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Mobile advertising is a rapidly emerging form of consumer communication. As part of the marketing mix, it possesses several unique attributes. For example, mobile advertising is extremely personal, enabling highly targeted, one-to-one messaging. It also facilitates both push (to the consumer) and pull (from the consumer) marketing. Further, its impact upon consumer behavior can accurately be measured. Finally, almost all consumers have mobile phones, thus there is a limited capital cost associated with enabling the medium, as contrasted to the investment required to construct billboard signs or a digital signage network, for example. Because of these attributes, mobile marketing represents an outstanding opportunity to extend targeted messages to consumers while they shop. While estimates of the industry’s size vary, in 2011, mobile advertising spending was approximately $1.45 billion, and is expected to reach $2.61 billion in 2012.
It is noteworthy, however, that much of this growth is coming from mobile search, dominated by Google, rather than directed messaging.
This is not surprising, when considering the low rate of consumer trust in non-opt-in mobile text ads. In its recent Global Trust in Advertising Survey, for example, Nielsen found that unsolicited text ads were the least trusted globally (only 29 percent trust the medium, versus 50 percent when the consumer signs up to receive such messages). Factor in privacy concerns, and the ability of a retailer to deliver targeted mobile messages becomes a challenge. That is, the extent of their reach is limited to those consumers who may choose to opt-in. Consider, for example, that the Mobile Marketing Association in its 2011 publication, U.S. Consumer Best Practices for Cross-Carrier Mobile Content Services, advances how to address privacy concerns. These mainly revolve around the consumer actively opting in, and providing an easy way to opt out of receiving messages.
So how can retailers improve their ability to deliver mobile advertising messages to consumers? One way to consider is to combine the delivery of ads with mobile payment.
Juniper Research estimates that the transacted value of mobile payments will reach $670 billion by 2015, up from $170 billion in 2010. Mobile payment is convenient, secure, and lowers processing costs for the retailer, among other things. This growing market for mobile payment is predicated on consumer trust. Thus, if consumers trust the retailer with handling the payment process, perhaps they also will trust them with increased access to targeted ads delivered to the consumers via their phones. That is, opt-in is assumed by enabling mobile payment.
Mobile marketing offers great promise, but will be constrained by the device owners exercising privacy control over their phones. But when a payment process is undertaken, the consumer should be more receptive to receiving coupons, leveraging loyalty plans, and receiving offers from vendors that they are purchasing products from, while doing business with retailers that they trust.
Editor’s Note: Others do not necessarily share the same opinion as those expressed here. For example, Steve Gurley, a noted authority on mobile applications has stated that: “both payment and advertising are wrestling with their own set of deployment/utilization issues. Both are immature and mixing a discussion of the two is not really practical. Each could go in many different directions, thereby making the number of options and permutations just too difficult to address.”
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