Location Based Marketing - Could it Really Work? Part Three at MobHappy

by Russell Buckley on February 2nd, 2006 in Marketing, Location Based Services
This is Part 3 of my look at Location Based Marketing.

Part 1 identified that the key to success is the type of messages that marketers plan to send in the channel. It’s key to getting potential users to sign up in the first place (opt in), stopping them from opting out on an ongoing basis and it’s key if the messages are going to work and that recipients will respond to them.

In Part 2, we looked at some of the physical characteristics of LBM messages, that are essential to success, such as they should be free, not interrupt the mobile user and that they should quietly disappear when they have stopped being relevant.

In this final part, I’m going to look at the content of the advertising itself - saving the most important discussion to last.

It’s worth stressing that marketers must focus on this aspect, as users will have to agree to sign up to receive your advertising in the first place. If the implication is that you’re just going to send them a diet of same-old-same-old branding advertising, it’s safe to say that you won’t get many opt-ins.

As an example, Coca-Cola have always been at the forefront of advertising excellence and mobile innovation. Supposing they were one of the pioneers in LBM, which is quite a likely scenario. Using traditional, interruptive advertising thinking, they might reasonably consider sending a very short video of a Coke bottle onto your phone, along with the “Life Tastes Good” strapline they currently use in the UK.

Using best practice (they read Part 2, you see) this appears for about 5 seconds on the phone from time to time and then disappears. In other words, it’s quite subtle, non-invasive and respects the fact that they’re appearing on YOUR private medium.

But why on earth would I, as a user, agree for Coke to appear in this way? This isn’t like a normal media channel where advertising comes pre-packaged and I can like it, lump it or cease to consume the medium. My phone works perfectly well without advertising, so marketers are going to have to make a much more convincing case that I should invite them in and let them stay.

Throughout these posts I’ve been very careful to talk about mobile marketing, as opposed to advertising, as I don’t actually think the advertising remit, practice and history is very helpful in enabling us with the new thinking required. We cannot treat mobile marketing as a one-way “consumption” process and must think how we can add value to the lives of the recipient of our messages. What can we offer them that will make them agree to engage with us?

The obvious answer is that we can pay them with cash or other currency, to be exposed to our messages. It’s so obvious that I don’t doubt that there are thousands of business plans being developed around the world as we speak, with the words “mobile”, “advertising” and “pay-to-receive” prominently scattered throughout their gushing pages.

The problem is that it doesn’t work and never has. The economics of advertising are such that you can offer only a very small reward to someone to view one ad. Therefore, it’s really only attractive to a tiny, tiny minority of people in the West who can afford a mobile phone and the cost of running one and to whom earning say, up to $10 a month is an attractive proposition.

It’s also worth pointing out that these people aren’t terribly attractive to advertisers in the first place, as they haven’t got much money to spend.

This is a great shame though, because as well as being an obvious solution, it’s also the easiest one for marketers - who cares what the messages actually say, if you’re paying people to watch them anyway? They’ll get what they’re given.

So how do we persuade people that they should expose themselves to our messages, or how do we add value to their lives in some way?

I think it comes down to the these factors, but there may well be more. Make sure you leave a comment if you think I’ve missed something or want to ruin my cunning IDEA idea:

Information
Deals
Engagement
Advertainment

Taking these briefly in turn, as I hope they well be somewhat self-explanatory, I think that mobile phone users will accept your marketing if they know the messages will contain at least one of the IDEA elements:

Information

Tell them something they don’t know. And possibly, that’s relevant to where they are. This could be news of a “Secret Sale” happening in the vicinity, but could be as wide as sports scores, music chart and gossip or breaking news.

I think this could also be combined with Pull-based information services, as sponsored content.

Deals

This was certainly our main thrust at ZagMe and we signed up 85,000 users in two malls in less than a year, so we know this has the potential to work as a proposition.

The premise here is that the user will get access to deals they wouldn’t have otherwise, if they sign up and use the channel. This can be location specific (ie discounts and promotions from local shops) or non-location specific - maybe they can get free or discounted mobile content (ringtones etc) for doing something.

Engagement

Much traditional advertising has been a one way monologue. Marketing has now evolved to becoming a conversation between a brand and its customers. This isn’t for every brand/customer relationship - frankly, I don’t want to talk to Coke, but there are plenty of people who do.

I think there are many fascinating opportunities for brands to engage via the mobile phone channel, where overt marketing practically disappears in puff of subtlety.

In this category, I’d also add User Created Content where the marketer is the enabler for customers to engage with each other.

Advertainment

Great advertising has always entertained as much as it persuaded and I’d be happy to watch a classic Guinness, Bud or Honda commercial on my mobile. But what proportion of total ad output is that? 1%, 5%? The fact is that many brands will have to really step up to meet this challenge.

Some may argue that such heights are out of reach of lesser brands. While this is an argument I don’t accept, there is an easier option, which is to entertain with other forms of content. Allow people to play a game you sponsor, or listen to music or audio content you bring them.

For me personally and I suspect many millions of mobile users out there, if a channel delivered on the IDEA values, we’d sign up for such a service tomorrow.

I have two final thoughts to share.

Firstly, such services may emerge as either solus efforts or a media channel. In other words, Coke may try this on their own or a media channel might emerge and sell access to their users to the likes of Coke and their agency.

In either case, the service is going to need a very strong gatekeeper to police the IDEA values. Because the moment some brand manager or agency tries to cut corners, there’s a danger that the user will opt out of the service altogether.

If you’re the media owner, this is going to put you in a very strange position of inevitably having to turn down paying “advertisers”, rather than risk your expensively acquired customer base. If an agency just doesn’t get the fact that your users won’t appreciate an ad saying “Check out our Gr8 APR percentages”, you’ll have to fire a potential client.

Don’t also forget that opt out is one of the most enduring acts a person can undertake. You might get married again if you divorce your husband, but you’ll never sign up again for a service that has pissed you off so much that you’ve opted out of it.

The final thought is targeting and relevance. We will know something about the recipient (probably just location, age and gender to start off) and it makes sense to make sure that your messages are appropriate to the audience.

In addition, such a channel should offer ways in which the user can tailor their experience, from opting out of certain brand’s communication altogether to specifying that, for example, they only want Advertainment messages. I don’t expect many will use these tools in the short term, but they will increasing become more popular over time.

I don’t want my coverage of targeting and relevance to seem like a throw away remark, but I’ve written a lot about it before and don’t feel it’s necessary to expand more here. But please don’t confuse brevity with importance - it’s a vital point.

So there you have the bones of the perfect LBM channel and I’m convinced that if the overall marketing proposition was right, people would be delighted to sign up and furthermore, that they’d love the service. It might even get people dedicating songs on radio stations to it, which is what happened to us at ZagMe.

I’d love to get your feedback on this, so if you’re a techie or marketer, LBM sceptic or evangelist, please leave a comment and have your say.