How effective is mobile marketing - Really?

Continuing on with my list of dangers:

• List Brokering
• E-mail to SMS Gateways
• Desktop SMS Systems
• Misrepresenting mobile marketing effectiveness

Today's topic is: Misrepresenting mobile marketing effectiveness

Ok - so that's a pretty strong statement. But if you'll give me a few paragraphs I'll see if I can back that up.

EXTRA! EXTRA! READ ALL ABOUT IT!

There is much discussion in the press regarding the response rate when it comes to SMS marketing. Consumers will read an SMS message 94% of the time - and may respond to an SMS message as much as 23% of the time. With numbers like these, there is no arguing that reaching a consumer with timely, relevant and requested content is effective.

If we compare the numbers above with the traditionally accepted numbers such as 1% for broadsheet advertising and 2%-3% for direct mail - or as much as 10% for well targeted direct mail - it would seem that SMS is far and away a much better solution.

And, if you read the articles carefully, everyone will be sure to point out that these campaigns are "permission based" and that there should be significant effort to avoid the perception of SPAM. Translation: You've got to expend a marketing effort to acquire the opt-in permission before you can run the mobile marketing campaign. And now the numbers get much more interesting.

Where's the Cost to Capture the Opt-In?

If you can't send someone an SMS without their permission, how do you go about getting their mobile phone number? You guessed it - traditional media.

• Direct Mail
• Targeted Direct Mail
• Radio
• Television
• Internet Banner Ads

And what is then the effectiveness of traditional media?... somewhere between 1% and 3% for the most part. And when it comes to asking for people to join a mobile marketing campaign, those numbers can get smaller very quickly.

First, you've got to target the right audience. Age demographics are the 2 high value bands of 18-24 and 25-34 year olds. In the US you've got to reduce that by the percentage of that segment who are using text messaging (54% as a national average). Then you need to provide high quality content and/or incentive to get the consumer to take the action of sending an SMS message to Opt-In. This is not an easy task - and by the time you've done you wind up with:

.5% of consumers reached chose to opt-in to the campaign.

94% (of .5%) of all SMS message sent are read
23% (of .5%) of all SMS messages sent are responded to

Now that is a much more realistic view as to the effectiveness of mobile marketing. And the reason it's more representative is that it truly focuses on the fact that you can not SPAM a consumer with mobile marketing messages.

Unless You're Going to Go the List Rental Route (Use CAUTION)

To be fair, there are also people who don't bother with the expense of building their own opt-in lists and go to list brokers where they rent someone else's hard earned list of mobile consumers. But even this is not without it's adjustments.

It's not guaranteed that 23% of SMS messages will get a response to a 3rd party advertiser. The consumer chose to Opt-In to a specific campaign and most likely did not know they would have their mobile number sold to a list broker. I.e.; the quality of the "partner opt-in" is generally very low.

Furthermore, the demographics associated with most mobile phone number lists is either limited or of poor quality. And the lower the quality of the list you're buying, the lower the potential effectiveness of the mobile marketing campaign you're trying to run.

When We're All Done Filtering

When we're all done filtering the numbers there are a few salient facts that do remain.

• When you build your own list and make the investment to capture Opt-In permission from your consumers - Mobile Marketing is Very Effective
• When you purchase/rent a list - your effectiveness will not match these great numbers in the press
• When you have to build your list using traditional marketing to start, your effectiveness can't match the numbers in the press.

Mobile marketing is an incredibly effective way to reach consumers and you can indeed achieve fantastic response and rates and enjoy a solid ROI from mobile marketing campaigns - but don't forget to factor in the cost of acquiring the original consumer opt-in permission.

Coming next week...

Next week I'll start off with a new series focusing on different types and styles of mobile marketing and how SPAM can factor into each one of these... or more importantly - how they can be successful and avoid the consumer perception of SPAM.

Until then - Happy Holidays!

Best regards,

Sr. Consultant - Mobile Marketing
Pocket Reach Solutions, LLC