At a recent conference I heard someone say that ‘Mobile is next year’s big thing - just as it has been for the last five years’.

It is hard to disagree because, despite all the hype, there has been remarkably little action. But now we believe there is some momentum and that smart brands will take these first green shoots of growth as a sign to start investing in the medium.

What’s changed? Lots of things - most operators now have advertising sales people, mobile agencies are being snapped up for ridiculous valuations and the volume of hype is higher than ever.

The one factor that really does change everything is Google. They take the mobile market seriously, so consequently a lot of other people in the value chain have decided they should do too. First some background.

Everyone has a phone
We all know the stats - more and more people have mobiles and use them for more and more things. In many markets there are more SIM cards than people and the way people use their phones continues to evolve – it is the way in which people use their mobile phones that is of real interest, especially to advertisers.

Culturally the mobile phone has become essential as 24/7 contact is the norm and this affects behaviours. If someone loses or forgets their mobile it is now unbearable for them. To not have that level of communication means people feel cut-off and unconnected.

Once, if someone was waiting to meet a friend, they would buy a paper to while away the time. Now they will occupy themselves with their mobile – by texting, playing games or accessing content – either through their operators portal or on their mobile internet. Phones have become a replacement for many things including the address book, the alarm clock, the camera and increasingly the music player. They are central to many aspects of people’s lives, and are a key access point to all media uses (see the ‘Mobile Motivation’ table below).

By Simon Andrews

MOBILE MOTIVATION

Below are the five key motivations behind technology use. The mobile phone is a platform to all of them.

Motivation

Mobile Function

Information

Mobile internet access, locationbased services

Entertainment

Music storage/services, mobile gaming, mobile TV

Communication

Voice, SMS, IM, email

Transaction

Mobile internet, barcode coupons, swipe & pay

Self expression

Handset ‘look’, ringtones

Japan adopted an open market approach early on and with good phone technology is further advanced than most other geographies. The way Japan has developed means it is easier to put content on the mobile phone network – there is no real gatekeeper - so advertisers have been able to experiment further.

DoCoMo, the Japanese network provider, has been at the forefront of much of this activity. It has created a mobile environment such that users have an expectation of seeing content, buying items and using the phone for a variety of things besides calls.

One service means its phones can be used as a digital currency. They can be treated as underground cards so that when passengers enter a station they run their mobile phone over a sensor to pay for their ticket.

Although web access via mobiles is in its infancy, already research tells us that in the US 19% access the web via their mobiles compared with 34% in Germany and Italy - and it’s growing. The key issue is one of cost - markets where all you can eat data packages are available have much higher growth than those where people are still charged by the megabyte – and we’re now seeing all you can eat data packages being launched in many markets.

All the evidence that mobile is a huge part of people’s lives is there. Consumers already pay an awful lot for media and it is clear that people don’t want to pay any more for mobile content. So there’s a role for advertising to fund the mobile content business just as it funds TV, press and online.

Advertising waiting to happen
All these factors combine to make advertisers really interested in mobile as a medium. But there are two big issues.

• Can advertising work on mobile?
• Assuming it can, are the mobile industry and the ad industry ready for mobile advertising?

There is a growing fear and realisation among advertisers that consumers really don’t like advertising. People dislike interruption, most clearly displayed in the mobile market by the SMS message. Consumers have become irritated by the rise in commercial text messages, which bleep and vibrate into their lives. Because the initial expectation is that it’s a welcome message from a friend, the added disappointment and annoyance does those companies adopting this strategy without the customers clear permission no favours. Research in the UK found that 70% of 15 - 24 year olds ignore all commercial text messages they receive.

How do brands get involved?
The issue for advertises is how can they get involved and what can they do in the mobile space? We see how important mobiles are to people and recognise it has the potential to be a very intimate way of talking to consumers but we are also cognizant that people don’t like being interrupted.

The way forward is to move the mindset away from trying to recreate traditional advertising on a mobile - an approach that advertisers have taken down the much-loathed SMS route. Instead brands need to find a way in which they can be useful for people - what is known as branded utility.

This has been seen in other marketing arenas such as UK supermarket Tesco, with its loyalty voucher Computer for Schools scheme, or the Nike+ iPod link up. This is where Nike shoes have a sensor inserted in the sole that connects with a runner’s iPod Nano providing a service that includes measuring distance run and calories burnt as well as music selection, enhancing Nike customers’ running experience.

These are cases of brands giving something back. The concept of branded utility is telling the consumer something useful and building a relationship rather than advertising being one-way and involving the brand saying ‘listen to me as I shout about how good I am’. In the process the consumer will allow the brand to inform them about the product or service in question. The mobile world lends itself well to this.

And there is a role for ‘traditional’ advertising thinking which is all about getting the right message in front of the right user at the right time in order to build usage for your branded content/utility.

For instance in Germany, Heineken produced a bar guide for the mobile phone. People out in Hamburg or Munich for the night could access the guide on their phones and it would tell them where the good bars were, what was on that night, where DJs were playing, the type of music, and so forth.

Blackberries have taken off but they don’t have a world clock system as standard which many mobile phones have. So one client is looking to provide this service to Blackberry users. It’s useful and it doesn’t cost much so it can be given away.

This means the tool sits on people’s Blackberries and the brand has a continuous presence.

It is a form of enhanced sponsorship. Rather than wait for someone else to create something and sticking a logo on the end, brands look at what their customers are interested in and build from there. This works well with mobile because it is such an intimate environment - people are looking to add more content to their phones and to personalise them.

Additionally there is a clear ‘brought to you by’ role for brands to facilitate mobile content by funding it and running ads around the content in the way pre and post roll has emerged as the standard ad option for online video.

We know where you are
A great benefit of mobile is that branded utility can be taken one step further because networks know where the person is. So the next big thing is location-based marketing. It is still early days and so the system is quite clunky. This means the example that is often cited of someone walking past Starbucks and getting a text telling them to come in and have a cup of coffee is unrealistic at present.

With location based information search this can really be enhanced. If someone searches on their phone then Google will look at their location and can give an areaappropriate answer. This requires some smart thinking from brands on how to use mobile search - if someone is searching for Nike on a mobile it’s likely that the most valuable information is a local stockist, rather than the product info that might be the objective for a PC search.

The location aspect of mobiles also means there are interesting social networking opportunities such as with Dodgeball (yet another Google acquisition) in the US. It offers a service where friends can sign up and then be notified when members of their network are in the same locality.

Currently it requires people to send a text saying ‘I’m in Manhattan tonight’ but in future the location base will be able to say, ‘did you know your friend’s just round the corner’.

Advertisers, start experimenting
Because this is still very early days for mobile advertising there is a danger that brands take a ‘wait and see’ attitude.

Money always follows audience but with the web it took around 10 years to really take off. That had never really happened before: TV came out and it was used as an ad medium quickly. People made the internet sound very difficult and geeky and the advertising industry took too long time to wake up and see that it was a good thing. What is required is for advertisers to start testing it now and try out smart ideas that will differentiate their brands. If we learn what can be done well now, as mobile gets easier and richer and better, marketers will have some learning from these tests rather than building from scratch.

If we procrastinate on mobile, brands will miss out on really good opportunities to do business.

For more information visit the Mobile Business Research Pavilion

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