I went to a panel on mobile marketing last week hosted by MITX, the Massachusetts Internet Technology Exchange. The discussion was hosted by Roger Entner, Vice President, Wireless Telecom, Ovum and panelists included:

Andy Castonguay, Program Manager, Yankee Group
Erin Cole, Media Supervisor, Avenue A | Razorfish
Brian Costello, CEO, MaMoCo
Jeff Janer, COO, Third Screen Media
Michael Weaver, Senior Product Planner, Microsoft Digital Advertising Solutions

Roger introduced the discussion by saying that he thought we all agreed that mobile marketing was poised to really explode and that was why we were all attending the panel. But I must admit, I’m still skeptical on this point, and the issues raised during the panel only made me more so. Here are the current challenges with mobile marketing.

  • US Consumer adoption of mobile for applications besides making phone calls is still small. Granted, mobile data use is growing. My colleague Charlie Golvin, who focuses on consumer wireless technologies, says about 20% of mobile users browse the mobile Web and 50% use text messages. These are healthy numbers, but I don’t think any of us can deny that US mobile usage focuses on calling people, rather than around some of the commerce and content applications popular in Asia and Europe.

  • Mobile formats are small and difficult to use. This is my favorite picture of a mobile ad in action, taken off of Peter Kim’s blackberry. Besides the fact that the ad itself is very non-descript, it provides very little value. Even the most tenacious Cisco customers who happen to see – and click on the ad – get nothing but a directive to visit cisco.com.

  • Mobile_marketing_001 Mobile_marketing_002
  • Ad standards and metrics are ill-defined. Besides the mobile “banners” a la the ones Cisco is using, marketers today have scads of ways they can use mobile from text messaging offers, to developing mobile games, to encouraging users to photograph UPC codes of off packaging via camera phone. Of course no standards bureau is in place today to standardize the “what” and “how much” for any of these formats. Likewise, tracking the results of mobile efforts is challenging today. Erin Cole from Avenue A | Razorfish mentioned that several of the retailers she works with are trying mobile couponing, but must develop creative ways to track redemption rates because existing POS systems can’t read mobile coupons.

  • The carriers have great control over mobile content, ads, and customer data. In the mobile marketing environment, there are three major constituents: 1) Content companies, like ESPN that are creating channels or information to be delivered via wireless devices; 2) Advertisers who want to use mobile content to help them deliver relevant ads; and 3) Wireless carriers who ultimately have responsibility for the technology that allows consumers to receive mobile content and maintain all of the registration and interaction data about their users. The economics of how ad revenues should be split between content companies and carriers is still a work in progress.

Now I do think there is opportunity for marketers around mobile, but there are some definite hurdles to overcome before the medium really explodes as a marketing channel. Charlie Golvin and I will be answering how big a deal mobile will be for marketers and when we expect it to really take off in a research report later this year. Stay tuned. In the meanwhile, here are a few things we think must happen for mobile to move past its current experimentation phase. What do you think?

  1. Growth in applications for the phone. Right now consumers aren’t using much on their phones besides voice, in part because there isn’t much for them to use. Proliferation of mobile applications (like mobile mapping) will initiate a virtuous circle leading to increased consumer mobile data use which will in turn lead to demand for more mobile applications.

  2. Marketer understanding of what Charlie calls "information half life." Not every marketing message is a relevant one to push via mobile. If a marketer’s offer or message is extremely timely or expires quickly it is right for mobile. However, if the message is a general, more timeless one, it would be better delivered over a less immediate medium.

  3. Development of mobile ad standards. This is a big one, which I don’t expect to be very easy. We’re looking for the Mobile Marketing Association to develop governance over mobile marketing. One step toward standards is the introduction of the new .mobi domain – a new mobile-specific domain which would provide a way for Web pages to be formatted uniquely for mobile devices.

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