, the relevance of the message. It might sound high-minded, but as a practical matter, it requires marketers to change their behaviour, and this is not easy. They acknowledge, intellectually, the point, but struggle with executing it. I think those who live in fear of opt-outs are those who are not going about things in the right way.” said Sabeen Mahmud, COO, BITS.
“In comparison to how people manage mobile / SMS campaigns in our country, we’ve had far more success with our email lists, practicing what we preach. People have been signing up for our lists without any Push Marketing being involved and since all our subscribers have come through word of mouth and PR, their trust is higher. Secondly, when they share information about themselves, we give them an Enhanced Offering in return rather than the traditional trade promotion lines where they might feel they’re being sold too and put us on their blocked lists. The results so far have been incredible. Thus I’d say the impression you make with the medium counts and small things like the power to opt out anytime is empowering to the consumer.” said Sabeen.
The Future Role of MNOs
The mobile phone is about to go places. From Mobile TV and video to branded content downloads, the handset has become the focus for potential advertising revenue from the latest applications to hit the mobile market. This is nothing new. Such Value-Added-Services to mobile phones have been the great white hope of many mobile phone operators looking to offset the pressures of declining business from voice and text.
Incidentally one is sorely tempted to blame the mobile network operators for failing to embrace the change and working with agencies to take this medium forward. The operators have only ever been focused on their subscriber base and have seen third parties as a threat to their existing businesses. Much of the investment undertaken by the carriers has been in trying to build upon their ‘cool’ brand status, while retaining and growing their customer base.
Yet that ‘cool’ has become ‘boring’. The mobile phone is now just an essential part of our lives, and when you throw in the perceptions of the customer, the picture begins to look a little scary from the point of view of the MNO.
Customer service satisfaction levels across the network operators are low. That coupled with the news that Pakistan wants to setup its own Wi-Max networks (allowing low-cost VoIP calls and data access), and with churn (the average number of customers that leave a subscription service during a year) running at a guesstimate of 20% per year, even the most myopic telco is realizing that things are changing.
The single biggest driver for the churn is price, so people churn because they are tempted by a better deal, which means that if they MNO wants them to come back, they will do so at a lower ARPU (Average Revenue Per User) than when they left.
The way to arrest this process is by offering compelling services, and the most obvious one is partnering with third parties especially agencies to make compelling content – the new source of differentiation. For the marketers, they must take steps to understand this portal if they are going to incorporate it into their marketing campaigns. Indeed they can’t afford not to, as the small portable device that demands and gets so much attention from its users is a space that is not yet being effectively utilised by the advertising industry. Serving as a part of a balanced marketing plan, mobile advertising offers a medium whereby brands can achieve constant communication with consumers as and when they want to.
Conclusion
While all other marketing media seem to be feeling the squeeze through greater fragmentation of networks mobile marketing’s future looks rosy. There is an extraordinary and unprecedented opportunity for mobile marketing in the next few years, both in terms of the way consumers will receive commercial messages and in the way they will respond to them. This is going to be a pipeline for immediate, measurable and targeted communication and it’s bursting with potential and waiting to be exploited to the full. They say there is no idea as powerful as one whose time has come. Well Ring Ring! Wake up marketers, the mobile’s tone is sounding.
[2] Source: PTA, April 2007 Figures.
[3] Source: Dawn, June 27th, 2007 ‘Investment Trends Shifts From Banks To Telecom’.
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