Across the world, more and more people are opting to use their mobile phone rather than power up their PC to browse and shop online. This has opened up a much larger audience of mobile users that companies can market to as mobile provides a new platform to reach them through. Mobile marketing is a force to be reckoned with and every business that focuses on online marketing should be including it in their overall marketing plan.

Online retailer Kalahari.net, which launched its exclusive mobile shopping site www.kalahari.mobi, reports that over 51% of South Africans with mobile phones use the mobile Internet on a daily basis and are ready to use it to make payments.  According to the survey, 26% of the mobile users already transact online and the remaining users are likely to pay online.

Tracing the mobile-only new generation

Statistics show that the ratio of mobile phone users to PC Internet users is 5 : 2 with a majority of people have access only to a mobile phone screen.  With the introduction of smart phones to the market, there is a whole new generation of mobile Internet users.  This young market is labeled the “mobile only” Internet generation as they barely, if ever, use a personal computer, laptop or notebook to browse the Internet.  In fact, a local research house found that 57% of South Africans Internet users are mobile only users.

From these figures, it is clear that mobile phones have a tremendous impact on our communication. It also affects the way users transact online. As a result many companies are finding it worthwhile to create a standalone version of their website rather than just make it compatible for the mobile screen. What used to be an alternative method of shopping is now rapidly becoming more common. Interestingly, mobile Internet users who transact online consider it as safe as transacting via their computers. This confidence enhances their trust in the businesses they feel happy to deal with, increasing the conversion rate for those businesses.

Service providers and mobile phone brands

Most South African mobile Internet users use MTN, Vodacom, Cell C, Virgin Mobile and the recently launched 8-Ta. Mobile phone brands range from Nokia to BlackBerry, Samsung, iPhone and Sony Ericson. Android may be all set to capture a larger market share this year, while Symbian continues to be the preferred operating system with BlackBerry.

Kalahari.net’s survey also discovered that mobile shopping are mostly centered around apps, flight tickets, books, CDs and DVDs, music downloads, games, electronic devices and groceries. Marketers should aim to give their mobile user content that is just one click away from a purchase.

One of the most important things about mobile websites is the local context, since it is Internet on-the-go. Mobile users want easy to view relevant information that they can take action on. While mobile marketing is still in its growth phase on a global basis, research shows that developing nations will see the maximum growth as the mobile phone will be the only access to the Internet for most people. This situation is enhanced by the fact that over 700 million people will use mobile money by year 2015. Mobile transactions will experience massive growth, particularly in countries where the mobile phone will be users’ only access to the Internet.  Financial companies are also gearing up to reach out to their customers via their mobile phones. Live money services are showing explosive growth, making it more and more obvious that we are heading towards a cashless society.

Mobile marketing is revolutionising the way brands are reaching out to customers. Marketers are using coupons, location-based marketing, mobile ads, QR codes and more to connect with a broader market. Studies conducted on Internet usage patterns are showing an increasing number of mobile users preferring to use their mobile phone or downloaded apps to access the Internet.  Consequently, an increasing number of marketers are choosing to optimise their mobile websites to enable mobile users to get quick access. As an alternative, a company’s existing website can be optimised to recognise mobile users and display accordingly.

Mobiles: A relationship building tool

The biggest benefit of mobile marketing is its potential to build customer relationships.  As far as mobile apps go, the iPhone dominates as a platform with most developers focusing on developing new iPhone apps. However, Android and iPad apps are poised to experience strong growth during the next year.

In the meantime, while many mobile users are opting to access the mobile web directly, smart phone apps are popular. Apps have the advantage of encouraging mobile users to use it frequently if the app adds value.  Mobile marketing ROI (return on investment) takes time to show results – provided the marketer has a tracking system in place.

Augmented Reality – a powerful mobile marketing tool

With innovations such as augmented reality, businesses can engage their users visually, getting them to respond online or offline for a mutually rewarding experience. Augmented reality is successful because brands can provide consumers with a marketing message in a fun way.

An example is the above is the campaign Airwalk ran for their limited edition shoes in November 2010 where people could shop in a virtual pop up store with the shoes. With AR, people could see a floating show on their mobile screens that they could buy online. The shoes were sold out within 24 hours. Another example is of H&M, which required users to take pictures of virtual items they could identify in front of specific H&M stores, enabling them to unlock an in-store discount. Obviously, AR can be used as a powerful tool by marketers to entice more customers.  AR can give users real time offers in-store, breaking the habit of using phones to shop for the lowest prices. Users can also quickly find what they want yet keep them longer inside the store.  The greatest thing about AR is its ability to provide visual information about a product.

Many marketers acknowledge that mobile marketing must be a part of their overall marketing campaigns and they may use it for select promotions or integrate it across channels. The important thing to understand is that mobile phones and devices play a critical role in connecting a brand with customers wherever, whenever and however they choose.

Today, marketers have several methods and tools to engage with their customers and focus on relationship building. Mobile marketing combined with social media allow companies to send out customised content to customers. With social media marketing incorporated into their marketing strategies, businesses are set to allocate a budget for mobile marketing. Many companies are already making use of mobile marketing, using sms campaigns and mobile websites. However, very few have a system in place to measure their Return on Investment (or ROI).

According to an April 2011 survey by King Fish Media, many marketers are still in the planning stages of devising a mobile strategy. A majority of marketers did not have a tracking system for mobile advertising even though they are aware of the importance of tracking ROI.  Below are some statistics from the report.

Can mobile commerce result in positive ROI?

Mobile marketing can transform a business’ profitability. For example, Intuit, an accounting software company increased its sales by 30% through its mobile tax products in 2010. eBay has an iPhone app through which it generated over $400 million sales in 2010. Pandora, the Internet radio service, reports that one in ten smartphone users use the service on their phones, getting the company a big chunk of the market share in its niche.

Currently, mobile marketing is more about engaging the customer rather than focusing on mobile commerce.  Another example is McDonald’s recent interactive billboard campaign in Sweden where they integrated mobile technology with a digital billboard.  The campaign aimed to get people to participate in the game without downloading any apps. Their phone picked up the participant’s location, letting them join the game via a website URL. If they played it for 30 seconds without losing, they won a coupon for the nearest McDonald’s. While it is not clear what the campaign’s ROI was, taking the cost of the campaign into account and the possibility of participants simply redeeming their coupons without buying any other products.

It is important to understand that social media ROI goes beyond monetary returns as it is also a return on customer engagement. It is possible to track how much time consumers spend to interact with the brand, customer loyalty and the chances of referrals from them.  According to the King Fish Media report mentioned earlier, a majority of marketers are tracking their website visitors from mobile devices using Google Analytics. They find that only about 8% of these visitors come from mobile devices and about 10% use mobile apps offered by the company.

Designing a measurable marketing campaign

The happy trend is that people are responsive to mobile marketing campaigns.  Companies that offer incentives can measure the response to calculate ROI. These incentives could be in the form of coupon redemption, sales inside the store, number of people registering for alert reminders and so forth. Coupon redemptions are an effective way to measure and track response. A company called Eagle Claw Fishing Equipment encouraged its customers to text a keyword to make them eligible for an SMS coupon. Within four days of the campaign they experienced a 23% increase in their sales as they could track these redemptions.  It is a question of designing the mobile marketing campaign in such a way that it can be measured – making it easy to track and measure ROI.