Mobile Marketing in 2011: Five Channels That Look Like One

"The year of mobile" has been declared by marketing trade press more or less every year since the iPhone shipped. This year, the declaration is finally starting to sound credible. Smartphone penetration in the United States has crossed the meaningful threshold. Mobile web browsing is no longer experimental. Branded apps have moved from novelty to expected. And SMS — the original mobile-marketing channel — is still, somehow, the most reliably effective tool in the category.

For brands trying to figure out where mobile actually fits in the 2011 marketing budget, the honest answer is: in five different places that look like one channel and behave like five.

SMS still works

For all the attention on apps and the mobile web, SMS remains the highest-response mobile channel by a wide margin. Open rates run above 95%. Response rates dwarf email. The catch is that SMS only works with permission — recipients who explicitly opted in to receive messages from the brand. Brands that buy SMS lists or text without consent get fined, and deservedly so.

The brands using SMS well are running it as a loyalty channel, not an acquisition channel. Existing customers get coupons, flash announcements, and order updates. New customers do not get cold texts. The discipline is straightforward; the brands that ignore it pay the regulatory consequences.

The mobile web matters more than apps for most brands

Every brand wants an app. Most brands do not need one. The mobile web — a properly built mobile site that loads fast, reads on a small screen, and lets the customer accomplish a clear task — is the working anchor of most consumer mobile experiences. The brands building apps because their competitors built apps are usually building expensive software that nobody downloads.

The exception is the brand whose customer relationship is genuinely repeat and habitual — banks, airlines, transit, food delivery, daily-use retailers. For those brands, an app is real infrastructure. For everyone else, a mobile-optimized website with fast load times and a clear call to action will outperform an app that costs ten times more to build and one-tenth as many people install.

Branded apps that actually get used

The apps that work follow a pattern. They solve a problem the customer has repeatedly, not occasionally. They load fast. They do one or two things well rather than ten things poorly. They give the customer a reason to open them when they are not actively shopping — a loyalty balance, a useful tool, a piece of content that earns the screen real estate.

Starbucks, Nike, Kraft (the iFood Assistant), American Express, and a small set of brand apps that earned daily usage are the working references. The thousand-plus branded apps released last year that nobody opens twice are the cautionary tale. Brands considering an app should ask whether the customer has a reason to open it on a Tuesday. If not, the app will not get built — at least not well.

Location is the new mobile signal

Foursquare, Gowalla, and the location-aware features inside Facebook are surfacing a new layer of marketing data — where the customer is when the brand reaches them. Coupons that fire when a customer is near a store. Specials that surface when the customer checks in. Loyalty tracked through location rather than punch cards.

The technology works. The customer adoption is still early. The brands experimenting carefully — running location-based offers as add-ons to existing loyalty programs, not as standalone campaigns — are learning faster than the brands betting big and finding nobody checked in.

Mobile ad networks and inventory

The mobile advertising layer has consolidated faster than most expected. Millennial Media, Jumptap, AdMob (now Google), and Apple's iAd cover most of the inventory U.S. brands are buying against. Mobile ad CPMs are still cheap relative to web display. The targeting is improving. The creative is mostly still bad — banner ads scaled down rather than designed for the small screen. The brands that build mobile-native creative will outperform the brands repurposing desktop assets.

QR codes — the verdict is mixed

QR codes hit U.S. marketing campaigns hard this year. The technology is sound. The execution has been mostly poor. Codes printed in places nobody can scan them (subway tunnels, magazine spreads that need to be held still, billboards). Codes that lead to mobile experiences not designed for mobile. The handful of brands using QR codes well — clear placement, useful destination, fast load time — get real engagement. The brands using them as decoration get nothing.

The honest read on QR codes is that they are a tool, not a strategy. Brands shipping QR-code campaigns without thinking through the destination experience are wasting print real estate.

What the mobile marketing playbook looks like

• A fast, well-designed mobile website — the working anchor. Every brand should have one. Most still do not.
• An opt-in SMS list, used carefully, for the brand's most engaged customers.
• An app only if the customer has a repeated reason to open it. Otherwise the budget is better spent on the mobile site.
• Mobile-native creative for any paid placement against mobile inventory — not desktop ads shrunk to fit.
• Location-based features tested carefully, layered onto existing loyalty programs rather than launched as standalone campaigns.
• Measurement that captures mobile-specific behavior — short sessions, micro-conversions, in-store visits — rather than measuring mobile traffic against desktop benchmarks.

Bottom line

Mobile marketing is no longer experimental, but it is not yet a single coherent discipline. It is five overlapping channels — SMS, mobile web, apps, location, and mobile ads — that brands are still learning to operate together. The brands that figured out the integration first will compound the lead. The brands waiting for "the mobile market" to mature into something simpler will be waiting a long time. The market is mature. The discipline is the part still catching up.