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PRESENT & FUTURE OF MOBILE MARKETING

NOVEMBER 2012

A Forrester Consulting Thought Leadership Paper Commissioned By Velti

Mobile’s Potential Lies Beyond an Extension of the Desktop A Market Research Study On The Strategic Use Of Mobile In Marketing November 2012

Forrester Consulting

Mobile’s Potential Lies Beyond an Extension of the Desktop (A Forrester Consulting Thought Leadership Paper Commissioned By Velti)

Table Of Contents Executive Summary: Use Of Mobile Is Tactical, Not Strategic, In Marketing ............................................................................ 2! Advertising Dominates Mobile Marketing Mindshare Today ...................................................................................................... 2! Mobile Offers Untapped Opportunities To Marketers ................................................................................................................... 7! Few Marketers Are Preparing For This New World ....................................................................................................................... 8! Key Recommendations: Marketers Must Build A Broad Set Of Competencies....................................................................... 14! Methodology......................................................................................................................................................................................... 14!

© 2012, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to www.forrester.com. About Forrester Consulting Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit www.forrester.com/consulting.

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Executive Summary: Use Of Mobile Is Tactical, Not Strategic, In Marketing Mobile is the catalyst for seismic changes in how brands will engage with consumers; these will create both new opportunities and challenges for marketers. The majority of mobile marketing spend today has been a reflection of desktop, primarily focused on advertising or anonymous consumers. With the potential intimacy and rich context offered by mobile, however, the true potential lies in the acknowledgement that mobile is a unique channel on to itself and a significant opportunity exists not only in advertising but also lower-funnel marketing or engaging with existing customers. In August 2012, Velti commissioned Forrester Consulting to evaluate the state of mobile marketing and advertising in the United States. To further explore this trend, Forrester developed a set of hypotheses that tested the assertion that marketers are spending the majority of their mobile efforts on initiatives that mimic desktop campaign planning and as a result, neglect the opportunity to develop the competencies they will need to take advantage of the mobile platform in two to three years’ time. In conducting in-depth surveys with several agency professionals guiding the mobile marketing strategies for their clients and 150 mobile marketing professionals within consumer product companies, Forrester found that the majority of mobile marketing tactics employed were upper-funnel branding and promotions, i.e. spray & pray, that focused on acquisition; the majority of mobile marketing spend was on advertising; and few mobile marketers were developing strategic, long-term plans to build a holistic mobile marketing competency. Too few are taking advantage of the unique opportunities offered by mobile.

Key Findings Forrester’s study yielded three key findings for mobile marketers: • Most mobile marketing spend is allocated to upper-funnel tactics. Among the executives surveyed, 90% use

mobile advertising tactics, while only 48% use mobile marketing tactics to engage with their customers. Among the executives interviewed, 33% self-report using mobile advertising tactics more often than mobile marketing tactics. • The planned use of context falls short of its potential. Mobile phones are personal devices — not shared

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Base: 150 mobile marketers Source: A commissioned study conducted by Forrester Consulting on behalf of Velti, August 2012

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KEY RECOMMENDATIONS: MARKETERS MUST BUILD A BROAD SET OF COMPETENCIES Marketers must pursue a multi-pronged approach today to build the competencies necessary to leverage mobile to achieve marketing objectives — especially those marketers who self-identify as newbies or who have limited experience. They must develop a tactical plan to bridge the gap. If you are a marketer, this paper can serve as a benchmark to help you assess your readiness versus the internal competencies you need to take advantage of the opportunities that mobile offers. Mobile marketers positioning themselves for future success will: •

Understand consumer behavior across screens. Consumers are ingesting media across a growing number of screens — from portable devices such as mobile phones, eReaders, and tablets to TV screens, which will become interactive. Marketers must consider not only how consumers use these devices differently but also how they use them in parallel. Only 54% of marketing executives surveyed were leveraging data from multiple screens to build customer profiles.

•

Embrace mobile as a unique, full funnel medium. The intimacy and contextual relevance offered by mobile devices gives marketers the ability to “get to know” or build profiles of individual customers. There is a cost associated with the opportunity. First, marketers must create holistic profiles that go beyond mobile device usage. Second, marketers must devise good reasons to engage with customers frequently.

•

Develop both strategic and tactical plans to utilize context. The use of context is basic among advertisers today; other than information directly provided by consumers, context is primarily limited to location. Few marketers are thinking ahead to new contextual elements or how to use context to offer utility and simplicity — not just highly targeted advertising.

•

Build competencies either in-house or through strategic partners. There’s a broad range of strategic and technology competencies that marketers must build or have access to through strategic partners. Too few marketers are looking to build in-house competencies to support strategy and services development.

•

Create new business rules based on real-time data. Vendors have touted the ability to engage with consumers in exactly their moment of need. In reality, few consumer-facing companies have the ability to act on the information that they already have — let alone information collected in real time, such as a check-in or an in-store barcode scan.

•

Work with product teams to extend the reach of marketing beyond purchase. The definition of marketing is expanding to encompass the entire consumer journey. Mobile opens up the opportunity both to launch entirely new products and services as well as to enhance existing services, products, and consumer touchpoints in the channels.

•

Work closely with internal technology teams. Future mobile services will depend heavily on infrastructure and services. Marketing professionals will need not only customer profiles but also real-time access to data in reservation systems, accounts, loyalty programs, schedules (e.g. for buses or planes), pricing, product catalogs, etc. Long lead times are associated with building these capabilities. Marketing professionals will need multi-year services road maps and a close working relationship with their IT counterparts to capitalize on mobile opportunities in a few years’ time.

Methodology In this study, Forrester surveyed 157 US-based B2C marketers and agencies within the following industries: retail, automotive, CPG, travel, and financial services. All 150 marketeering companies we surveyed represent more than $100M in revenues, and the seven agencies represent $10M in revenues. The respondents were key influencers for the digital or mobile strategies within their company.

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