Mobile Marketing in 2013 and Beyond: Top 5 Trends, Opportunities and Challenges

By Deepak Kanakaraju in Mobile Marketing — Apr 30, 2013

Imagine a day in the distant future where marketers can directly communicate marketing messages in the form of “thoughts” into the minds of the target prospects. While such a day may never come, mobile marketing is the next best thing available to marketers.

People spend more time with mobiles than any other communication device available today and brands cannot afford to leave out mobile marketing in their digital marketing plan. According to eMarketer.com mobile advertising industry was a $4 billion dollar market in 2012, will touch $7 billion dollars by 2013 and will go all the way up to $11 billion dollars in 2014.

Just a while back we were talking about how digital marketing is growing faster than traditional marketing industry and now its mobile which is taking the hot seat. According to Forbes.com, the mobile market share within digital advertising market reached 11% in 2012 – up from 7% in 2011; which is a clear indication that mobile market is growing faster than the other digital marketing channels.

Soon it will be theoretically possible to connect with every human being on earth using the mobile network and in developing countries; there will be no other way to engage a large percentage of the prospects digitally other than mobile.

One of the big advantages of mobile marketing is that mobiles are personal to a single consumer. No two people will use the same mobile phone in 99.9% of the cases. With the exception of Email Marketing, all other marketing channels such as Display Ads, TV and Online Video Ads, Newspaper etc. do not target a single consumer but only a rough demographic with blurred boundaries.

Obviously people are using mobile phones for more than phone calls and SMS. But what are they using it for? HighTable.com had done a research and published the following data which shows the percentage of mobile users who use various features available in the mobile phones today.

Whether it is Mobile Display ads, in-app marketing, SMS marketing messages or email, there is a huge scope of reaching the audience while a mobile phone user is doing one of the above tasks. The mobile phone has upgraded itself and become a smart phone. Now marketers also need to evolve from just mobile marketers to smart mobile marketers; by thinking out of the box and adapting and utilizing the latest standards in mobile.

With that said, let us look at the hottest mobile marketing trends which are disrupting the traditional marketing industry. They are:

Mobile Responsive Email
Mobile Click-to-Call
Mobile Wallets
New Mobile Ad Formats
Showrooming

Let us take a deep dive into each mobile trend…

1. Mobile Responsive Email

As we can observe from the data above from HighTable.com, 40.8% of mobile phone users use mobile to read emails. In a report by Knotice, a digital marketing firm, it was reported that 36% of all email opens are now on a mobile device. This is a very high number when you consider that webmail and PC opens decreased by 11% and 9.5%, respectively, in 2011. And considering that nearly 41% of mobile users check email on phone, it is obvious that 36% of emails are now being read on a mobile.

Now this forces traditional email marketers to start focusing on responsive mobile email designs so that the emails are actually readable when opened on a mobile device. Since mobile devices come at various different aspect ratios and resolutions, responsive mobile emails are the way to go.

According to MarketingSherpa “2013 Email Marketing Benchmark Report” (2013) – 58% of email marketers are not optimizing their emails for mobile devices.

According to a report by ReturnPath.com 63% of American mobile email users and 41% of Eupeans would either close or delete an email if it is not optimized for viewing on a mobile phone. Image if you send out 10,000 email messages, 4000 are being deleted because it is not optimized for mobile! Also according to a BlueHornet report, 30% of the subscribers who receive unoptimized mobile emails will unsubscribe! Email marketers need to adapt for mobiles with a sense of urgency.

According to a survey by ExactTarget, 56% of US consumers have made at least one purchase in response to an email marketing message delivered on their mobile phone. This should motivate email marketers to take mobile more seriously.

Tips and Suggestions for Responsive Mobile Designs

Design for small dimensions. Make it responsive. If making a responsive design is not feasible with immediate effect. 500 pixels width is suggested by most experts to be the optimal dimension for mobile email and websites.
Call to actions, important content and revenue generating ads should be above the fold and at the top.
Images shouldn’t be heavy – keep it below 100kb per image as much as possible.
Many mobile browsers fail to load images frequently, so make sure that the images have Alt tags in place.
Use a single clomun layout when optimizing for mobiles. Double cloumns are good for traditional email messages but not for mobile.
Use Sans-Serif fonts such as Arial and Verdana only. Serif fonts are hard to read in small resolutions. Sans-serif fonts were specifically developed for the low resolution screens in the early days of traditional desktop PCs. But now with high resolution monitors everyone is using Serif fonts such as Georgia. But with mobile, we go back to the basics again.

With mobile email marketing messages, marketers have to remember that people do not have all the time in the world to read through the email messages. With desktops and laptops, people may lean back and patiently read through the entire email. But mobile email users are always on the move and don’t have much time and patience to read through an email – instead they skim it. The email copy should be designed for skimming – else the user is more likely to just close it and move on before you can get any attention. Summarizing the topic of the email marketing message in the subject line and also including a plain text option helps a lot in increasing engagement of the users.

2. Mobile click-to-call

With so many advanced features such as apps, browsing, wallets and so on in a mobile phone today, marketers can sometimes forget about the very feature of a mobile which 100% of the mobile users use – that is using the phone to make and receive calls! Talking with a prospect on the phone is the most straight forward way for businesses to establish relationship and trust with them.

According to Google’s research, people would rather prefer to call a business than visit their website when searching for information on their mobile phones. That’s because reading long sales copies or subscribing to a lead form is not so easy while using a mobile phone.

Imagine you are in a new city and you need a cab. If you search for “cabs” in your mobile phone and an ad pops up with a click-to-call functionality, you are more likely to become a customer of their business than visit another cab company’s website or a read a review about top 3 cab companies in that city.

It was observed by Forbes.com that by the end of 2012, Google controlled 56% of the entire mobile ads market and a whopping 96% of the mobile search ads market – the latter part of which is attributed to their mobile click-to-call innovation. And there is no indication that Microsoft and Yahoo can have a pie in this mobile search market. I guess, Google will continue to dominate this segment for some years to come.

According to Google, when advertisers added a click-to-call functionality in their AdWords ad campaigns, they observed a 63% increase in click-through ratio.

For a click-to-call campaign to be effective, your ads have to be in the number 1 position to get a descent number of clicks – and for that you have to pay more. But as of now, Mobile search ads are cheaper than the traditional PPC ads and one can get a first mover advantage if they jump into this right now.

Click-to-call feature is not a complex technology. It is just a simple tel: link which the mobile operating system recognizes as a phone number. The following click-to-call code that can be placed in any website and the latest mobile operating systems are smart enough to understand that when a user clicks on this link, a call has to be placed.

Replace the numbers above with your own phone number.

Skype already has a click-to-call functionality integrated into the internet user’s browsers where it would automatically convert a valid phone number into a clickable link and when clicked, it will place the call via the Skype App.

Looking at the success of Google in the mobile search market, Bing is also planning to launch click-to-call ads which will be integrated with Skype.

3. Mobile Wallets

I am not sure about you, but when given a choice I would rather choose to lose my wallet than my mobile phone. Since we carry our phones wherever we go it makes sense to use it as a wallet to pay for tickets, passes or even groceries. Both Apple and Google are trying to set standards in the market for mobile wallet and one thing is clear – it is only a matter of when mobile wallets become second nature of mobile phones. I personally would like to leave my wallet at home and use my mobile phone as a payment tool, ID tool, a key and a business card exchange tool.

According to Alcatel-Lucent.com’s market and consumer insights, 81 percent of consumers indicate strong interest in a mobile wallet service that makes the mobile phone a secure “wallet” for financial information, digital payment cards, loyalty points, coupons, and other digital tools.

According to Javelin Strategy & Research, mobile POS payments will rise at a compounded annual growth rate of 61% over the next five years making it a $5.4 billion market by 2018.

Apple made a mark in the market with their latest app in iOS 6 called the passbook. According to Apple, Passbook is the simplest way to get all your passes in one place. Boarding passes, coupons, loyalty cards and movie tickets are some of the main “currencies” supported by Apple Passbook. Credit card payments are not yet supported by this App right now, but we can expect it very soon.

Passbook is connected to Apps in the App store and depends on the apps. For example Lufthansa airlines has an app with which you can book flight tickets on your mobile phone and then export the boarding pass to your Passbook app. You can show the pass while boarding and there is no need for any physical paper boarding pass ever. The app will also show the flight timings and will give a push notification if the flight is delayed. EventBrite an event management company also has enabled booking tickets to events via the mobile app and load the passes in Passbook.

As of today there are 23 airline companies who allow the use of Apple Passbook app. The passes, coupons and tickets are right now displayed as 2D bar codes. We can expect NFC to replace 2D barcodes completely in the future – as of now iOS devices do not support NFC.

Google has upped the game to the next level with their Google Wallet technology. Google Wallet can store your credit cards as well and a special device at the point of sale lets you tap your phone on a special NFC device and enter a PIN for security on your phone to complete the payment. Another more secure technology called SingleTAP allows payments without entering PIN numbers.

Right now Google supports MasterCard credit cards and Google prepaid card which can be loaded with cash using any credit card. Visa, Discover and Amex cards are yet to be supported by Google Wallet at the time of writing this article.

Restaurants like KFC in UK have already implemented Mobile Wallet payments and they claim that 5% of all their transactions are now through mobile. Other companies in the same league offering mobile wallet payments are McDonalds, Starbucks and Carrefour (a grocery store chain in France).

So what’s in it for the retailers in offering mobile wallet payments? KFC claims that when you make it easy for people to pay, they will order more. It is a known fact that people who spend in cards have lesser spending resistance than people who have cash. Now mobile payments make it even easier – and it’s also fun in the beginning.

“When you have a very comfortable ordering environment, like a smartphone, you just order more,” said Jeremie Leroyer, chief executive of Airtag, which built the app for KFC.

Mobile wallets do not apply for online stores obviously but for all the other points of sale merchants, it is better to provide this option as early as possible because customers would prefer a competitor who offers mobile payments. With the mobile wallet industry growing, I can see the following opportunities:

Opportunities in Mobile Wallet Market

Consultancy for companies who need to implement mobile wallet payments.
Development of Apps related to mobile payments
Real time fraud monitoring for payments through stolen mobile phones.
Development of communication technology for mobile phones to enable mobile payments – such as NFC chips and RFIDs.

Challenges

The primary concern among mobile wallet users or users to be is the securing of financial and personal information. With mobiles becoming more dependent on complex operating systems, it is also vulnerable to hacking attempts and identity theft. Mobile wallet promoters and ambassadors should communicate their security features while trying to convince the customer to use mobile wallets.

4. New Mobile Ad Formats Replacing Mobile Display Ads

If someone is telling you that mobile display ads are the future of mobile marketing, they are probably living under a rock. Let us keep the statistics aside for a while and remember the last mobile display ad you clicked on and actually found it useful. Chances are that you never clicked on a mobile ad and if you did, it was probably accidental. Same here. It is quite clear that we are at the beginning of the end of mobile display ads era.

Such accidental clicks on mobile display ads are called fat finger clicks and accidental clicks are measured by the user’s engagement after they click on an ad. If the mobile users spends 2 seconds or less in the destination website or app after clicking on an ad, it is considered an accidental click.

GoldSpot media has an ad platform through which they serve millions of mobile ad impressions. As pointed out by BusinessInsider.com, they released a report called the ‘Fat Figer Report’ where they have highlighted the number of accidental clicks on mobile ads are as high as 50%. Now who would want to run a mobile ad campaign where 50% of the clicks are wasted?

Also static banner ads get more accidental clicks than rich media ads because users find out an ad more easily when it animates itself and avoid clicking on that. Internet users wanted to avoid display ads are not new and Ad Blocker apps and browser extensions have been in the loop for quite some time now.

Enlightened marketing souls who understand the reality of display ads will not go for it (at least not with aggressiveness) in the coming years. If mobile display ads are in the decline, what can replace it?

Some industry experts have propoesed a full screen rich media ad which can be skipped in 5 seconds just like we have the pre-roll video ads on YouTube. Interstitials have been finding it’s place in the internet for more than a decade now and it’s not a surprise that it is coming to mobile.

Eric Picard published an articled in AdExchanger.com where he proposes that a full screen ad should be displayed for 3 seconds and collapses and if the users are interested they can swipe it back to the top and engage with the ad. Such a mobile ad would take up the full screen and thus commanding enough attention of the user but also less intrusive for the users who just want to consume the content. The following image from AdExhanger.com shows how it is done.

Here are some of the other alternatives to mobile display ads:

Push/Notification Ads
Icon Ads
In-App Dialog Ads
Full screen video Ads

Having said all the -ves about mobile display advertising, the market is still a huge one. But going forward marketers have to innovate or adapt to the latest trends. Even minor tweaks to the mobile display ads technology can yield good returns. For example, Pandora online radio displays ads on mobile along with audio which engages the user on a higher level within more than one sense.

Also mobile display advertising is moving from the control of networks to the large publishers. Facebook, Pandora and Twitter are leading the mobile display ads market and Google, Apple and Millenia Media are taking the back seat.

Mobile Display Ad Revenue in 2012 for (According to TelcomTiger.com)

Facebook – $234 Million
Pandora – $229 Million
Twitter – $117 Million

5. Showrooming

Showrooming is the practice of trying out or examining a product at a brick and mortar retail store and then ordering it from an online e-commerce store for a cheaper price.

I have done this myself the last time I wanted to buy a Shoe. I went to Puma retail showroom in a big fancy mall, tried a shoe, noted the model number and ordered the correct size and model online at Yebhi.com at a Rs.1,200 discount.

With smarter phones, bigger screens and higher bandwidth, showrooming becomes easy and purchase decisions (to buy online) can be made right in the store. Showrooming costs retailers heavily because they cannot offer the product at the same prices as that of online stores because of high over-head costs and they end up losing the sale. Also when a lot of customers examine a product and don’t buy it, the product becomes damaged and it costs the retailer time and money.

According to Alcatel-Lucent.com’s market and consumer insights 89% of smart phone users use a mobile phone to scan products inside a retail outlet for price comparisons. There is nothing illegal in showrooming from the consumer’s point of view because he/she is always looking for the best deal on a product.

Instead of trying to curb showrooming and becoming unpopular in the minds of the customer, the only way for retailers would be adapt to the reality of the situation and see how they can add value.

Some of the ways showrooming can be combated are:

Use retail stores as a branding and advertising tool and offer products in their own e-commerce store at a discount.
Offer products that are exclusive to the stores and not available online.
Provide value added services such as installation or complete demo of a product which the online store cannot provide.
Reduce overheads and try to compete with the pricing of online stores.
Make it easy of the customers to compare prices online by offering QR codes in each product displayed instead of curbing the use of cell phones inside the stores.

So what do you think about the evolving mobile marketing world? Would like to hear from you…