The power of permission marketing is inextricably linked with its respect for personal preference and privacy. However, permission marketing is more than just another advertising approach. Thomas Husson, Principal Analyst at Forrester Research, explains why opt-in is a must and explores how mobile operators and advertisers can wring more value out of this inventory.
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Is there a need for permission-based mobile marketing models? Forrester Research thinks so. Its recent Q3 2010 European Technographics Media, Marketing and Social Computing Online Study found that 23 percent of respondents have received a text message that they did not want from a business. Read between the lines, and there is a very real need for approaches that ask people’s permission first, rather than just deliver intrusive spam.
Thomas is clear about the requirement for opt-in. “Mobile marketing has to be permission based,” he observes. Why? Because mobile is not “just another channel.” In his view, mobile has several “unique attributes” that demand companies take a more personal approach to mobile marketing, one that is aligned with our requirements for personal privacy and relevancy.
Intimacy, proximity immediacy
Specifically, mobile embodies “the notion of intimacy.” Put another way, mobile is “a personal device that has become an extension of ourselves.” This characteristic turns up the pressure on brands to interact with us after we have given them permission to do so. “Mobile [advertising] has to be permission-based so that it is not perceived as intrusive,” Thomas adds.
Mobile also enables context and the delivery of advertising linked to our proximity (what’s nearby). This is why location-linked advertising is so exciting and potentially so effective.
But there are rules to follow. “You have to give consumers control,” Thomas explains. “They have to choose the degree of personal information that they share.” Additionally, companies (brands, mobile operators, app developers – the works) also have to make it clear how third parties will use personally identitifiable information (PII).
Finally, mobile is immediate. It is there at the point of inspiration, allowing people to interact with brands at that precise moment. Mobile also allows the delivery of news and information when it matters most. What opportunities does this present brands and operators? Thomas sees an important connection between this characteristic of mobile and the goal of companies to increase the size of their opt-in databases.
Sure, some people will only ever be interested in incentives that include coupons and discounts (in return for their permission and personal information such as their hobbies and interests). But there is a large segment of people that would agree to receive advertising in return for hot news about people and events. “You can easily imagine that music fans would agree to receive marketing messages in return for exclusive information about music artists or festivals,” Thomas observes.
Re-positioning for more opportunity
As Thomas sees it, permission marketing is rising up to take a central spot in the mobile marketing mix, effectively “co-existing” with other formats out there (display, in-app, outdoor) and allowing brands to build an opt-in conversation into their mobile marketing approaches. “Mobile marketing is evolving and expanding….I’m sure we will see these approaches [from mobile] introduced into the more traditional forms of marketing.”
The result is a convergence of approaches, formats and strategies — all aimed at enabling customer engagement.
Where does mobile (and the mobile operator) fit in the scheme of things? Thomas offers an interesting assessment of the opportunities if we take a big-picture view.
Mobile operators do have a role to play. But this isn’t just about mobile marketing. “This is about their [operators'] long-term – and broader – positioning,” Thomas says. “It’s all about a long-term approach where operators are re-inventing themselves to be smart enablers. This way they can play a role with advertisers. But they can also play a role with other stakeholders in bridging the gap between consumers and brands.”
The good news: this transformation (and the rewards it brings) are all within reach provided mobile operators wield the assets already at their disposal. They have a “gold mine” of customer data. And they control trusted and popular payment mechanisms (a major plus now that mobile marketing increasingly includes commerce).
The bad news: there is a huge gap between operators and agencies/advertisers – and mobile operators generally lack the business agility to broker these relationships. “There are a couple people with the operators who really ‘get’ it,” Thomas observes. But this is not enough to overcome the relationship gap.
Data doesn’t match
To complicate matters, mobile operators understand segmentation as a tool to break their vast audiences down into segments apt to respond positively to service offers such as unlimited text messaging, all-you-can eat data tariffs, and friends and family voice call packages.
As a result, mobile operators have excellent reporting tools and regional data (allowing them to sell offers and tariffs to specific consumer groups). But they lack the segmentation information advertisers require to reach their target audience.
Put another way, the issue isn’t data collection; it’s the type of data mobile operators collect. “Operators have a lot of data mining and CRM tools, and they have lots of fields that they can fill with data, but it’s not necessarily consistent for across operators and not necessarily relevant to advertiser segmentation,” Thomas explains. “So I see a big challenge here…and operators will progressively need to invest to measure what is relevant for advertisers.”
Thomas recalls a discussion with one operator who bragged about having 200+ fields to segment subscribers. “At the end of the day, it’s about not providing 200 fields but rather the 5 or 10 fields that are consistently relevant and interoperable for advertisers,” he says. Getting there is going to require operators to partner — both with other operators and with enablers that can help them accomplish this complex task.
Segmentation and loyalty
Mobile marketing may have started out with a sharp focus on promotion and brand awareness, but the real value of mobile marketing may be in the customer relationships and interactions it enables between people and companies (brands, advertisers, mobile operators).
“It’s way beyond mobile marketing,” Thomas argues. “For mobile operators, it’s part of a longer-term positioning strategy to create more loyalty and generate more value for the customer.” In this scenario the value exchange centers on the delivery of relevant advertising. (Genuinely valuable because it is aligned with the stated preferences of opted-in consumers.)
Why should mobile operators see mobile marketing as a bigger strategy to boost loyalty and encourage engagement? Thomas points out that it’s the best way for them to get back in the game — and stay there. “Operators have been bypassed by the likes of Apple in terms of the customer relationship.” Permission marketing gives operators a place at the table.
Connect the dots, and harnessing permission marketing paves the way for deeper customer engagement that goes beyond mobile marketing, allowing operators and their ecosystems partners (brands, agencies, advertisers, application developers) to make sure what they offer (advertising , apps, etc) is relevant and valuable to their audience.
Mobile marketing is an excellent opportunity for mobile operators and brands — but it’s just the beginning. Loyalty, segmentation and mobile CRM are moving up the agenda, all business objectives where the ability to engage with people on an ongoing basis is a must. Permission is a big part of this because it ensures that people accept and likely respond positively to what they get (advertising, offers, deals, content, applications etc).
Now that we understand the value of an opted-in audience, companies across the ecosystem would do well to develop approaches that build on this awareness to add value throughout the entire customer lifecycle. Companies should also focus on the incentives they offer people to opt-in in the first place. As Thomas points out (and I agree!) it’s up to mobile operators and brands to use their insights and knowledge of customer segmentation to match the right people with the right incentives. For some it will be coupons, for others it will be exclusive information. Cracking the code will help operators grow the size of opt-in databases and significantly boost the business value of this inventory.