The market may not as yet be mature, but mobile marketing is not just hype. It has a profitable, innovative, constantly evolving and productive ecosystem. So who’s likely to benefit from this rising revolution?

The cornerstone of any mobile marketing ecosystem is the people involved it and the ideas they create. From these come its four interconnecting strategic spheres focus on delivering value to the customer. Effectively the suppliers closest to the customer with the right products and services (brands, content proprietors, and marketing agencies), applications (those that discretely provide applications like mobile marketing dashboards), and those with bricks and mortar or virtual media and retail properties are likely to gain. Other mobile players will not be so fortunate.

The system involves the manufacturers of handsets, the application development companies, content and solutions providers, advertising agencies, other types of creative marketing agencies, the mobile network operators and network providers etc.

It is a growing ecosystem and market, which hasn’t yet reached maturity. It might not have reached its prime, as it is still in its early days of development, but it’s worth noting that there will be 3.3 billion mobile phone subscribers by 2010. This is the prediction of the US-based Market Intelligence Center (MIC). Handsets are expected to outpace TVs and computers, and they’ve already begun to do exactly that says Neomedia Technologies (which has an illustration of a mobile marketing ecosystem a June 2006 ‘Shareholder Meeting’ presentation).

The mobile marketing ecosystem therefore represents a major opportunity for the large and small companies who get involved and nurture the mobile ecosystem. There are opportunities for everyone to profit and develop effective customer, partner and supplier relationships.

The focus on innovation in terms of technology, applications and ideas, is widening the range of new players, products, services and applications. Within the ecosystem there can be several other ecosystems (e.g. a mobile advertising ecosystem). Within this you will find services such as pay-per-click mobile internet and text message advertising. Michael Mace, writing on his ‘Mobile Opportunity’ blog, believes that it has also led to “The rise of the information ecosystem.”

Good business, growing economies

The Microsoft Vista case study shows how important a business ecosystem can be to the economy and to the supplier involved in its upkeep. The company joined forces with analyst firm IDC, and the study concluded that the ecosystem involved with the recent launch of the new computer operating system could create 50,000 IT jobs in six large European countries, and a regional analysis found that this would involve around 150,000 individual IT companies who sell, produce of distribute related products and services in 2007. This in itself was forecast to create 400,000 jobs.

SMS drives mobile marketing

SMS text messages are an important driver and stimulant for the growing uptake in mobile marketing, which has the potential for achieving significantly high response rates. US mobile marketing firm Admob says that one mobile marketing campaign achieved a response rate of four times that of its online alternatives. This involved stimulating an increase in downloads of a free download called Orb. A number of ecosystem players may have been involved in the campaign.

Another example shows the immediacy of the medium; there were 54,000 downloads in just here hours of a new Diddy ringtone. The company says this proves that the channel can be used as an effective marketing and distribution channel, involving several players adding value in different ways.

How the mobile ecosystem works

Each player within the ecosystem is expected to, as the Mobile Marketing Association puts it, “Work in concert to deliver a rich experience to consumers. The Mobile Channel Value Chain is the path by which the actual mobile communication and interactivity takes place between the product and services sphere and mobile subscribers (consumers)”. Once demand has been established, and this will often involved a wide range of related products and services, the next steps is about defining coherent value propositions deliver significant customer benefits. These are promoted through the media and retail spheres of influence.

By using the word ‘nurture’ above, I stress that each supplier or active participant is responsible for maintaining its health. Although several suppliers may compete, they recognise that it’s in their own interests to look after it. But significant competitive advantage can be attained by forging collaborate value-driven supplier alliances.

From a mobile retail (and this also applies to B2B) perspective this may involve selling a customer the latest handset with the latest features, an airtime contract, additional software or services, and accessories to go with the phone. The services are broad; e.g selling a customer an insurance policy against theft or accidental damage to the handset, so that he or she feels safe and secure. The ultimate aim of an ecosystem has to be to provide a close fit with the customer, which will in turn spark what is called a ‘Keystone decision’. Everything is aligned and revolves around the customer; that’s the only way to win sales and succeed. .

The convergence of technology (fixed line telephone with mobile, and traditional media with online) is playing a significant role in the burgeoning development of mobile marketing ecosystem with the advent of mobile TV, mobile video, the growth in the mobile internet, premium rate TV SMS text-ins, other types of text messaging services, advertising and search.
 
Location, location, location

Multimap believes that “Location is an essential part of the current and future mobile system”. Mobile marketing can pinpoint where a consumer is, his or her behaviour more instantly than other form of marketing. There has also been a significant growth in location-based information and data services. Therefore such strategies are focused on providing a meaningful experience. It can involve a broad range of consumer scenarios including directions/search, people logistics tracking, personal navigation, travel, social and research, as well as personal preferences.

One of the great things about ecosystems is that they are truly customer-centric, providing the customer with range of choices which needn’t be based upon price alone, but value that actually means something to that individual. Businesses will need to adapt their business models as new richer media technologies are adopted and converge.

A number of other factors will either inhibit the development of the ecosystem, including gateway costs and the slow uptake of 3G mobiles, or become positive key drivers (changes in consumer demand for richer media content). It is a rising revolution, a new commercial reality; the catalyst for it has to be the customer. But everyone can benefit from it.

By Lee Bowden,
Director, Piri Ltd

Email: lee@piriltd.com
Web: http://www.piriltd.com