Wednesday, February 02, 2005

Mobile Marketing

From eMarketer Where is mobile marketing headed?.

Click on the link..the graphs and figures are impressive.

A new eMarketer report explores three possible scenarios for the growth of wireless advertising and marketing over the next five years.

A recent BusinessWeek article quoted several advertising agencies as saying that 2005 will be the breakout year for mobile marketing, with spending set to spike from "virtually nothing to millions in pilot investments." This may sound suspiciously like the hype bestowed on online advertising in the 1990s. But remember, the Internet has become an integral element in marketing and sales strategies for most companies.

There are technological and privacy hurdles to be surmounted, and mobile marketing is not likely to become the instant cash cow agencies hope, but like online marketing, it is here to stay. Wireless could be the next frontier.

To answer the question of what types of businesses will flourish in this new environment, eMarketer's new report, Mobile Marketing and M-Commerce, puts together three potential scenarios that plot spending growth for wireless advertising and marketing over the next five years. Each starts with the supposition that in percentage terms, wireless advertising is at roughly the same level relative to interactive advertising that online advertising was in relation to traditional ad spending in the mid-to-late 1990s.

In each of the scenarios that eMarketer has constructed, the assumption is that as the buzz surrounding mobile marketing builds to a fever pitch between 2005 and 2006, firms initially will throw money at this new channel, much as many did in the early day of the Internet. Some campaigns will succeed — but the environment will be fairly hit or miss. For this reason, eMarketer predicts a short period of disenchantment with wireless around 2007. Although spending will continue to climb, growth rates will dip briefly before resuming upward momentum as the medium grows to maturity toward the end of the decade.

"Although companies have been burned in the past because they rushed to embrace unproven technologies, the time to start integrating mobile strategies into the marketing mix is now," says Dr. Noah Elkin, eMarketer Senior Analyst and author of the report. "The day that promotional messages are pushed to a consumer's phone each time he or she approaches a place where a particular good or service is sold may never come, but wireless marketing will be used to effectively reach, acquire and retain customers and ultimately generate sales by way of direct response contests and promotions."

Juniper Research projects that the global mobile commerce market, comprising mobile entertainment downloads, ticket purchases and POS transactions, will grow to $88 billion by 2009, largely on the back of micropayments. The research firm predicts that on average, Western Europeans will conduct around 28 transactions per year using their mobile phones by 2009, with each transaction valued at an average of approximately $3.00.

"Given that mobile phones have the potential to evolve into full-blown digital wallets, using handsets to make purchases must be easy, convenient, cheap and seamless for consumers," says Dr. Elkin. "The 'one-click' purchase model pioneered by Amazon remains the standard to which all should aspire."

One click by a phone, on a universal identifer, will be the killer app for m-commerce.

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