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Commerce and retail has huge play in mobile advertising: Panelist

SAN FRANCISCO - As Web-enabled smartphones and affordable data plans become commonplace, consumers are looking increasingly to mobile devices for their shopping needs, according to two rival executives at mobile ad networks.

This evolution of behavior, from store to catalog to online to mobile, will force retailers and marketers to rethink their cross-channel marketing strategies to target on-the-go consumers with mobile advertising.

The ?Embracing the Cross-Channel Mobile Opportunity? panel at Mobile Boot Camp, cohosted by the NRF?s, Mobile Marketer and Mobile Commerce Daily, was moderated by Editor in Chief Mickey Alam Khan.

?Twenty percent of our campaigns have an mcommerce component, where someone actually purchases something through their mobile phone,? said Marcus Startzel, senior vice president of sales at Millennial Media, Baltimore, MD. ?We excluded all carrier billing, so that figure does not include ringtones and wallpapers?it?s actual goods and services, and it is growing.

?Mobile commerce and retail has a huge play in mobile,? he said. ?There?s an incredible opportunity when you have consumers with a mobile device in your store or near your store and you can drive them to your place of business.?

When targeted using location, mobile advertising to opted-in consumers can be a valuable tool to drive potential customers to bricks-and-mortar retail stores.

Mobile advertising is generally sold on a CPM?cost per thousand impressions?or a CPA?cost per acquisition?basis.

?Brands come to us and ask, say, ?We want to sell a bouquet of flowers for a certain dollar cost per acquisition?how can you help me hit that metric?? Mr. Startzel said. ?At the end of the day, it?s not about 1-800-Flowers making mobile work because it?s key to their business, the question is ?How does mobile work for 1-800-Flowers so it becomes an effective sales channel for the brand??

Millennial Media has retailer clients that have run mobile campaigns designed to drive people to their physical stores for a particular offer, and Mr. Startzel said that localized campaigns often get the best uptake.

In terms of mobile coupons, they can be distributed via SMS, MMS, email, an application or a 2D bar code, and they are effective at driving consumers in-store.

However, there are redemption issues, as it depends on the capabilities of the particular point-of-sale system.

Whether it is an alpha-numeric code, a standard bar code or a 2D bar code, redemption tracking is critical to assess the success of the campaign.

?Can they accept a code at the POS, can multiple people use that code, does it have to be unique?? Mr. Startzel said. ?Mobile is very social and very viral, and that could be a good thing or a bad thing?a good thing if you want the widest reach, a bad thing if you want to track your media exactly.

?Retailer are trying to sell something, and they?re looking for the results, so we do pixel tracking, conversion tracking, etcetera, all at a granular level,? he said. ?Mobile advertising is a major trend, and can be especially effective for retailers.

?It?s not about cache, it?s about results?it?s all about the audiences we target, and we cut it up as detailed as they ask us to do.?

Mr. Startzel cited a statistic that 80 percent of people surfing the mobile Web are over 18 and the vast majority are over 24. Soon, more people will be browsing the Web on their mobile phone than on the computer.

?It?s only a matter of time before it becomes the default way to access information?the transition is occurring as we speak,? Mr. Startzel said. ?The mobile phone is a person?s first point of presence to the Internet, because it?s always with them.?

Mobile toolkit
The mobile channel can be used as a tool for both customer acquisition and retention, that is, customer relationship management.

Mobile advertising is ideal for customer acquisition, especially when integrated into a brand?s multichannel marketing strategy.

?Mobile?s made a lot of progress in the ways people track their different media, extending their programs to mobile,? said Jason Spero, general manager for North America at AdMob, San Mateo, CA. ?Brands are running the same types of programs in mobile they were in, say, direct mail, display advertisers and online advertisers running CRM programs with customers they?ve already acquired with, for example, deals alerts.

?Before you use mobile as an acquisition tool, get a mobile Web page and an app up and running,? he said. ?Before you think about starting to buy media, ask, ?How do I engage that user on a mobile phone? A deal of the day?

?Brands should develop both persistent mobile Web assets to engage their consumers and campaign-specific assets, then use mobile media to drive traffic to those assets.?

Best Buy is a good example of a brand that runs mobile ad campaigns for both brand-awareness and actual acquisition, with the goal of getting consumers to make a purchase in the $20 range.

?Don?t get them to a landing page and give them 5,000 options?from ecommerce to mcommerce it?s time-shifted,? Mr. Spero said. ?Build a mobile page and/or apps that shows users two or three products or a menu and click-to-call with the SKU number right on the page.

?It?s important to make sure how well they qualify the user before they take that specific action?it?s all about qualifying that user,? he said. ?We track the cost of acquisition, although it?s still not as sophisticated as online and we don?t know best practices quite as well.

?However, mobile cost per acquisition is at least as low as online or lower.?

The goals of mobile advertising differ by industry segment.

The automotive sector looks closely at the cost per getting a person to take a test drive. The goal is to get them on the lot using mobile advertising and then let the sales team try for the conversion.

?The hospitality sector blew up in 2009 in a good way,? Mr. Spero said. ?You can acquire someone to book a room cheaper on mobile than online.

?The QSR sector really took off with the advent of local targeting,? he said.

Retailers such as Sears have had success with mobile coupons. However, Mr. Spero echoed his fellow panelist?s concerts about point-of-sale redemption.

?We?re still training retailers for that last mile,? Mr. Spero said. ?You make a decision that you want to train POS employees to take coupons and understand what to do with them.

?Retailers like Sears and Best Buy have a lot of stuff on the shelf, and Sears was driving opt-ins for the deal of the day for a 45-day period around back-to-school in the fall,? he said.

?Consumers opted in to get specific things pushed to them that bring them back into the brand experience?Sears didn?t hand them the whole catalog on their handset.?

Armani Exchange is another retail brand that has had success driving consumers to retail outlets using mobile advertising.

Mobile ad networks can also assist brands targeting different demographics depending on the campaign.

However, brands should be careful not to slice their pie too thinly.

?You can target soccer moms in the Southwest, multiple ages, genders, household incomes and locations, but you can overcut your audience in mobile,? Mr. Spero said. ?Ask: ?How many unique users can I reach? Over what period of time??

?Balance reach and targeting, getting the audience you want, but at the scale that you want,? he said.