Mobile Advertising and Marketing USA
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1 Mobile Advertising and Marketing USA Consumer Acceptance Understanding Subscriber Receptivity (A peek behind the curtain) Prepared by: Judith Ricker Joseph Porus Division President VP and Chief Architect Marketing Communications Research Technology Research March 2007
2 Table of Contents Introductions Our Unique Perspective Today s Objectives Methodology and Sampling Putting the Findings in Context - Technology Trends - Advertising Fundamentals for Mobility The Findings and Implications
3 Who is Harris Interactive? Full service global market research firm with 40+ years experience. Recognized as the pioneer in Internet-based research methods. Serves hundreds of Fortune 500 companies via traditional and online research methods Brand and Communications solutions delivered to B2B and B2C segments Conducts more Research on Internet Research than any other company in the world, and is the leader in the science and technology of Internet-related market research. Conducted over 67 million interviews around the world >12M in 2006 Invested over $70M in intellectual and technological capabilities to become the leader in using the Internet to conduct research
4 Joseph Porus - Who is this guy? The early years Engineer with The wrong profile (Dean of Students - Lehigh University) AT&T / Bell Labs - Engineer / Designer, Data Specialist, Product Management - Business Systems, Micro Electronics, Human Factors Design Highlights: Pebble Beach, EPCOT, CIA, US. Navy, 1 st Robotic Factory Market Research based on Frustration Pricing Strategy, Product Line Optimization, Product Line Planning Lucent Wireless - Price Elasticity, Segmentation, Product Design, Customer Loyalty and Satisfaction, End User Research, Competitive Analysis Research Architect Results driven based on Telecom DNA A potent blend of industry expertise & researching skills with a client side orientation
5 Judith Ricker - The Untold Story The early years Degrees in music performance and education form the Eastman School of Music Professional orchestral oboist and teacher Back to School and the Road to Market Research at the Eastman Kodak Company Digital product forecasting and market analysis New product development, competitive positioning, adoption and loyalty research Emerging markets and scenario analysis Brand and Advertising research leading to Gold Effie Award On to Innovation Harris Interactive Founded Marketing Communications practice Innovative Communications solutions Pioneering validated Consumer Connection approach
6 Study Objectives Examine consumer acceptance of mobile advertising What s the level of interest? What incentives will work best? What kind of ads are most desirable? What about media and format? Privacy and Profiling issues? Will profile based advertising be accepted?
7 Background Each quarter, Harris Interactive conducts research on hot topics facing the Technology industry Analysis of current industry trends and challenges Questions from industry insiders on future research to ensure the topics are relevant What you don t know could hurt you! We interview ~1,000 consumers from our multi-million person online panel The purpose is to bring value to our clients by dissecting data from every angle, enabling us to deliver not just information, but true, actionable insight Simply stated, our difference is what we discover This quarter, the focus was on Consumer Sentiment to Mobile Advertising
8 Methodology Respondent Qualifications: Reside in the US Age 18+ N=903 Note: This study is with adults only. Youth market expected to be huge for mobile advertising (these results could therefore be conservative). Weighting The data were weighted to reflect the total U.S. adult population. General Information An Internet survey was administered to members of the Harris Interactive Online Database in February Data collection was conducted entirely online. All results are weighted; sample sizes unweighted
9 Technology Trends (Putting mobile advertising trends in context) The Perfect Storm ( ) PC - the second screen Web - higher viewership than TV Cellular two times more phones than PC s (the 3rd screen) Mobiles the most personal device in history Reflection of who we are (the 24 month renewable self image) Mobiles redefined after 9/11 (a phone on steroids) The new remote control of our lives (Apple iphone and beyond) The m- Society Wireless only households and businesses on the rise (13% today, 50% considering)* Hottest m- trends (banking 39%, watching videos 26%, GPS services 25%)* (fundamental behavior change) 4G ( Everything, all the time ); What they want next (GPS Navigation 57%, Watch exclusive Premium channels 41%, Ads based on location 41%)* * Data from Harris Interactive Technology Webcast 12/2006
10 Wireless: Changing our Social Fabric Agreement Level - Top 2 Box My cell phone is a sense of security for me 41% The prolonged 9/11 Effect Cell phones are now my primary form of communication Cell phones are ultimately a more personal, direct form of communication as compared to traditional phone service Cell phones have created an invasion of privacy Cell phones must evolve to be based on different platforms My cell phone is my business connection 24% 20% 15% 15% 13% A societal change A sneak peak at the future My cell phone is a source of personal entertainment for me 8% Base: Current Mobile Phone User (n=857) Q - Please indicate how much do you agree or disagree with the following statements. Please use a scale from 1 to 7, where 1 means Not Agree at all and 7 means Completely agree.
11 So. How can we continue to talk to consumers during this period of change? The purpose of marketing communications is to build or strengthen the bond between the brand and the customer Regardless of media, we can never loose sight of that fact Every touch point must focus on enhancing the relationship between the consumer and the brand
12 Integrated Communications It is critical to understand how each medium and each creative treatment contribute to building that bond, and to ensure that the campaign strategy is tightly integrated across media
13 Is the Strategy of the Mobile Campaign to Communicate? a brand message Brand? identification Three Key Elements Persuade? to an attitude or behavior
14 Important to Remember Each element of the communication fabric can work across any or all three dimensions, therefore each execution may have a different express purpose. Branding? Communication? Persuasion? What are we trying to achieve with our mobile campaign, and how does it fit into brand strategy?
15 Connecting to Consumers is Key Understanding how each mobile ad moves target consumers toward (or away) from the brand is critical. In the end, the success of any communication is how well it connects the customer to the brand.
16 Finally. Never forget Good advertising is Good advertising Regardless of media!
17 Research Findings What Consumers Are Thinking 2007 Harris Interactive Inc.
18 Who s Interested in Receiving Mobile Ads? Interest in receiving ads Not at all interested 90% Somewhat interested 4% No surprise, about 90% said No Cigar Interested Very interested 2% 1% However 9% expressed interest! (Recall there are over 240 million cell phones in the USA) Extremely interested 2% Base: Current Mobile phone user (n = 903) Q - How interested would you be to receive advertisements on your cell phone? Interested group (Top 3 box) is more likely between years of age and in the $15,000 and 24,999 category.
19 Incentive-Based Ads The Plot Thickens Interest in receiving ads if incentive Not at all interested 64% The 90% disinterested drops to 64% Somewhat interested 21% which creates 2 segments to consider Interested 8% 21% Potential Viewers 14% Targets Very interested 3% More about those interested Incentives entice younger generation. With incentives, interested people more likely to be age Extremely interested 3% Base: Current Mobile phone user (n = 903) Q - How interested would you be to receive ads on your cell phone if some incentives were offered by the cell phone provider in return? Small group of are also interested People with incomes between $125k - $149,999k were not interested at all before; With incentives this % increases to 13% from 0% Mobile broadband users are also likely to receive ads with incentives (top 3 box 26%)
20 A Historical Perspective on Incentive Based Mobile Ads Willingness to watch advertisements on mobile phone 7 - Very willing 6 7% 10% Current data shows 35% willing very consistent with these results from several months ago % 12% 6% 6% 38% will accept ads with free applications but More work needed on what the value needs to be Not at all willing 51% Q - How willing would you be to watch advertising on your cell phone if in return you were to receive free applications for your cell phone? Base: Current Mobile Phone User (n=857)
21 Interest in Types of Ads Vary Specific areas of interest (e.g., sports, entertainment, travel) Type of ad 53% Males are more likely to prefer Ads based on specific areas of interest. Specific vendors or brands Daily consumable products (e.g., soap, toothpaste) Discount coupons Location specific 34% 41% 39% There are multiple roads to success Understanding market segments is key! Time driven (e.g., received at lunch time) 22% The sleeper. Other 13% Base: At least somewhat interested to receive ads (n = 344) Q - What kind of advertisements would you like to receive on your cell phone? Please select all that apply. Not all consumers have thought this through yet!
22 Special Requested Ads- In Demand Interest for special requests for ad content Not at all interested 24% Somewhat interested 39% Lukewarm another 39% Interested 29% Very interested 5% Relatively strong demand from 37% Extremely interested 3% Base: At least somewhat interested to receive ads (n = 344) Q - How interested are you in a feature that would let you put special requests for ads (e.g., If looking to buy a new car, you can put in a request to receive hot deals on Honda in your zip code for a specific amount of time)?
23 How Can your Target Audience be enlarged? Incentives to overcome barriers Ability to opt out 66% Choose type of ads received 56% Choose number of ads received in given time period 48% Provide profile of areas of interest so only specific ads are sent 43% Different/discounted plan if ads included 42% Choose specific times when ads would be received 40% Receive ads only when out of home 7% Several tactics may be effective Other Nothing can lower the pain Base: At least somewhat interested to receive ads (n = 344) Q - Which, if any, of the following can lower the pain associated with watching ads on your cell phone? Please select all that apply. The Minority Report- Science Fiction within reach? 2% 12% The bigger themes are consumer demand for: control, personalization and customization
24 What Type of Incentives May Work Best? Best incentives to watch ads Cash 78% Free minutes 63% Free entertainment downloads (e.g., ring tones, games) 40% Cash is king but Discount coupons Free music downloads Free information downloads (e.g., news, traffic, weather) 23% 29% 40% there is plenty of maneuvering room to be effective Free video downloads 16% Free Access to high end network features (e.g., GPS services) Base: At least somewhat interested to receive ads (n = 344) Other None of these 3% 5% Q - What do you perceive to be the best incentives for watching ads on your cell phone? Please select all that apply. 16% Recent activity: VISA and weather reports AMEX and The Weather Channel Microsoft and Business customers
25 Media of Choice: Some Surprises! Delivery Channel Text message 56% Text Messages top the list! Picture message 40% Video 24% Picture ads have nearly twice the appeal as videos Ads transferred automatically to Voice message 23% 22% Coming soon to your mobile: DVR, projection screens, custom platforms Deeper Dive into Demographics: Other 7% Students prefer text message as the channel Multiple person HHs prefer picture messages Base: At least somewhat interested to receive ads (n = 344) Q - In which of the following ways would you like to receive an ad on your cell phone? Please select all that apply. Single person HHs would like ads to be transferred automatically to the
26 A Historical Perspective on Promotional Text Messages Some of our previous research revealed a 21% level of interest in promotional Text messages higher than the 9% we found for all promotional ads. Interest in Receiving Promotional Text Messages to Cell Phone Extremely interested Very interested Interested 1% 1% 5% The 21% Solution. Somewhat interested 14% FACT: years are most responsive to text message promotions Not at all interested 78% Base: Current Mobile Phone User (n=857) Q - Would you be interested in receiving promotional text messages to your cell phone (assuming relevant to you)?
27 Privacy vs. Profiling A Balancing Act Willingness to provide personal information About 9% say YESunconditionally Yes but only if I could turn it off at any time 20% Yes - but I chose who receives my information 19% Yes but only for right incentive. 30 % Yes-I'd be willing to provide information 9% No-I would not be willing to provide profile information. 21% Only 21% say NO Base: At least somewhat interested to receive ads (n = 344) Q - Would you be willing to provide profile information about yourself to your wireless provider so that ads could be custom tailored to your needs? Wow! Nearly 70% give conditional yes to profiling!
28 In Summary The environment is ripe for the growth of mobile advertising Consumers will accept mobile advertising if: There is a pay-off / value proposition The ads are relevant They control what they get and how they are profiled Understand the objective of the campaign and how it will work to build the brand integrated with the entire communications strategy Good advertising is good advertising!
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