April 3, 2013

Q&A, Paul Berney, CMO and managing director, EMEA, Mobile Marketing Association

Posted by: in North America

Our latest report, “13 Mobile Trends for 2013 and Beyond,” is based around trends we spotted at the GSMA’s Mobile World Congress, held in Barcelona in late February, as well as interviews with mobile experts and influencers. One of those experts is Paul Berney of the Mobile Marketing Association, who has logged nine years in mobile marketing. He gave us a global perspective on how mobile is changing our behavior as consumers and how marketers are and will be responding, spotlighting some of the potential new ways that brands can connect with consumers.

Really broadly, what do you think has changed in the last year or so in mobile, as far as how consumers are using the phone and the approach of marketers?

It’s an interesting question, because to some extent nothing has changed, and then to some extent lots of things have changed. I’ve long argued, the biggest change is behavioral; it’s not about the technology. So I would argue that mobile has both caused and enabled an irrevocable change in consumer behavior. And the further we become attached to our phones, the more the behavioral change is ingrained in us. The proliferation of smartphones only accelerates that, because it allows us to do even more via mobile. So there’s a whole range of behaviors and actions that are becoming more and more commonplace.

Mobile marketing is not the same everywhere in the world, because it grows and develops at different rates because of different cultural, social, economic conditions. In Western European countries and the U.S., we spend a lot of time talking about apps and the app economy. We talk about mobile payments and barcodes and couponing and augmented reality. For a lot of the developing economies, it’s still all about voice and messaging. And there’s still a huge amount of innovation going on in voice and messaging, connecting brands and consumers together.

In addition to differences across regions, what about between generations?

You can split the world into digital natives and digital immigrants. Digital natives would be, at least in the developed world, people under 40 years old. I think you can divide them further into mobile digital people and PC digital people. In developed economies, the average age of someone getting a new mobile phone, which is predominantly a smartphone, is about 12 years old. Here it tends to be when they go to secondary school or high school. The reality is that at 12 years old, you can be excluded from an entire part of life these days if you don’t have a mobile phone and access to all the functionally that comes with it.

So people have grown up with an expectation that everyone has a mobile phone, and everyone can be contacted via it, with a very different set of expectations than a PC-based digital native or a digital immigrant. Because their experience in the world is that everything can be done in real time; everything can be two-way and dialogue and conversation rather than monologue and broadcast. And therefore those people start to expect a totally different sort of engagement with brands. They’re growing up in a world—particularly if they’ve got smartphones—where they know they have access to almost the sum total of human knowledge in their pocket. There’s almost no question that you can ask them that they can’t answer in 60 seconds, by going onto the mobile Internet or in accessing Wikipedia, or something else like that.

So these people are growing up with an understanding that you can click and find, click and know, click and buy. And that has to change your mentality and mindset, as a consumer. And therefore those people have a much greater expectation that they will be able to connect with each other and with any brand via every channel possible, but particularly mobile.

Will people expect that brands will be part of the experience or, conversely, be very wary of brands, since the mobile is such an intimate piece of technology?

I think they have an expectation they’ll be able to connect when they choose to. As consumers, we reach for the channel that’s most convenient for us and that’s closest to hand and helps us match our need and allows us to control the way in which we will communicate with brands.

I’ve read reports saying that consumers are dismissive of brands in the digital space, full stop. But I actually think that’s greatly exaggerated. People are no more and no less willing to engage in communication or dialogue with an FMCG brand than they ever were. So there’s a false expectation that just because you’re in social media or you’re building a mobile app or you’ve got a mobile website, that somehow will change consumers’ interest levels and willingness to want to engage with you as a brand. I don’t think it does. It may open more opportunities for you to engage with people at selected times.

So does mobile then come down to, for the most part, some kind of value exchange for brands?

Value exchange is certainly at the heart of a lot of what’s best in marketing, full stop, let alone mobile marketing. In the mobile marketing space, value exchange is absolutely critical in something like permission-based mobile marketing, where you’re building an opted-in list of people who you can communicate with via the mobile channel. We feel differently about the mobile channel because it’s more personal—therefore getting people to opt in so you have their permission to connect and engage with them is really important. And in order to do that, there needs to be some kind of value exchange as well as their permission.

Have you seen any particularly good examples of a mobile value exchange?

There are actually lots of good examples. Turkcell, in Turkey, have a very large opted-in subscriber base, and I’ve seen some really interesting campaigns they’ve run for Pepsi. Being able to selectively pick some of the behavioral characteristics in order to send the right message to the right person at the right time is quite a smart thing. The Pepsi campaign connected the Pepsi television advert with a mobile call to action at the end.

They’ve been running it for three years in a row and also used outbound messaging to an opted-in audience of Turkcell subscribers that matched a particular profile of the audience they wanted and gave them the opportunity to win airtime or free text messages by texting in a code off the side of the product. Particularly significant results in that, but that whole use of the opted-in database has been done well by Turkcell for a large number of brands.

In the U.K., I’ve seen that done well by O2. They’ve equally got a similar permission-based mobile marketing database where they are sending people messages based upon both their opt-in and understanding their preferences, and then having some kind of value exchange take place.

And quite a significant number of customers do opt in?

Yeah, I think at last count, Turkcell had something like 13 million opted-in consumers. And I think O2 in the U.K. has in excess of 10 million. So when it’s done well and you recognize, we need to have their permission, we need to understand their preferences, and we need to respect their privacy, if we get those three P’s right—permission, privacy and preference—then give some kind of value exchange, consumers will allow us to use their personal data and take commercial messages in exchange.

Do you see a lot of variation across regions as far as consumers being willing to opt in and accept that?

Generally speaking, you would argue that Western consumers are far more concerned about the use of their personal data. In emerging economies there’s a greater tolerance for what some of us might consider to be spam or unwanted messaging.

Does it seem like most players in mobile marketing are now adhering to privacy best practices?

There’s an understanding in the mobile industry that behavioral targeting or, better put, contextually relevant advertising or messaging—which recognizes who we are, where we are, when or the time of day, and what we are doing—is one of the big USPs of mobile marketing and is an essential part of our future. Therefore, from what I’m seeing, there’s a very clear understanding that we need to respect consumers’ privacy. And the industry is setting about creating good self-regulation in order to make that work.

It seems that with more and more data and better technology, contextually relevant messaging is getting more precise?

It is. And so what you’re attempting to do, as I said, is reach the right person with the right message at the right time. But I think it can work in both push and pull examples. So you might walk out of your office, search Google on your mobile phone for restaurants, and it’ll say, “We know who you are, we know exactly where you are, we know it’s close to lunchtime, and we know, based upon your search history, that you’re interested in fish restaurants, and therefore those should be the results to come up first. Because we have an understanding of who you are.” So you have the opportunity to pull down data that’s more relevant.

We equally might choose to push you relevant messaging. In a couple of hours when I’m heading home, based upon my previous shopping examples, it might be a strong time to send me a message to say, “Hey, Paul, it’s Friday. Here’s a voucher to try a different bottle of wine,” based upon the fact that they know I’ve got a strong history of buying white South African wines on Fridays and Saturdays or when I’m leaving the office. They might also push me towards a particular location that’s on the route I go home.

All that kind of data can be, and in the future will be, available but will rely on me giving my permission to receive that kind of thing. And I, as a consumer, may choose to say, “Actually, I’d quite like a message that gave me an offer on different wines from the new world on a Friday, different things to try on my way home from the office.”

An example that came up at the MWC was an alert that would remind the person they need to buy milk just as they are leaving the office.

Yeah, and you can do that. The term Big Data tends to get bandied around too much. What we’re trying to say is, is there a more intelligent way of using data that consumers are prepared to allow us to use on them, to give them more relevant and targeted messages? Consumers don’t want Big Data, they want good data, don’t they? We as consumers don’t think about all the data we’re giving and sharing. But we are interested in getting better messages and less clutter in our lives, being hit by so many broadcast messages.

One of the challenges for the mobile industry, of course, is generations of marketers have been brought up to believe that reach and frequency is everything—you want to reach the largest number of people the most number of times you can in order to cut through so that your message is heard. In the mobile space, quite often what we’re saying to people is, actually we’d rather reach the right people with the right message at the right time who are most likely to react. Rather than just continuously broadcast one way, hoping that it reaches our right audience.

At the MWC, someone from the agency world commented that we have maybe a few years’ window to get mobile advertising right, because otherwise consumers will just reject mobile ads altogether.

I’d agree. I think as consumers become increasingly sophisticated, they will look for more and more sophisticated tools in order to manage their personal data. And it’s perfectly possible that in developed economies, there will be a future where consumers jealously guard their personal data and even will sell it to brands in order for them to see messages.

We certainly have a very low tolerance for people sending us unwanted messaging on our mobile phones. If you’ve got one single unsolicited SMS on your phone every day for a week, probably by the end of the week you’d be ringing your carrier and saying, “Make this stop.” But you don’t think about the fact that 40 percent of your Yahoo or your Hotmail inbox is junk. So we have a totally different level of acceptance for unsolicited messaging online and coming through our mailbox, and coming through our home phones even, than we do for our mobiles. We feel very differently about mobiles. We feel we own the mobile channel; it’s very personal to us. So there’s absolutely a priority to get it right and to respect people’s privacy and understand the difference in the user experience that’s expected.

So the wine messages you mentioned, is that theoretical, or have you seen brands doing anything like that?

I’ve seen similar things. I’ve just seen a fantastic campaign in Prague which used geo-location around a coffee shop to send messages to people who had opted in to a database. W hen they went within one kilometer of the coffee shop, they sent a message saying, “Come in and collect a free coffee and croissant today.” And you might argue, that’s no different than giving away vouchers on the street corner. The difference here is the people have opted in to receive messaging of some sort, they’ve got a response rate of around 6 percent of all the people who received the message came into the coffee shop. The really significant numbers that I saw in the campaign, which was only a few weeks ago, is more than 40 percent of the people had no idea where that coffee shop was previously. So they were completely new to it. And more than 40 percent of the people who turned up to redeem the offer bought other products while in store.

So that message was sent to specific people in a specific location in and around the lunch break. That’s a great example of how you can use contextually relevant advertising to reach people.

Have other kinds of geo-location campaigns been similarly successful?  

There are an awful lot of very successful geo-location campaigns going on. My absolute favorite that I’ve seen in the last year comes from Guatemala, from a shoe store [Meat Pack] in a mall. There’s a fantastic video of how they use geo-location. The customers had an app on their phone, and when one of their customers walked into a competitor’s store, they received a message with an offer for a discount they could apply in store, which reduced by the second. So they forced people to run back to the store.

So both of those are really good examples of how you use the concept of location plus an opted-in database, plus sending the right kind of messages to people at the right time. The thing about the one in Prague, it hasn’t just encouraged people to come in and collect something free—a significant number of those people were introduced to the location for the first time and were buying additional products.

And then one of the really interesting things about mobile is that you can keep following that same consumer over time.

Yeah, if they give you permission. There’s an ability of course to build an understanding and an awareness of who those consumers are. But in that sense mobile has the ability to meet the promise of what CRM said it was going to do in the first place, which was allow brands to have a one-on-one relationship with consumers. In a sense, mobile can actually fulfill on that promise.

There’s also the idea of the mobile at the center of the retail experience. Not just in terms of showrooming and the ability to buy things on the go, but accompanying the consumer from original awareness of the product through purchase and post-purchase.

I’ve seen that. And I think there’s a potential for brands to use the mobile channel to support retail and physical sales. There are plenty of examples of mobile being used to help drive footfall in the store and then to engage with consumers in the store and then out of the store. And then act as an adjunct to the whole retail experience rather than be solely responsible for showrooming. In the U.S., you’ve got Best Buy, who are particularly good at using mobile pre-, during and post-purchase in a number of ways.

I saw one just yesterday that was pretty interesting, an app for a coffee brand, Douwe Egberts, which basically helps you understand how to make a perfect cup of coffee. They’ve taken a real education/utility approach, rather than it being about attempting to make the next Angry Birds, or whatever else. It need not be about entertainment. They’re saying, we can do something useful for our consumers. We can encourage them to go back into the store and buy products. Or indeed, buy it online if they wanted to.

What does the app do?

You can pick the size of cafetière that you’ve got, you can then say how many cups of coffee you want to make, what kind of strength you want, what kind of flavor you want as well, and it’ll give you the instructions as to how much coffee to put in. And then it starts a timer that says, this is how long you need to wait for that coffee to brew before you push down the plunger on the cafetière and pour the coffee out. It‘s a really neat experiential thing.

As far as apps, do you think a lot of branded apps are getting lost in the big pileup of apps that consumers might collect?

Harking back to that previous example, utility often beats entertainment a lot of the time. Trying to create something that has any lasting effect or any lasting presence on someone’s handset is a pretty tough thing to do. And people can be too easily tempted into thinking that they’ll try and build the next Angry Birds. I think the task should be trying to consider, “What does mobility mean to our consumers? What are our consumers trying to do already with mobile? And how can we recognize that and do something useful for them?”

Have you seen any other good examples of that lately?

One of the standout examples has got to be the way TripAdvisor has moved from being a PC-based online site to being a mobile one. And its influence is absolutely vast now. They’re recognizing this whole phenomenon of social commerce, the idea that we are sharing our purchasing decisions pre-, during and after buying anything. And I would argue, the rise of comparison sites and that kind of thing is likely to affect almost every industry going.

There’s also interesting opportunities to use the mobile as a loyalty card.

The potential in loyalty is massive. I think there’s going to be a merger of payments, loyalty and promotion so that you won’t have any more paper coupons, you won’t have any more plastic credit cards or any more plastic or paper loyalty cards. All of those will merge into one, and all will be present on your mobile device.

As it’s set up right now, in a mobile wallet there are “cards” representing each of the analog items. But eventually that won’t necessarily make sense, I guess.

When you get a new channel, what happens is that the starting point is you tend to copy what you already know. But what happens when you start to think about, what can I do differently now that I’ve got mobile? And the “do differently” thing would be, I can now add in contextual relevance. So what about allowing me to dynamically opt in to receive messages when I go into the store? So what happens when I can turn my app on and off, so if I go into a shopping mall and say, “OK, I’ve turned on my app; what offers have you got available for me now?”

You can go around and do your supermarket shop or whatever else and receive messages there and then that are related to the fact that you’re in the loyalty scheme for that store, that you have currently five or six coupons that have been sent to you, your current point score is worth X. And of course it brings the retailer the massive benefit of being able to talk to people when they are in the store. The challenge, or the downfall, of loyalty schemes normally is, you don’t know that the customer is in the store until they’re leaving. That’s the first time that you get them to swipe their card.

Mobile would allow you to identify the point at which the customer starts the shopping trip inside the store and give you a potential, perhaps, to influence their purchases before they start that purchasing process. That’s got to be of much more value. You can imagine going into your biggest supermarket and turning your app on, and instead of reaching into your purse to look for coupons, you’ve got the ability to say, “Show me all the coupons I’ve currently got. And the really dynamic offers you want to give me right now.” It’s a double hand-raise. You’re saying not only “I am here” but “I’m open to offer.”

That could be transformational for retailers, and a way of combating showrooming. What you’re saying to people is, “Unless you go to the physical location, you’re not going to get the best offers.” So that’s kind of like an extension of the Shopkick app. You get points just for shopping and turning up at the location. Think of it as a stake in the ground for where these things are going in the future. And with mobile you can see an advert on your mobile phone, engage with the brand or the retailer in some way, and then purchase the product by your mobile, all in one go. That’s the other big advantage in mobile is its ability to close the loop.

Looking to the year ahead, what kinds of new, interesting approaches do you think we might start seeing from marketers?

It’s going to be, to a certain extent, more of the same. One of the great things about mobile, but it can be the most challenging at the same time, is that it’s busting out in every direction simultaneously. And the challenge is to try to stay on top of all of that, all the different innovations and all the different new technology and all the way it’s being applied. But that’s part of the joy of being in this industry.

To pick some of the more general things that I’m seeing, I think we’re going to see more use of rich media within mobile advertising. We’re going to see more companies having mobile Internet sites and figuring out that the mobile experience needs to be different. What people will do is increasingly recognize that the mobile experience is not just a copy of the PC online experience. I expect to see more brands recognizing the difference in the user experience. And probably more of them recognizing that it’s not an either/or choice between mobile Internet and apps, it’s an “and” choice.

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Things to Watch

  • Uniqlo, H&M and Retail As the Third Space
    April 15, 2014 | 4:30 pm

    “Retail As the Third Space,” one of our 10 Trends for 2011, is rapidly accelerating: As digital commerce becomes habit for consumers, brick-and-mortar is increasingly focused around experiences, unique environments and customer service, giving shoppers new reasons to visit retail spaces. Uniqlo’s flagship in New York is a good example. A newly renovated floor incorporates a Starbucks (a favorite brand among teens) and, as MarketWatch reports, “lounge sofas, tables and chairs and an iPad station, allowing shoppers to stay and mingle.” Thanks to a partnership with the nearby Museum of Modern Art—resulting in a range that uses images from famous artists—the floor’s design is museum-like, with T-shirts in framed display cases.

    Another recent example in Manhattan is H&M’s flagship, which opened in late 2013, which one writer dubs “The most retail fun you can have with your clothes on.” For more on Retail As the Third Space, find our 2103 report Retail Rebooted here. —Marian Berelowitz

    Image credit: Uniqlo

  • Bitcoin middlemen
    April 10, 2014 | 2:45 pm

    Given its volatility, security issues and legal concerns, merchants interested in accepting bitcoin have a lot to worry about, especially with the possibility (as some see it) that looming regulation could upend the entire system. To mitigate the risk and open merchants up to new revenue streams, startups such as BitPay and Coinvoice make it easier for companies to accept the cryptocurrency.

    These payment processors act as middlemen: A shopper pays in bitcoin, but the merchant can decide whether to be paid in bitcoin, fiat currency, or a combination. This allows companies to shield themselves from the uncertainty of the currency or to dip a toe into accepting it as payment. Until bitcoin becomes more stable and regulated, payment processors such as these will be a safer option for merchants. (For more on bitcoin, see also our post on the Inside Bitcoins conference.) —Nick Ayala

    Image credit: BitPay

  • Delta’s Innovation Class
    April 3, 2014 | 2:15 pm

    Delta’s new Innovation Class allows the influencers of tomorrow to spend a flight with a current industry leader—the airline calls it a “mentoring program at 35,000 feet.” The first mentor was Pebble smart watch creator Eric Migicovsky, on his way to Vancouver for the recent TED conference, who was paired with visual artist James Patten, a 2014 TED senior fellow. The next flight, in May, will feature chef Sean Brock as he heads to the James Beard Awards.

    While Innovation Class isn’t the first such initiative, it’s the first to leverage existing social networks on LinkedIn, where potential seatmates apply to Delta. The program illustrates creativity in using the plethora of touch points marketers have access to and can leverage to create valuable experiences both online and off. —Matt Goldenberg

  • Virtual reality rugby
    March 27, 2014 | 1:00 pm

    While the Oculus Rift headset doesn’t yet have a launch date, brands are already using the virtual reality platform to amaze consumers. To promote Game of Thrones, HBO made fanboys’ dreams come true at this year’s SXSWi with an experience that took viewers on an immersive trip up the show’s famed “Wall.” And U.K. phone company O2 has created “Wear the Rose,” a rugby training experience that combines footage from GoPro cameras with an Oculus headset to give fans the experience of training with England Rugby.

    “Rugby balls are thrown at you to catch, charging players run at you to teach you tackles, and at one point you find yourself in the middle of a scrum,” writes Eurogamer. O2 recently debuted “Wear the Rose” at a stadium match and will showcase it in select U.K. stores starting in June. —Aaron Baar

  • Security as a USP
    March 20, 2014 | 12:45 pm

    As we note in our wrap-up of SXSWi, security is fast becoming a unique selling proposition. Rather than treating it as an afterthought and scrambling to compensate if user data is compromised, more tech companies will build highly secure environments for their users from the start—selling security as a point of differentiation until it becomes a right of entry.

    The secure-communication app Wickr is offering up to $100,000 to any hacker who can crack its defenses and is selling a suite of six privacy features to developers and apps like Snapchat and WhatsApp. Another such app, Telegram, offers a bounty as high as $200,000 to anyone who can crack it. Meanwhile, the upcoming Blackphone is described as “the world’s first smartphone which places privacy and control directly in the hands of its users.” —Ann Mack

  • Watson, AI and customer service
    March 13, 2014 | 1:45 pm

    IBM has been promoting the commercial applications of Watson, its artificial intelligence service, with CEO Ginni Rometty announcing a Watson challenge for mobile developers at the recent Mobile World Congress. Rometty also noted that North Face is testing a website that incorporates Watson intelligence to answer customer queries, as seen in this video of an IBM demo at the MWC. Watson could serve as a “personal shopping concierge” for e-commerce brands, as Ad Age put it.

    At this week’s SXSW in Austin, where IBM has Watson powering a food truck to demonstrate its multifaceted potential, an IBM exec talked up Watson’s potential in the customer-service arena. We’re seeing the beginnings of a world where artificial intelligence powers (and personalizes) an array of brand interactions with consumers. —Marian Berelowitz

     

  • Spritz
    March 7, 2014 | 5:00 pm

    Slate may have to adjust the Minutes to Read feature on its articles. In line with our Age of Impatience trend for 2014, Spritz is a new reading app that uses a new visual technology to help people read at Evelyn Wood speeds or faster.

    Pinpointing the “Optimal Recognition Point,” at which the brain begins to recognize numbers and letters, the program highlights that space for each individual word and places it at the same place on the screen, reducing eye movement. The program can push reading speeds up to 500 words a minute. (You can see it in action here.)

    Sprtiz will be available on Samsung’s new line of wearable technology. —Aaron Baar

    Image credit: Spritz

  • Virtual fitting rooms
    March 4, 2014 | 11:45 am

    PhiSix, a 3D virtual technology company recently acquired by eBay, plans to bring more of the outside world into physical stores’ dressing rooms in an effort to increase sales. We’ve reported before on websites that offer 3D virtual try-ons at home and brick-and-mortar stores that have become living, breathing websites. But PhiSix’s technology takes the virtual fashion experience one step further, allowing shoppers to see how specific items of clothing look on them, in a variety of sizes and contexts, without actually trying them on. With PhiSix’s computer graphics, which will be made available to third-party retailers, shoppers will be able to enter a store dressing room and view themselves wearing clothing in a number of active settings (e.g., swinging a golf club, walking down the street). The technology also recommends other items to consumers, based on a few basic measurement inputs. Although virtual try-on technologies, which have existed for a while, haven’t succeeded in displacing trying on actual clothing, PhiSix’s sexy timesaver may draw more shoppers into physical retail outlets. —Alec Foege

    Image credit: PhiSix

  • Daily Mail’s Just the Pictures app
    February 25, 2014 | 3:15 pm

    The U.K.’s Daily Mail, whose digital content is dominated by photographs, is planning to release an app called Just the Pictures that strips out the text for smartphone readers—or non-readers, in this case—who are looking for snackable content while on the go. At a Mobile World Congress panel in Barcelona, Melanie Scott of the Mail Online said the app will be out in March. Per Scott, the Daily Mail’s current iOS app attracts about a million daily users in the U.K., and they’re opening it four or five times a day for 12 minutes at a time, largely for the pictures. 

    Just the Pictures is another sign of images replacing words in our increasingly visual culture, one of our 10 Trends for 2014. For more on how this trend is affecting the mobile platform, watch for our annual mobile-trends report in April. —Marian Berelowitz

    Image credit: Daily Mail

  • Full-fat comes back
    February 20, 2014 | 6:00 pm

    Bring on the brie! Last week NPR reported on two studies finding that “whole-fat dairy is linked to reduced body fat,” research likely to boost a recent shift away from lower-fat dairy products. Butter has been bullish lately: Annual sales in the U.S. have increased 65 percent since 2000, with per-capita consumption reaching a 40-year high. And while milk sales in the U.S. declined in 2013, full-fat fared relatively well (with sales declining 0.8 percent vs. 4.1 percent for reduced-fat). 

    The trend ties into a growing preference for foods that feel less artificial or newfangled, as well as the ongoing urge to Live a Little (one of our 10 Trends for 2012).  —Marian Berelowitz

    Image credit: liz west

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