Mobile Marketing and Analytics. Nathan Harder ICT Analytics

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1 Mobile Marketing and Analytics Nathan Harder ICT Analytics Fall 2012

2 Harder 2 Mobile Marketing is a growing trend with the explosion of smartphones worldwide. According to an article in Wireless Week there were 76.8 million smartphone users in the US alone at the end of May 2011, which was up 11 percent from the previous three-month period (By The Numbers, 2011). According to a more recent article in CRM Magazine we are approaching half of Americans owning smartphones. In 2010 Morgan Stanley predicted by the end of 2012 sales of smartphones would exceed PC sales and Gartner research predicts the sale of tablet computers will exceed PC sales by 2015 (Aquino, 2012). All of these smartphones are powered by the Internet. I cannot speak for everyone in the country, but many of my friends and I agree that Internet is a must and we would be willing to give up other services like cable television before giving up Internet access and our smartphones. If you look at the growth of smartphones there is a good chance my small sample represents the attitude of the rest of the. Even during a recession number of smartphones is growing. According to CNET overall sales of smartphones has increased 9 percent between Q and Q Smartphones are reaching the hands of lower-income families with less than $35,000 in household income as well. Q2 of 2012 showed 33 percent of sales were to people in this income level. 70 percent of these were prepaid, which is relatively new for smartphones (Whitney, 2012). This is probably due to prepaid phones and service not requiring a credit check or contract which makes them easier to purchase.

3 Harder 3 (Whitney, 2012) Overall mobile advertising revenue has been increasing exponentially over the years in response to the growing number of smartphones in the United States and throughout the world. According to Gardner, 3.3 billion was anticipated to be spent on mobile advertising worldwide in 2011, which was double the spending in They also predict it will grow to 20.6 billion by 2015 (By The Numbers, 2011). Mobile is predicted to drive the next wave of advertisement according to Suresh Narasimha of Telibrahma. He predicts mobile usage in the store is going to increase through the use of loyalty programs, coupons, and video to engage the customer during their shopping experience (Narasimha, 2011). Many apps for phones are free, especially for Android. According a 2011 report from the app analysis company Distimo, out of the roughly 340,000 apps in the Google

4 Harder 4 Android Market about 230,000 were free and out of the roughly 440,000 apps in the Apple App Store about 190,000 were free (Koekkoek, 2011). My boss always says that nothing is free and he is right when you look at this from the customer perspective. Almost all of these so called free apps have ads imbedded in them so the developers can make money while offering them for free. In most cases the ads are not annoying in my opinion. If you do not want ads you can pay for your apps. There are two ways this works. You can pay for an app when you download or you can download a freemium app that is free to download, but you have to upgrade to the premium version in order to add more features and/or remove banner ads. The freemium apps are becoming quite popular. According to Distimo 50 percent of revenue in 2011 for the Apple App Store came from freemium apps and 65 percent for Google (Koekkoek, 2011). Freemium is a win win for the customer and the app designer. The customer gets an app with ads or limited features for free and the designer gets add revenue. If the customer pays for the extra features and no ads, the designer still gets revenue and the customer gets the ad-free app or features they desire. Even though apps and advertising for apps is growing exponentially right now, some say that new web standards are going to allow the creation of such robust mobile sites that it will cause the need for installed apps to decline. This is due to HTML5 which is the new generation of programming. This will allow the server to do the heavy lifting rather than an application on the phone. Right now applications must be written for each phone operating system such as Android or ios. With HTML5 it is not necessary to write an application for each phone. If the site is written to conform to the HTML5 standard it can be displayed on any phone with a web browser that supports

5 Harder 5 HTML5 (Korkmaz, 2011). Even though this transition may occur it shouldn t change the demand for mobile advertising because it will just be built into the site instead of an app. During the past year or so a new trend has sprung up in most large stores and in printed publications. It is the use of Quick Response (QR) Codes. They are square twodimensional icons that look similar to a standard barcode but they hold more information. If you click on a QR Code it can bring you to a web page for the product so you can read reviews, watch videos, etc. It could also take you to a coupon or bring you to a page to sign up for a drawing. All you need to do this is to install a free reader on your smartphone (Subhadip, Sneha, & Varsha, 2012). QR Codes can be a great addition to your marketing efforts because they can bridge the gap between traditional marketing campaigns, like newspapers and magazines, and your online campaign. They can easily drive customers to your site and the number of scans can easily be tracked. You can customize each code for each separate print advertisement so you can easily report on which marketing effort is driving the most potential customers to your site. Stores can benefit by using these for in-store promotions or just as a way for customers to view more information about a product than what can be displayed in the store (Tolliver-Walker, 2011). According to two of the scanner software providers in 2011 scans were up considerably. ScanLife went from 10 to 60 scans per second between April and June and ScanBuy showed an 810 percent increase in overall scans (Tolliver-Walker, 2011). Even though there are statistics showing an increased use of QR Codes, critics don t believe this trend is going to continue as an advertising tool. The codes are often misplaced. They have been on billboards, inside bottles, and in airplane magazines where there

6 Harder 6 might not be any data access available for your phone. They often only take you to a web site that isn t even tailored to the product. They also have not done a good job of selling the technology to the world because a lot of people still don t know what they are for or are not interested. According to Forrester Research, only 5 percent of Americans scanned a QR code between May and July last year (Milian, 2012). I personally have never scanned one even though I know what they do. Others believe this technology is going to be replaced by technologies such as Near Field Communication (NFC), which allows a mobile device to pull up information from a tag through wireless technology and an app on your phone. This will be a lot easier to use than QR codes because you will just have to be in range of the device (QR codes versus NFC tags). According to my research and personal experience the world of mobile technology and advertising is rapidly changing and growing. A trend today can be gone tomorrow. This is such a challenge from a marketing perspective because marketing departments in organizations need to keep up with the latest trends and decide where to carefully spend their limited resources. Making mistakes in this area can be a hardship financially, but not getting on board with mobile advertising is most certainly a poor decision.

7 Harder 7 References Aquino, J. (2012, January). 5 Hot Marketing Trends. CRM Magazine, pp By The Numbers. (2011, 7 18). Wireless Week, p. 24. Koekkoek, H. (2011). Distimo Publication Full Year Distimo. Korkmaz, B. (2011). How new Internet standards will finally deliver a mobile revolution. McKinsey Quarterly, pp Milian, M. (2012, January). How ridiculous are QR codes. Bloomberg Businessweek, pp Narasimha, S. (2011, July). Mobile will drive the next wave of advertisement. Siliconindia, p. 21. QR codes versus NFC tags. (n.d.). Retrieved November 17, 2012, from NFC: Subhadip, R., Sneha, N., & Varsha, J. (2012). Effect of QR Codes On Consumer Attitudes. International Journal of Mobile Marketing. Tolliver-Walker, H. (2011, December 12). Making Best Use of QR Codes: Gleaning Lessons. The Seybold Report, p. 11. Whitney, L. (2012, August 8). Apple, Samsung U.S. smartphone sales jump 43 percent. Retrieved November 17, 2012, from CNET: