Wednesday, June 30, 2010
Which Use of Mobile Is Right For You?
I've finally had a chance to digest the DMA's 2010 Response Rate Report and I'd like to share some of my take aways with you.
The DMA report is based on a survey of 473 members of - you guessed - DMA members. While the sample size is large enough to make inferences of the general population, the bulk of the membership of the DMA is probably different from...say...the Mobile Marketing Association. Hence no surprise that direct mail and email are the two most frequently used communication channels with 60% and 53% of survey respondents respectively using these channels. Only 6% of the survey respondents said that they were using the mobile channel (which includes both mobile advertising and text messaging). This tells me that mobile marketing is still an experimental medium - for members of the DMA that is. If I compare my personal exposure to marketers' messaging across the different media, I would say that this low adoption rate is fairly consistent across the board.
But low adoption rate aside, it's interesting to note that consumer engagement over SMS is much higher than over email.
According to the report, emails sent to a house list produced on average a 6.64% click through rate and a 1.73% conversion rate. In contrast, SMS messages sent to a house list produced over 100% higher engagement with a 14.06% average click through rate and a whopping 8.22% conversion rate. The conversion-to-click rate is another metric that I use for measuring engagement. It a good way to measure how compelling was my offer in the context of my message about the offer. On average, one out of every four people who clicked through in an email converted - meaning they accomplished some aspect of the marketer's goal (e.g. bought something, registered for a class, downloaded a prospectus, etc.). Engagement in the SMS channel was even greater with one out of every two people who clicked through an SMS message converting. Yes, SMS messaging is way more expensive than email. But with almost a 60% conversion to click through rate, the ROI of SMS messaging is highly compelling.
I interpret the higher consumer engagement in the SMS channel to a combination of the type of consumer that signs up for text messaging programs and the technology itself.
Another interesting observation from the response rate report is who's doing mobile marketing and who's not.
As one would expect, Publishing, Media & Entertainment, and Retail are the two industries having the highest adoption rate with 15% and 14% of survey respondents respectively stating that they are using the mobile channel for their marketing messaging. Interesting to note also is that none of the survey respondents that are in either the Financial Services or the Health Care & Pharmaceutical industries are using the mobile channel. Is this non-existent adoption just an artifact of the DMA membership represented in these two industries, or is this representative of the industries as a whole? I'm thinking that it might be the latter since these two industries represented almost 20% of the total survey respondents - so it's probably not just a statistical anomaly.
So why the low adoption rate of mobile marketing in Financial Services? The report may give some insights as to the reason. A closer look at how respondents in the Financial Services industry use each channel, it appears that they use the online channels primarily to drive traffic to their web sites for further information.
Making a financial decision is a thoughtful process that requires focused attention and one that takes time. None of these qualities fit the mobile channel. Mobile is all about immediacy and instant gratification, and the mobile web experience doesn't necessarily lend itself well to content-laden sites. Unless there is a sense of immediacy in a call to action and/or there is content that can be quickly consumed, then perhaps mobile is not the appropriate channel at this point in time for the Financial Services industry's marketing messages. So be careful about jumping on the mobile bandwagon. Just because it seems that everyone else is doing mobile marketing doesn't necessarily mean its right for your industry, your brand or your clients.
While the mobile channel may not be appropriate for Financial Service marketing messages, it is absolutely the right one for Financial Service transactions. In fact, this industry was a pioneer in transactional SMS messaging with text-to-access to account information including mini-statements, account balance verification, recent transactions, canceling lost or stolen cards, and ordering checks not to mention text alerts for recent account activity or passing of preset balance thresholds, and bill payment reminders.
The market for mobile apps on the iPhone, Android and Blackberry platforms is booming. At last count, there are over 300 "favorite" apps in the Financial category on iTunes so "thousands of smartphone apps for Financial Services" would be a ballpark guesstimate across all smartphone platforms worldwide.
With regards to cutting edge mobile payment technologies for point-of-sale and peer-to-peer services, once again the Financial Services industry is leading the way. Retailers and public transportation firms are introducing pilot programs whereby consumers can make purchases by merely touching their payment-enabled mobile device to a similarly-enabled point of sale device. (Of course, businesses in Europe and Asia have been doing this for years already.)
Mobile technology is transforming the way that people interact with their world and as a result, it is transforming the way that brands engage with their customers. Businesses have realized that though the mobile channel may not be appropriate for marketing messaging, it is clearly a strong channel that enables consumers to interact with their brands in other equally important areas. So it's not a question if mobile as a whole is right for you; rather it's a question of which use of mobile is right for you.
How many different ways is your brand using the mobile channel? Leave me a comment!