Mobile. What Marketers Should be Doing in 2012

Mobile What Marketers Should be Doing in 2012

Agenda 1. What s fueling mobile right now Key trends to understand that will make a big difference in your mobile plan 2. Merkle Mobile IQ Index Index of more than 20 leading brands What makes them successful Examples 3. What marketers should be doing this year The Four Pillars Audience and personas Heat map of mobile marketing tactics based on the audience Connected CRM 4. Case studies with results 5. Tips 2 2

What s Fueling Mobile Right Now Key Trends to Understand, Ways to Engage the Consumer 3

Consumers are mobile 32% In 2011, one in three Americans used a mobile device to access the Internet every month (emarketer) About 16.2 billion mobile apps will be downloaded in 2013 compared to 3.5 billion in 2009 (FutureSource) 4.6x 91% In the USA, 9 of 10 US citizens own a mobile device and 66% are regular users of SMS (emarketer) In 2011 PayPal increased mobile transactions to $4 billion compared to $750 MM in 2010 (Smartbrief) 5.4x 4

Mobile internet adoption Mobile internet adoption faster than radio, tv, and the internet! Source: Radio penetration data per Broadcasting & Cable Yearbook 1996, Internet penetration data per World Bank / ITU, Morgan Stanley Research 5

The mobile tipping point happened last year More mobile devices are shipped than PC s. Source: Katy Huberty, Ehud Geiblum, Morgan Stanley Research 6

ipod, iphone, ipad consumer demand ipods changed the media industry, iphones ramped even faster, ipad growth leaves siblings in the dust. Mary Meeker Source: Mary Meeker, Kleiner Perkins, Internet Trends 7

Android ramping faster than Apple Android is the smartphone operating system for the masses. 8 Source: Mary Meeker, Kleiner Perkins, Internet Trends

Are iphone and ipad consumers more valuable? Operating System Market Share 52% of mobile internet traffic is from ios, while Android trails at 16%... "Apple consumers are Digital Omnivores Source: Netmarkettrends 9 9

Mobile commerce lift off! Over $11 billion in transactions processed from these 5 brands in 2011. Source: Kleiner Perkins,Top 10 Internet Trends, Mary Meeker 10

Mobile search growth Google represents 93% of all mobile search. Mobile phones and tablets account for 8.2% of total browsing. Many brands find that mobile represents a 10 25% share of internet traffic. Source: Google 11

Consumer shopping behavior Mobile is becoming a central part of the shopping funnel. Brands without a well-developed digital strategy are not only missing a tremendous opportunity with these customers but also risk becoming obsolete. Types of Products Purchased Location 47% 56% 37% 35% 34% 34% 32% 31% 29% 26% 24% 24% 42% 42% 37% 36% 21% 19% 13% Home Outdoor Work Traveling In Store Source: Custom Mobile Retail Advisor Survey Response 2011 12

Consumer engagement marketing tactics Text messaging, downloaded apps, and browsing lead the way for consumer usage. 71% 42% 42% 31% 29% 21% Sent a Text Used Downloaded Apps Used a Browser Accessed Social Networking or a Blog Played Games Listend to Music 13 Source: Netmarket Share, 8/11

Merkle s Mobile Index & Leading Brands Mobile IQ Index and Good Examples 14

Merkle Mobile IQ Having a high mobile IQ is mandatory for the marketer s success. It s not something you are inherently born with; it needs to be cultivated over time based upon experience, best practices and a sustained focus. The Merkle Mobile IQ helps build a strong, permission-based marketing foundation helping to enable a meaningful and profitable relationship with consumer. 15

Approach & common themes 16 Approach Benchmark & Tracking: Mobile IQ Index assesses mobile programs and serves as a way to track brand programs over time Scoring Methodology: Scoring is based on the criteria associated with each of the 4 pillars - Strategy, Media Integration, Mobile Marketing Tactics, and Connected CRM Three Categories Emerge: The Index scores more than 20 brands ranging from emerging to intermediate and advanced Common Themes Vertical Lens: Certain verticals such as Retail, CPG, Travel, and Entertainment generally demonstrate the adoption of mobile marketing ahead of others such as FISERV, Non-Profit, etc. Customer-centric Approach: Few brands are executing well across the 4 pillars, however, those that do maintain a customer centric marketing approach - moving away from mass marketing to a one-to-one approach Evidence that the 4 Pillars are Supported by a Solid Foundation: Advanced and most Intermediate level brands have established a solid foundation of mobile marketing tactics mapped to the target audience Connected CRM: Brands that have connected mobile data to the customer marketing database are able to segment and target audiences, leading to personalization

Merkle s Mobile IQ Index of Leading Brands Emerging Intermediate Advanced 140 120 103 108 109 112 118 122 126 128 130 100 83 84 85 88 90 91 80 70 60 47 47 51 51 55 56 58 59 40 19 20 28 31 32 20 4 6 6 0 17 Source: Merkle Mobile IQ. Brand scores based upon consumer facing mobile programs in the United States.

Best Buy One of the top brands within mobile today, Best Buy takes a 360 approach to integrating mobile into all media. This includes tactics such as mobile commerce, apps, mobile internet, SMS, preference center, QR codes, LBS, RFID, NFC, AR, etc... 18

Starbucks Also one of the leading brands in mobile, Starbucks has a mobile strategy the focuses customer preference and convenience. The mobile loyalty program is an extension of the CRM strategy works with the loyalty card and is tied into commerce. 19

Delta Delta now offers completely mobile travel, anytime, anywhere with the recent release of apps for all device types, mobile internet site, and SMS that sends the boarding pass attached to a QR code. 20 20

Target Target is by far a leader, understanding that offline and online shopping has blended together. Digital, especially mobile, has been included in all customer touch points. There is a complete understanding of the target audience with continually improved mobile marketing tactics. 21

Target The mobile preference center on the site allows consumers to pick how they want to engage with Target. From SMS alerts (based on time zone), to apps for all devices types, mobile internet site, and QR codes to enhance the shopping experience Target provides a full suite of ways consumers can connect. 22

Home Depot Over the last several years, Home Depot has been a brand to watch within the mobile space. They have established a killer QR code program for in store/out of store shopping and reviews that ties to the how-to program. Home Depot provides content that focuses on consumer needs to have a better shopping experience. 23

JCPenney One of the most well rounded and consistent retailers within the mobile space that integrates mobile into key media channels. JCPenney has built a solid foundation of apps, SMS and mobile internet, however, continues to test and innovate to see what works best for their audience. 24

JCPenney Regardless of media, the consumer always has an opportunity to join the mobile club. JCPenney is the only brand that sends out loyalty club reminders, helping to maintain a robust mobile marketing database. 25

How to Develop and Advance a Successful Mobile Program 26

Four pillars of mobile marketing and planning 1 Mobile Marketing Strategy Successful mobile programs tie directly to marketing objectives. Review of consumer profiles, marketing strategy, and business goals to develop the overarching mobile strategy, value proposition, & roadmap. 2 Mobile Marketing Tactics Implement proven mobile marketing tactics that deliver results. Review of the consumer profile and segmentation data determines the primary mobile tactics to reach and engage the largest consumer share. 3 Media Integration Integrate with key media and channels. Review of the media / promotional calendar to determine the optimal channels to integrate the mobile call to action. 4 Connected 27 CRM Connected CRM. Can be a phased approach until mobile reaches scale. All data capture stored in the mobile database, can be connected via disposition files or two way, real-time feed integration. This provides the ability to segment and target consumers. 27

Define and segment your audience We generally see three mobile personas. Think about skating toward the puck we ll see penetration of smart phones and adoption of tactics increase rapidly. Touch Screeners Straight Talkers Green Thumbs 28

Group 1: Touch Screeners 18 34, Gen X and Y, Small kids Influenced by trends, i.e., what s hot Heaviest smart phone penetration Nearly half say making a lot of money is important 96% more likely to download mobile applications 105% more likely to receive coupons 101% more likely to check financial accounts 103% more likely to scan QR codes 90% more likely to watch video on their mobile device at least once a day 45% research products for purchase on their mobile device at least monthly An average of 25% purchase products using mobile devices at least monthly. Likely to be low-involvement purchases, e.g., music, books, etc. 29

Group 2: Green Thumbs 24-44, Gen X and Y, Small kids Moms tend to shift their online habits to mobile habits, due to time constraints and flexibility Spends majority of spare time with family. 90% say that family is most important in their life 62% access the mobile internet on a monthly basis 45% More likely to receive coupons 31% More likely to enter a contest/sweepstakes via SMS 27% More likely to send/receive personal email from their phones several times per day Love mobile gaming 30% research products for purchase on their mobile device at least monthly An average of 17% purchase products using mobile devices at least monthly. Likely to be low-involvement purchases, e.g., music, books, etc. 30

Group 3: Straight Talkers 35-54, Gen X and Boomers w/teenage Kids Remarkably average group, with few motivations. Distinctly different than Green Thumbs Spends majority of spare time with family. 88% say that family is most important in their life This group will advance the most over the next 12 months due to phone upgrades 14% More likely to access mobile web on a monthly basis 11% More likely to receive coupons 13% More likely to enter a contest/sweepstakes via SMS 21% More likely to send/receive text several times per day More mobile phones and connected devices in the household now. 240% more likely to 5 or more in household 24% research products for purchase on their mobile device at least monthly An average of 14% purchase products using mobile devices at least monthly. Likely to be low-involvement 31

Mobile tactics heat map based on personas Align marketing tactics for maximum effectiveness and ROI. Mass market tactics Niche market tactics SMS Voice Mobile Web Social Mobile Email Mobile Search Apps Games Display Advtg. Scannable Codes MMS Touch Screeners (Age 18-31, no kids) Green Thumbs (Age 25-44 w/small kids) Straight Talkers (Age 35-54 w/teenage kids) Heat Map: Legend High Medium Low 32

Example of a Text Messaging Touch Stream Customer Contact Stream Start to determine customer value - High, Med, Low based on redemption results & control groups Mobile survey to establish preference - drive to Rewards preference center Establish new tactics and offers based on preference & behaviors of rewards and non rewards members New customer ops-in to mobile program & receives a welcome message with a unique redemption code 1. Redeemed codes: Send new offer with unique code 2. Non-redeemed codes: Send reminder message about to expire Survey all members with an offer SMS or mobile landing page Thank you message with offer 1. High 2. Medium 3. Low Urgency reminder message to non responders control group NEXT PHASE Day 1 Day 5 Day 12 Day 13 Day 20 Day 25 Day 30 1 New customer record created or existing customer record is appended with mobile number 2 Match Customer Database redemption code to customer record and build customer profile Change message content and cadence based on redemption activity 3 Further define target segments by establishing high value groups for both Rewards and non-rewards members Message based on group and preference 4 While running overall opt-in group message program begin executing new mobile marketing tactics and offers resulting in additional data attributes and data capture. Determine response and engagement rates. 33

Connecting mobile data to the CRM Mobile Data Capture Non-integrated data Data often sits in many databases - with the mobile providers No standard approach for data capture or measurement Data can be thrown away or forgotten when campaign expires Mobile Database Integrate data through disposition files or feeds Aggregates data from multiple mobile sources into one database Enables multi-channel reporting Mobile segmentation may start here Connected CRM Integrated through one data feed. Forwards multi-channel mobile data to Customer Database Results in multi-channel segmentation and analytics Example: Coordinated direct marketing among Email, Mobile, Web channels Mobile Database Customer Database 34

Building the customer profile Text Messaging Key Tactics Organic growth of mobile alert groups lists through opt-in Mobile Internet Site Enables mobile optimized search and brand presentation Downloadable App Table stakes for the smartphone audience Important Mobile Data Capture Mobile Phone Number Phone Type & Carrier Location Usage Behavior Overlay Mobile Data to Develop Customer Profile Reverse Append Opportunities Wireless Carrier Subscriber Data WWW / Mobile Internet Usage Behavior Demographic and Profiling Data Location Driven Marketing Push Marketing Notifications QR Codes Gives legs to traditional media such as print, direct mail, etc. Preference Center Enables the consumer to share preferences and enables early stage targeting Interactive Advertising Direct Mail Open Rate Segmentation 35 Optimize Offline Media Spend Improve Acquisition Funnel Permission Based Targeting - Likes and Dislikes 35

Case Studies 36

The K&G Mobile Rewards program increases visits and revenue. Matt Stringer, VP Marketing needed a mobile marketing program to drive customers to the store Through strategy and planning, Merkle determined that text messaging would be the best way to reach and engage consumers We launched the K&G Mobile Rewards program Text SAVE to 79999 Current Instant Win Program In Store How to Flyer 37

Mobile is now a key pillar in the marketing plan Mobile is the only way to reach over 100,000 K&G Rewards customers 40% of Rewards customers joined the mobile program Mobile Rewards customers are worth at least $30.00 more per year in incremental revenue Overall, 66% are existing customers, 33% are net new customers Mobile Program Results from 2011 Start Date: February 2011 Stores: 107 Mobile List Growth Weekly: 4,000+ Total Members: 180,000+ Mobile Coupon Redemption Rate: Mobile Opt-in, Annual Value: Year 1 Gross Revenue: 94% $108.19 $18,536,000 38

1 K&G Mobile Rewards Program Call to Action 2 3 at Text Message Opt in Experience and Trackable Redemption Code Consumer Redeems the Point of Sale Offers and Response Rates $5.00 off 94% 20% off purchase 45% 30% off regular price 20% $20 off purchases of $100 1% 15% off purchases of $150 or more 0.01% 39

The LB MSG ME mobile program is a key pillar of the marketing strategy, driving significant revenue at the store. A key pillar of the media mix and integrated with all offline and online marketing pillars Over 360,000 active mobile opt-ins with a less than 3% opt out rate 2011 revenue goal beat by 49% for over $49.5M in mobile revenue Mobile drives instant foot traffic at the stores 40

Solution: Mobile Marketing Strategy, Personas, Media Integration Planning, Mobile CRM Managed Service Campaign Execution, Management and Reporting SMS, Mobile Internet, Mobile Preference Center, Scannable Codes, Sweepstakes Store level segmentation and tracking Facebook app tab mobile alert signup Mobile Program Results from May 11 Start /End Date: May 9, 2011/May 24, 2011 Stores: 650 Daily SMS List Growth: More than 5,813 new opt-ins each Day Total Members: 100,000+ Mobile Coupons Sales: $7.2 million 41

Tips for Marketers 42

Tips for marketers 1 Make sure the four pillars are in place: Successful mobile marketing strategies include strategy, media integration 2 Integrate mobile with offline & online: It works well when integrated with other channels. 3 Begin with a connected CRM approach: Connected CRM results in segmentation, targeting and deeper engagement. 4 Invest in the right mobile marketing tactics: Implement tactics based on your target audience for maximum effectiveness 5 Work with a scalable partner: A good partner will help you sensibly evolve mobile, while observing consumer privacy policies 43

Roundtable Questions Discuss your Mobile IQ Should mobile be treated as a media, channel or both? Where should mobile sit within your organization? Marketing or CRM? 44

Chris Wayman VP GM Mobile 561-350-3181 cwayman@merkleinc.com