Mobile Marketing, Predictions for 2006

Mobile Marketing, Predictions for 2006


Barring any economic, political, environmental, or social catastrophe, 2006 is going to be a banner year for mobile marketing and mobile data services.  The following details seven predictions for 2006 and discusses their impact on the practice of mobile marketing.  These predictions are based on the recognition that while the key elements and innovations that impact a marketer’s ability to launch mobile services mature at different rates, enough of these elements have come together and aligned in recent years to create a stable foundation for marketers to successfully launch commercially viable mass-market, as well as niche market, mobile campaigns, and services. 

Seven Predictions for 2006

Prediction 1: The Baseline Plateau for Mass Market Mobile Services will Continue to Rise

We’re in a time where many of the technology, business, and social innovations from 25, 15, 5 years ago have diffused, converged and been put to productive use, especially in the area of mobile marketing.  Handset technology, mobile network interoperability, ubiquitous message delivery, broadband data, industry technology regulations, mobile marketing guidelines, and user adoption have all matured and reached a common plateau where commercially viable and cost-effective mobile marketing and data services can be launched.  These services include text messaging campaigns (quiz, votes, polls, contest entries), content downloads, instant voice response, community services, and mobile search which are ready to be offered to the mass market by brands, content, owners, and marketing agencies.  The figure below illustrates how these different key elements have formed a plateau to support nationwide, even worldwide, mass market mobile marketing programs.

Additional services, like mobile TV and video, interactive and 3d gaming, alternate billing services, and more, will certainly be viable in 2006; however, they will not be ready for mass market use by marketers.  These services will be niche market solutions.  The reason for this is that the general population will not have adopted the phones and the data plans that support these services, the networks will not be fully open to all players, nor will the standards, guidelines, and regulations be mature enough to help guide marketers in delivering them on a mass market scale.  However, as noted below, progress with these niche market services will continue to be made and the plateau supporting mass-market services will rise to support some of today’s niche market solutions and set the stage for a very interesting 2007.

Marketing Impact:  Marketers need to pay special attention to their market segments, understand what phones are in use and make sure the operator services subscribers have signed up for (e.g. SMS, data plans, picture messaging, etc.) to be able to determine if mass market or niche markets campaigns are appropriate for the targeted segment.

Prediction 2: Solidification of the Mobile Marketing Ecosystem in an Increasingly Borderless World

In 2006 we’ll see the solicitation of the mobile marketing ecosystem and increased specialization from focused players.  Unlike the mobile marketing entrants of the late 1990s and early 2000s companies don’t need to adopt a horizontal integration strategy and provide all steps within the value chain to successfully offer mobile marketing services. In 2006 we’ll see companies taking up a strategy of specialization, similar to how mBlox and Simplewire have focused solely on messaging aggregation.  We’ll see firms specialize and provide expertise in 1) marketing & promotion, 2) content & talent, or 3) technical execution and delivery.  Most firms will not handle all three, rather they’ll form strategic alliances to fill the missing gaps when delivering their solutions; however, with a few notable exceptions, a handful of firms will be able to successfully handle two out of the three roles.

The mobile marketing boutiques will help their clients craft mobile programs and select the right technology companies to partner with for campaign execution and delivery and possibly help source content. The content & talent firms will continue to leverage the valuable asset they have and develop new and exciting licensing and re-distribution agreements for their content so as to get it to market, and the technology firms will specialize in offering specific market segment applications and community services.  A few of these technology firms will rise to the top and successfully launch a platform that can be used to aggregate their own applications and those from other players within the industry.  In order to compete effectively these later, few will be global and will efficiently utilize their global resources and knowledge to effectively respond to local market needs.

Marketing Impact: Marketers will have a much clearer picture on who to work with within the various spheres of the ecosystem to successfully launch mobile programs.

Prediction 3: Regulations and Guidelines will Stabilize

We’ve seen tremendous regulatory and best practice guideline output from the wireless operators, industry associations, and governments over the last five years, including from UK’s ICSTIS, EU, US Congress, Mobile Marketing Association, Wireless Operators, and others.  The regulations and guidelines from government bodies and industry associations have been quite stable; however, the rules from the individual operators, especially in the United States, have been changing regularly as the operators grapple with the challenges of the opening of their networks while simultaneous protecting their customers from uninvited traffic.  In 2006 we’ll see the operators stabilize their business models and their rules will change less often and be clearer than they have been in the past. 

Marketing Impact: Significantly more mobile programs will be launched because the rules will be clearer to implement.

Prediction 4: Allocation of Marketing Budgets to Mobile

The industrial nations are approaching a saturation point with 70%+ of their populations subscribing to mobile services, including the United States (eMarketer reports that the United States will have 214 million subscribers, 71% of the population, in 2006), and with this marketers and agencies will take notice.  (Mobile Future 2005)  We’ll see more and more marketing dollars allocated to mobile services in 2006, with expenditures by brand and agencies on mobile advertising being redirected from traditional media budgets.  As Pearse reports, according to Coca-Cola’s marketing Manager James Eadie, “mobile marketing could be phenomenally important, when you look at the penetration of handsets and the passion the audience has for mobile…as a way of connection, it ought to be phenomenally powerful and more important than TV, and that should see spending 50% of our marketing budget within decades” (Pearse 2005). This will be just the beginning with even larger budgets allocated to mobile programs in the coming years as marketers educate themselves on how to leverage the channel and as the key elements empowering mobile services to continue to mature.  Furthermore, in the 4th quarter, there will be numerous planning sessions and budget allocations within the agencies to plan for 2007.

Marketing Impact: This is the year that mainstream marketers will take notice of mobile and launch programs.

Prediction 5: Proliferation of the mobile internet.

WAP is back.  WAP, or more aptly put the mobile internet, is just now emerging from Jackie Fenn’s “technology hype curve trough of disillusionment”.  The initial hype and overselling of the mobile internet and its capabilities in the late ‘90s and early ’00 almost killed the mobile internet, since the actual services being offered were oversold and did not meet customer expectations.  However, the industry has continued its efforts toward developing improved standards, such as WAP 2.0, XHTML, has launched new browsers, has increased network bandwidth, and more.  And, with more users signing up for data services we’ll see a re-emergence of the mobile internet.  These services will employ different commercial models, including free, pay-per-session, and subscription-based billing.  One simply needs to look at the numbers. Hanley recently found that 96% of college student has a mobile phone and are becoming much more receptive to the receipt of wireless ads (a method of mobile marketing); moreover, nearly 71% of them access the internet through their phone regularly for the purpose of downloading ringtones, and to a lesser extent games and images.  With this increased adoption, marketers and their technology partners will be compelled to offer intriguing mobile internet services, which, when marketed properly, will be taken up by users.

Marketing Impact: Marketers will have yet another tool to use for mass market programs, in addition to SMS, which is the most robust mass market solution in the market today.

Prediction 6: Increased Diffusion of New Value Added Services, like Mobile Search

We’ll see an increased diffusion of new value-added mobile services like text-based mobile search, community applications, instant voice response, alternative billing methods like credit card and Pay Pal, and the mobile internet as noted above, in 2006.  In addition, to a lesser extent, we’ll see the promotion of mobile TV, mobile video and related high-profile services in the popular media, as well as continued development on location-based services, presence, and instant messaging services, and alternate point of sale billing solutions; however, while these services will make technological gains, and unique target segments will adopt them, it will still be a while before they’re aligned with the other key mobile elements to be viable for the mass market.  This prediction is based on an understanding of technology diffusion as defined by Rogers.  Rogers, a leading theorist on innovation diffusion notes that for an innovative service to succeed it must have relative advantage over currently available services, be compatible with the consumer’s values and past experiences, not be overly complex to use or understand, and trialable and observable by the consumer, i.e. does the consumer see others using the service and can they experiment with it before they buy. (Rogers 2003)  The former services have met Rogers criteria for technological innovation to successfully diffuse within the market, while those later niche services have not.

Marketing Impact: It is still early, and marketers just entering into mobile are not that far behind. Unlike previous years where most marketers sat on the sidelines, 2006 will be the year for marketers to learn by doing and prepare themselves for the future.

Prediction 7: Hockey Stick Increase in Published Mobile Research

There will be a significant increase in academic research looking at many angles of the mobile services phenomenon published by reputable academic journals in 2006.  This prediction is based on the understanding that it takes time to produce a publishable paper. First, the field must be mature enough to pique the interest of researchers, who then must draft and get their research proposals accepted by funding bodies.  The research must then be planned, executed, written up, submitted, reviewed, edited, and accepted for publication, a process that takes years.  Most of this research will come out of Europe and Asia, but we will see many papers coming out of the United States as well.  Most research will be qualitative in nature, such as case studies designed to develop theories on how and why mobile services work and in what context; however, there will be a handful of useful quantitative studies coming out of Finland, Italy, and the United Kingdom, Korea, Japan, and similar countries with mature mobile markets. 

Marketing Impact: The industry will benefit greatly from these studies since they will shed light on consumer response paradigms, effective business and implementation strategies, and help set benchmarks for success.

The above are just a few predictions for 2006, and clearly, many more predictions can and are being made by other industry pundits.  In summary, we’ll see significant development in the key elements that drive mobile services.  We’ll see a stabilization of regulations & guidelines, as well as an increase in firms specializing and focusing on specific functions within the value chain and ecosystem.  Moreover, there will be ample research published, which marketers may leverage as they re-allocate and increase their budgets to launch mobile services.  Marketers should be prepared to make their own predictions.  To do this, marketers may leverage the Mobile Service Element Diffusion Map logic above and develop their own keen sense of what will and will not work with their target marketers and what they can and should do to make 2006 a great success.

References

Becker, M. (2003, October). A Marketer’s View of High-Tech. Retrieved 1/6/06, from MettaTech, Inc.: www.mettatech.com.

Fenn, J. (1995). Hype cycle for Emerging Technology. Gartner Group.

Hanley, M., Martinsen, J., & Pryor, L. (2005, November). College Cell Phone Advertising.

Mehta, N. (2005, 05/Dec.). Already on a Phone Screen Near You [Electronic version]. iMedia Connection..

Pearse, Justin. 2005      Coca-Cola Believes Mobile Ads Have Potential to Upstage TV. Electronic document. NWA.                          

The Mobile Future. eMarketer (2005, 20/Sept). .

Rogers, E. (2003). Diffusion of Innovations (5th ed.). New York: Free Press.

Credits: Image by Miguel Á. Padriñán from Pixabay

Managing Partner at | Website

Michael Becker is an intentionally recognized identity & personal information management solutions strategic advisor, speaker, entrepreneur, and academic. He advises companies on personal information economy business strategy, product development, business development, and sales & marketing strategies. He also represents them at leading trade groups, including the Mobile Ecosystem Forum. Michael is an advisor to Assurant, Predii, Privowny, and Phoji. He is the co-author of Mobile Marketing for Dummies and a number of other books and articles related to mobile marketing, identity, and personal information management. He is on the faculty of marketing of the Association of National Advertisers and National University. A serial entrepreneur, Michael founded Identity Praxis, co-founded mCordis and The Connected Marketer Institute, was a founding member of the Mobile Marketing Association (MMA), and was on the MMA board of directors for ten years and was MMA’s North American Managing Director for three years. In 2004, Michael co-founded iLoop Mobile, a leading messaging solutions provider. In 2014, Michael was awarded the 2014 Marketing EDGE Edward Mayer Education Leadership Award for his commitment to marketing education.

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