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Mobile Marketer Senior Editor Giselle Tsirulnik recently interviewed me, regarding the role that SMS can play in mobile commerce. I am re-posting this interview and expanding some of my answers.

I hope this post gives retailers and brands insights into ways that “Trigger Point Marketing ™” like SMS can be used to link tracked mobile commerce sales with the social sharing of the specifics of  a product or price, by customers. When consumers share the news about something they recently bought among their social network, the effect can be powerful, as long as retailers can track the resulting lift via mobile commerce transactions.

Here is an extended version of what I said:

Q: What is the benefit (for a brand or retailer) of having a consumer SMS/MMS a product they are viewing via a mobile commerce site,  to a friend?

A: This sort of social sharing means the retailer or brand has a new touchpoint delivered instantly to a highly prequalified audience. Since the text arrives from a trusted friend, the person who receives it is very likely to open the text, read it, and click on the link. It stands to reason that the conversion rates for the recipient of the SMS would be many times higher than traditional marketing blasts.

By providing the tools needed for consumers to repackage and redeliver a marketing message to a highly prequalified audience within their own social graph, retailers can tap into a very potent mixture of personal referrals and siphon off additional mobile commerce sales.

Q: How could this potentially drive sales for a retailer?

A: Smart retailers are increasingly offering their customers tools whereby they can share the deal they just got. Word of mouth and personal referrals consistently ranks amongst the highest-ranked reasons consumers visit a store or retail website. If the retailer has a mobile-optimized site, an SMS sent by a customer can serve as a delivery mechanism for a deep link right into the section of the mobile commerce site where the exact product that was purchased (or product grouping) is queued up and ready to buy for the text recipient. This can directly, positively impact mobile commerce sales and, more importantly, can be tracked, measured and even used as a way to reward consumers who have spread the word.

Q: Do you think more retailers will be incorporating SMS into their mobile sites in 2012?

A: Yes, retailers interested in stay relevant will utilize a variety of new ways to have hyperlinked touchpoints spread by pleased, loyal consumers.  In a few clicks, the recipient of the text message can buy the item their friend bought and also have the opportunity to pass the word along. By adding this option pre or post-purchase, retailers can infuse their mobile commerce sites with

As SMS starts to replace email with younger generations and more and more retailers build and launch mobile commerce retail sites, this method of “Trigger Point Marketing(tm)” is a great way to drive tracked ROI. SMS is alive and well and retailers should certainly add it to their marketing mix, in support of mcommerce.

Q: Why is SMS a good medium to encourage sharing?

A: An SMS text message is instant and it is personal and it generally comes from a known, trusted sender. For these reasons, a whopping 98% of all text messages sent are opened by the recipient. No other form of digital marketing even comes close.

SMS also opens up a new channel of communication between the retailer and the consumer and builds a retailers database of contacts, since the mobile commerce platform captures the mobile phone numbers of both the sender and the recipient.

Q: What are some other ways SMS can be incorporated into a mobile commerce site?

A: When integrated into a mobile commerce site as a “social share feature”, SMS can also be tapped to distribute pre- and post-purchase links to a product in a mobile commerce site, within the social graph of the purchaser

SMS can also be used, via short codes, to drive traffic to a mcommerce site, when a hot link is sent back to the consumer, by the retailer. Additionally, SMS can be used to sign up customers to loyalty programs or allow them to opt-in for announcements of new arrivals, etc. If a shopping cart is abandoned, SMS can be used to ping the customer who did not complete their transaction, to remind them that their cart is full and they forgot to check out.

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The Final Word: Mobile commerce is no longer an option for retailers and brands that sell consumer direct. Retailers that do not have an integrated mcommerce site are losing sales every minute, literally.

The linkage between proven, incremental sales and mobile marketing has long been elusive. This fact has kept a barrier up between the ecommerce team and the marketing dept. This is finally changing and the fact that socially driven messaging can be infused with deep links within a mobile commerce page means that these two worlds are finally set to merge. When this happens, marketing will be able to see a quantifiable return on their spend and the ecommerce team will have a whole new revenue stream via mobile commerce that is, in turn, supported by mobile marketing. A win-win. Remember, SMS is but one method, and QR codes and Near Field Communication (NFC) are also viable ways to drive proven, new mobile sales via”Trigger Point Marketing ™”.

The silos between marketing and ecommerce must be demolished. The retailers and brands that realize this and embrace this notion fastest will win. The rest will be left behind.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec, LBS consultant, and now leads Sales and Business Development for  Unbound Commerce.

Contact Wilson today to learn more. Mobile: 303-249-2083.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of location. Contact him today to learn more.

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Last Monday, I attended an event at MIT in Boston. It was a standard panel-style presentation/discussion, with a moderator, sponsored by Nokia (thanks for the turkey wraps and little red gourmet cupcakes). It “sold out” in advance and I’d guess at least 200 people were there. It was, literally, standing room only.

Are Today's Agencies Enbracing Mobile?

Billed by organizers (Mobile Monday Boston) as a way for attendees to “learn the realities of mobile advertising”, the panel was stacked with ad agency people. Many attendees I spoke with saw this as a rare opportunity to hear directly from ad agencies, regarding their mobile plans. A finger on the pulse of those paying for the upkeep of the mobile heartbeat.  After all, if these agencies have the ear of the brands, then knowing their mindset regarding tomorrow’s mobile spend is very important, as the collective “Mobile Industry” springing up around all this “potential” needs to get paid today.

The Year of Mobile, Every Year

With the general mobile advertising outlook over-ripe from 3 years of unrealized, predicted mobile spending ramp-up, this night had the potential to shed some real light on the future of mobile marketing, and, perhaps, the fate of many of the companies represented in the audience. With livelihoods literally depending on brands spending real money via the mobile marketing tools many in the audience had invested so much time and money in, it is little wonder the event sold out in advance.

The Auditorium Fills Up! It Was Standing Room Only.

The predictions about the mobile ad spend have been recently correcting downward, as most brands idle on the sidelines, in a wait and see mode regarding mobile. Many dabble in mobile banner ads, a few skin up and launch product-related iPhone apps, and most have plugged into the free social media machine. But the big money is still not flowing and there is a backlog of companies waiting for the faucet to be turned on.

Are Agencies Paving The Way Or Blocking Progress?

Disclaimer: I have long-suspected large agencies of stunting the potential of mobile marketing because they fear that tracking and reporting real results regarding converted sales could shine unwanted light on all the untracked bread-and-butter mass broadcast marketing they run via traditional media. So, this night I came prepared to have my mind changed and I really expected to see and hear the excitement agencies were passing along to their clients. Why else would they have signed up for this panel? I was ready to be convinced that my conspiratorial theories were wrong (or at least have my mind set at ease).

To set the stage, here is the actual verbiage used to promote the event:

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The Realities of Mobile Advertising

Mobile advertising is getting a lot of hype, but what are brands really doing in mobile today?  What should we expect in 2011?  Our panel will discuss the realities and answer questions like:

  • How big is mobile brand advertising?
  • How does mobile fit into the big picture for most brands?
  • What are the hot issues for brands? Targeting? Buying? Ad formats? Measurement?
  • How has Apple’s promotion of iAd changed the market?
  • What are the opportunities for publishers and app developers?

Speakers:

Adam Towvim, Jumptap (Moderator), Brett Leary: VP/Dir of Mobile Marketing at DIGITAS, William Nann: Director, National Advertising Sales at Crisp, Brenna Hanly: Mobile Catalyst at Mullen, Jon Phenix: VP Sales, Nexage, and Stephen Bagdasarian: Digital Strategist & Mobile Specialist, Hill Holliday Advertising

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This was a who’s who of Boston Ad Agencies and the purpose was to have them explain their individual or collective “realities” right there, live and in front of a room of mobile industry “insiders”. Kudos to Mobile Monday Boston for putting this together, by the way.

Sponsor Nokia Kicks Off

Sponsor Nokia opened the evening with a slideshow overview of their plans to re-take a share of the booming US smartphone marketshare they let slide by. They announced a $10 Million dollar developer contest designed to lure apple-addicted code writers their way.

The slideshow touted their global marketshare and reminded us all of the gazillion Nokia phones they sell. Despite impressions here in the US (caused largely by iPhone mania), they are a real powerhouse elsewhere. The new N8 just launched in the US and the Nokia team even had a fishbowl full of business cards collected, for the purpose of handing out two new phones at the end of the night to two lucky winners. Nothing turns heads like free phones as schwag. They even branded the nametags at the conference, making it look like 200 Nokia employees were in the audience. First time I have ever seen a logo on a nametag. Pretty smart, actually.

The guy next to me took notes about all this on his iPad, and even snapped a few pics on his iPhone, as did I. Nokia is well-positioned to make some moves and has a track record a mile long but, in the US, they have a long way to go.

Patterns Emerge

Top Boston Ad Agencies Address Mobile

Jumptap’s Adam Towvim was the moderator and did a good job all night. He kept the panel moving and asked the right questions. As the conversation flowed along, some clear patterns  emerged.

The first was that fragmentation was generally viewed as a big problem in the mobile landscape and that it negatively impacted the ability of agencies to convey a concise strategy to their clients.

The second was that ad serving consolidation was needed to increase efficiencies, reduce redundancy, and allow the agencies to better know WHO was actually seeing the mobile ads and better-measure engagement, across all platforms. A tall order.

The various kinds of phones (feature phones vs smart phones vs “candy bar” phones) were mentioned as an additional challenge.  Ad exchanges and buyside technology plays (to aggregate various ad servers) were also mentioned as welcome tools.

Sponsoring or branding iPhone applications was discussed as a way that brands could get involved, but it was noted (and generally agreed) that few agencies were adequately staffed up for  this.

Brenna, the representative from Mullen mentioned that she worked on a crowded creative floor and only-recently heard mobile advertising even mentioned. She offered that only because the team had been shown a presentation on the potential of iAd had the topic even come up.

iAd was generally seen as a positive platform for creative to be conveyed on both mobile and on tablets, but soon the conversation shifted to the fact that Apple was wielding too big a big control stick and some brands were bailing out (IE Adidas).

The discussion was fairly interesting (and fair) but not very exciting. The focus seemed to be more about “glass is half empty” what-can’t-we-do problems with mobile reach and fragmentation. Branding apps and creative rich media used in addition to mobile banner ads were lightly touched on as positive. There was little “let’s dive in” energy and only a smattering of carefully worded cautious optimism. All evening, I had the nagging feeling that something was missing…what was it?

What Was Not Said

The time was 8:15 and the panel had been on stage for over an hour when, finally, it happened! Brett Leary from Digitas was talking about the potential of the iAd platform, when he mentioned LOCATION. Yes, that little teeny detail about mobile marketing was not mentioned for the first hour+ of the discussion.

As if startled awake, Steve Bagdasarian from Hill Holiday picked up the ball and ran with it, nailing  several important factors one after another that only mobile advertising can offer brands. He spoke of “marketing to context” and how mobile allows even a small campaign to yield very large results and learnings. He spoke of “completing the user experience cycle” and how the “where factor” adds a powerful new element for brands.

Finally, just as it seemed things might heat up and the true power of mobile fleshed out, the moderated session ended, and the floor was opened to audience questions.

A Murmur Of Energy

Astounded that it had taken until nearly the end of the evening for the fact that most mobile devices know where they are and can deliver contextually-relevant messaging to come up, I raised my hand and was called on first. I asked about Mobile Proof Of Presence and “checkin” transactions linked to marketing messages. I asked for each panelist to comment further and expand on the potential they saw regarding Location as a mobile differentiator.  A murmur of energy swept through the crowd.

Again, Steve Bagdasarian from Hill Holiday lead the way. He was genuinely fired up and called mobile Location Based Services (LBS) “the future”. Steve described standard banner ad click-though measurement as “not suitable” for mobile and even tied in brick and mortar “here and now” campaigns as key. He even mentioned New England-beloved Dunkin Donuts as a willing participant in some tests his agency was running.

Will Nann from Crisp jumped in and added that he thought measurement was key and Brenna from Mullen asserted that “time and place marketing” and “learned purchase behaviors” would be very important. Yes!

Brett from Digitas (remember, he first used the “L” word), asserted that mobile could “use all the elements” and would emerge as powerful, as long as tracking could work across all platforms.

Another question was asked and the discussion spun off into tablets, Nokia hurriedly handed out two new N8 smartphones via the business card drawing, and the program ended.

Conclusions: Agencies Remain Cautious

It was an interesting event, don’t get me wrong, but I was left with the distinct impression that, even when confronted with a room full of mobile industry insiders clamoring for evidence of some optimism, agencies remain cautious and, unless prodded, will not push mobile on their clients, at least until reach is better understood and confusion caused by fragmentation reduced. This implied “all or nothing” trigger point felt, to me, more like a convenient excuse, than a real client-side-generated requirement.

Hill Holiday stood out as the most-willing to “go for it” and the resulting impression was not, at least to me, one of foolhardiness. It was, in fact, the opposite.

Test Small, Learn Big: What Can Be Done

To get ahead, in my opinion, agencies need to embrace the idea of “test small, learn big” and those out there with solutions for forward-thinking brands should describe them to the brand’s agency of record as a low-risk  trial. Or they should pull the “end around” and find a cheerleader at the brand to demand that the agency address the measurable mobile opportunity with, at least, a small foray.

Mobile solutions that offer low-risk pilots and can generate demonstrated revenue lift (without causing confusion) will open the doors to more and will win early. Dashboards that allow the agencies to view/understand metrics, own them, and pass these on to their clients/brands are essential, as the agencies need to made to feel they are in charge of the results and pass them on at their pace, in synergy with other non-mobile campaign results. Agencies that bring these platforms to their brands will be seen as innovators, but the platforms must first win over the agency and be prepared to let them be seen as the winners.

Even if on a small (initial) scale, trials of these mobile marketing tools can show the brand real numbers and label the agency as forward thinking and not afraid of mobile, even during this “fuzzy front end”. The time is now and those with numbers generated over time (even if small now, on a user percentage basis) will be well-positioned to win when the user numbers catch up. The brands whose agencies push this strategy now, will beat their competitors whose agencies fail to act boldly and try some of these new, exciting tools.

Just DO It (and log the metrics)

Doing versus talking about all the reasons not to do is essential, especially in the face of mounting evidence that mobile usage and search is taking off, while at-home desktop search is falling (+247% vs -15%). While the percentages of those who engage with branded businesses via the location-enablement of their phones are still small, this opportunity to learn is big. If a consumer is out and about and searching for something, brands need to be ready to show them WHERE to locate that item and buy it, right then, in that crucial mobile-only moment. And their agencies should be telling them the best way to do it.

Are the agencies hurting mobile? I think the answer is no, but they certainly can do more to encourage trials and not link mobile marketing to unrealistic requirements like 100% defragmentation and total, complete reach, with uniform tracking across every device or platform.

Agencies also need to take the time to educate their employees on the basics of mobile marketing and LBS. This is crucial. It was clear to me that some top people at the agencies represented at this event were not fully versed in how these tools really work and the potential value of the metrics that can be generated. They need to educate themselves.

The Shotgun AND The Rifle

Most of all, in my opinion, agencies must discard the notion that mobile campaigns that provide tracking dashboards and ways to demonstrate ROI will expose the inadequacies of the other more standard media buys that do not. There will always be a place for the shotgun approach in marketing. Mobile, using the power of location, is the highly accurate rifle shot.

Where Can I Buy These Cupcakes? They Were Awesome!

All in all, it was a good evening. I was relieved that the topic of location and the unique differentiating abilities of mobile platforms was discussed, even if it was tacked on at the end of the evening and initiated by an audience question. Clearly, we in the industry need to make it easier for agencies to focus on the full half of the glass, but agencies also need to put aside the convenient excuse that they will only let their brands dive in when every single element of mobile marketing is known and understood.

As the Mad Men TV show teaches us, the basic premise of advertising has been around for a long time. Mobile, on the other hand, offers us new and different and untested potential and there is a degree of “try it” needed if brands are to be exposed to the full potential of tracking incremental sales tied to specific mobile campaigns.

Thanks again Mobile Monday for the event and to Nokia for sponsoring it. By the way, where did you get those little red velvet gourmet cupcakes? I wish I could use my phone to find the brand that makes them and then navigate to the authorized retailer near me right now that sell them. I wish the agency that handles their media would call me and hire me to help. Wouldn’t that be sweet!

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Wilson Kerr (@WLLK) is a former Tele Atlas exec and started Location Based Strategy, LLC in 2007 to help clients harness the power of location. Contact him today to learn more.

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Wilson Kerr (@WLLK) is a former Tele Atlas exec who started Boston-based Location Based Strategy, LLC in 2007 and is helping his clients harness the power of Mobile Proof Of Presence. Contact him today to learn more.

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The promise of location-based mobile advertising has been painfully slow to materialize. It seems the last five years have all been declared “the year”, with the usual cliché examples flogged. Most brands and their agencies still pace the sidelines, waiting and watching. If they do add mobile to their spend, they tend to replicate the click-though web advertising approach, and miss the full potential.

In this post I will explore the rush of start-ups seeking to perform an end-around on the mobile advertising blockage, by betting that personalized, actionable, tracked, direct to consumer sales promotions that are location-based will finally unlock the true potential of mobile. In past posts I have discussed incremental, tracked sales revenue “lift” and the importance of remembering that brands make money by selling more products through authorized retailers, not by exposing their brand or driving people to a corporate informational website.

 

Driving Boots In The Door Is Key

The difference between an ad and a personalized location-based special offer is subtle, but important to understand, as we consider why “personalized shopping” start-ups are springing up so fast (and attracting so much VC attention). Mobile marketing, when linked to a call to action based on real-time proximity to a retail location (and honed by a personal preference profile) can finally show ROI by linking itself to proven in-the-door foot traffic (and converted sales). Thankfully, the platforms are now there to allow this to happen.

Discounts and special “limited time offers” are not new and have been around since the first baker made a double batch of bread by mistake and needed to sell the excess before it went moldy. By dropping the price, he increased sales volume and attracted new customers to his bakery. By selling more, he discovered he got a better wholesale volume price on the flour. So, even though he grossed less per loaf, his net profit per loaf held up, and he sold more bread and made more money. Simple math.

I have an admission. I check-in on Gowalla,  tweet on Twitter, post Facebook updates based on where I am, scan QR codes, use apps to find business addresses, and see a lot of contextual mobile ads, yet, after almost 3 years as a full-time mobile LBS consultant, I have never actually bought anything as a result of a location-based offer. That streak ended last Tuesday.

$25 For $50 Gift Certificate Prompted My First Location-Based Purchase!

I spent $25 on a location-based offer from Living Social, for a $50 gift certificate at a nearby restaurant called The Fireplace. (My wife is a “foodie” and enjoys dining out the same way I enjoy a day on a trout stream). How could I not? What is really amazing is that, in the 2 days the deal was offered, 925 other people also bought it, generating $23,150 in tracked, incremental revenue, all tied to a single, specific marketing message. Obviously Living Social takes a %, so The Fireplace does not take all this in, but the real value to them is the opportunity to win over repeat customers when they come in the door and sit down for a meal. What traditional ad or coupon or campaign could they possibly run that offers this sort of (tracked) response?

My First Purchase Based On A Location-Based Special Offer!

I checked Living Social competitor Groupon as I was writing this up, and they were offering a nearly identical deal from The Fireplace as well! (Groupon is a volume-“triggered”, limited time, personalized, local discount offer platform). I thought I was misreading the numbers…but over 4,500 people paid $20 for a $50 gift certificate, so far. Wow…that’s over $90,000 generated from a single deal, and counting. When is Groupon going public?! Are they hiring!? Check out the numbers on these deals. Remarkable.

Volume "Triggered" Discounts

Living Social and Groupon are but two such companies harnessing the power of delivering opt-in deals based on location and, I believe, they are on the leading edge of a “personalized shopping” craze that is about to sweep the mobile industry. Groupon, by the way, is not even 2 years old and is valued at least 1.2 Billion (yes, Billion). If they can sell 4,500+ visits to a single restaurant in a few days, what else can they do?

Another standout to watch, besides Living Social and Groupon, is RueLaLa. They serve up invite-only fashion brand discounts (via daily “boutiques”) to 2.4 Million members! There are hundreds more personalized shopping wannabe’s starting up now, to vie for a slice of the personalized shopping pie. Here is a quick sampling; Eversave.com, Woot.com, DailyDeals.com, DailyDeals.net, SaleCamel.com, FuseDeals.com, DailySteals.com, and DailyCheckout.com.

The ones that will win will use algorithms to learn from real purchases and deliver increasingly personalized and location-based offers that drive (tracked) foot traffic into physical locations.

Platforms/apps that track in-store metrics showing both foot traffic (MPOP) and sales conversion (redemptions) that are fueled by personalized location-based special offers (delivered by smartphone), will bridge the gap between the virtual world and the physical world. These platforms (with Mobile Proof Of Presence as a foundation) are about to become the hottest thing going.

Gowalla, Foursquare and their kind and doing some great things, but should consider that advertisers will want accurate metrics regarding brand interaction, within a retail environment where hundreds of brands might be present. For coffee shops and restaurants, their model works pretty well, but inaccurate and “fake” checkins are going to prove an achilles heel as/when the brands with the real money to spend get a taste of “tighter” MPOP accuracy via other options.

In April of this year, I wrote a post about the significance of validated MPOP (Mobile Proof Of Presence) and maintain that hyper-accurate MPOP validation linked to special offers, not mobile ads for brands, will be the key to finally unlocking the full potential of mobile. And it’s happening.

The LBS world was recently rocked by news that a pre-launch application called Shopkick had attracted $20 Million in VC funding. That’s right, the application has not even launched in beta, and the company has attracted what Mashable calls “an obscene amount of investor attention”.

 

Why, you ask? Because Shopkick intends to validate MPOP in a whole new way (they call it the Shopkick Signal), via installed in-store equipment that eliminates fake checkins and delivers marketing messages based on very tight proximity, within a store and without GPS. This means brand-specific checkins are possible, and they are accurate. According to a recent Techcrunch article, Shopkick co-founder Cyriac Roeding is quoted as saying, “This is all about foot-traffic. So far, no one has nailed a way to entice people to actually come to the store that makes sense to the retailer“, Roeding says. He goes on to say,“This is the physical world equivalent of an online click,”. Hmm.

Attracting "Obscene Investor Attention"

I assume the platform also will learn actual shopping and buying behavior and personalize the offers it serves up based on a powerful cocktail of mobile delivery+retail locations+brands carried+loyalty rewards+MPOP+special offers+redemption/ conversion tracking.

The platforms (like Shopkick) that capture accurate metrics generated by opt-in consumer interaction with retail locations (and sales conversion of branded products carried within those locations) are going to become very attractive to retailers, brands, and agencies sick of being screaming at by their clients to provide just such a solution. Remember, this is information that consumers ask for, and they are rewarded with savings on products they buy, in stores they visit.

Brands and retailers alike might finally step off the sidelines and onto the field, if they can track ROI and link incremental sales to campaigns, while providing a positive consumer interaction with both the brand and the retail stores authorized to carry it. The era of personalized shopping is upon us and mobile, at long last, might finally starting living up to its potential.

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Wilson Kerr is a LBS Consultant focused on helping companies understand and harness the power of  Mobile Proof Of Presence. He is also wondering  how he will slip the waitress his 50% off Living Social coupon at The Fireplace without his wife noticing.

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Wilson Kerr (@WLLK) is the Founder of Boston-based LBS consulting firm Location Based Strategy, LLC and helps brands understand location-based forces that drive changes in human interaction and communication. He can be reached at Wilson@LBStrategy.com.

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As a LBS consultant seeking to fortify my position as a thought leader in the area of checkins and Mobile Proof Of Presence (MPOP), I scan daily blog posts, articles, tweets, newsletters, and emails for real, live examples of companies harnessing the potential of MPOP to drive sales lift.

Many experts (myself included) have opinions about how impactful the phenomenon of “brands delivering personalized marketing messages to opt-in consumers at the exact time and place they are most-able to act upon these messages” will be. My use of the word “phenomenon” here tips my hand, but specific examples that can be seen as validating use cases are generally still hard to find.

Checkin

Checkin Platforms Have Paved The Way

While the potential has been in-place for some time, it has only been in the last 6 months that the stage has finally been set for cases of  lift to be demonstrated. By “lift”, I mean proven, incremental sales tied to opt-in location-based marketing campaigns delivered via mobile platforms that leverage the fact that a consumer willingly notified the offer-serving platform they were in physical proximity to the point of sale. We have Fourquare, Gowalla and other “checkin” platforms to thank for this shift, as their success has accelerated consumer and brand awareness (and calmed the hand-wringing “privacy alarm” naysayers).

The Meat Of The Matter

The Meat Of The Matter

While checkins are hip and fun, the real meat of the matter here is in mobile payment systems, offer redemption tracking, and algorithmic “learnings” by the platforms that deliver real, actionable value to consumers.

This is what will get us over the hump, as the offers are not only unintrusive, they are personalized, actionable, and tied to a system that gets smarter over time, based on real consumer redemption/purchase behavior. Pie in the sky? Amazon nailed this years ago and new “customized daily deal” companies like RueLaLa, Living Social and Groupon are out of the gate and growing fast.

On July 14, Mobile Commerce Daily Associate Editor Dan Butcher posted an article that stopped me cold. Titled,“McDonald’s Goes With Near Field Communications For Sales Lift”, it succinctly describes a program that utilizes nearly every ingredient of (what I believe to be) the recipe for a new form of location-based marketing. Dan’s post was covering a July 5 post by Senior Analyst Red Gillen of financial consultancy Celent titled, “A Merchant’s Argument For Mobile Contactless Technology“. Note that the (bold) emphasis is mine, throughout.

Red Gillen

Red Gillen Of Celent

Mr. Gillen researches payment initiatives and visited with McDonald’s in Japan, to discuss mobile technology. He starts off by saying, “..The focus of our discussion was McDonald’s use of mobile technology for sales lift purposes — i.e., as a channel to distribute coupons and special offers, to entice customers into McDonald’s restaurants.”

He is already speaking my language. “Sales lift” is another way of saying incremental purchases and his immediate shift to the importance of using mobile to drive more customers through the retail door struck me. Too many view the “mobile web” as a smaller version of the web and miss the obvious real world implications of being able to walk around, while online, with a device that knows where you are. Coupons are old news but linking Near Field Communication (NFC) as the “mobile technology” behind redemption by a specific customer and, thus, proving that customer was in a specific store at a specific time is not.

He goes on to describe the program in detail by saying, “Customers (now about 18 million of them) register as members of McDonald’s “Toku” promotional program.  On a weekly basis (in time for the weekend), McDonald’s sends program members a mobile e-mail, with a list of coupons and promotions available that week.  Customers then have two choices.  One is to use their mobile browser to open mobile coupons, which are shown to McDonald’s cashiers (a promotional code is clearly visible).  The other, if customers have already downloaded the McDonald’s app (which 8 million have already done), is to download the coupons to their contactless mobile wallet.”

Wow. An opt-in program. Time sensitive offers delivered to a mobile device. Two ways to redeem the coupons. One of them involves mobile NFC payment tied to a downloadable opt-in branded app that serves as a “contactless mobile wallet”. Hmmm.

McDonald's Mobile Coupons

McDonald's Mobile Coupons

Red is just getting warmed up. Remember this is not a pilot or a concept, this is  happening. He goes on to say, “Either way, the customer gains the benefit of the coupon.  However, with the contactless version, there is a special advantage.  Namely, McDonald’s is able to close the loop between coupon distribution and redemption.  By associating redemption patterns with a customer’s “Toku” membership ID number, McDonald’s begins to develop intelligence about that customer’s preferences.  Based on this, McDonald’s is able to configure and send out highly personalized promotions (by menu item, specific restaurant, time of day/week, etc.) to the customer’s mobile phone, which the customer is more likely to redeem. This increasingly tightening marketing loop cannot be achieved with plastic membership cards, nor with mobile browser-based coupons.”

So, the NFC redemption system learns as it goes and is able to generate increasingly personalized time/place/item offers based on real behavior within the application. This is the “walk-by-and-get-an-offer Starbucks Cliche” so often flogged in LBS circles, but it’s real and it’s live now and, apparently, used by 8 million opt-in consumers in Japan, in conjunction with a distinctly American brand that is hardly a fringe player in the quickserve landscape.

The finale is contained in the last paragraph, “Once customers tap their contactless coupons, the data is leveraged to immediately send orders back to the kitchen..This just goes to show that contactless is not just about payments.  In fact, it often isn’t about payments at all..”

 

NFC Contactless Payment and Redemption

Red’s point is that, even though NFC is most-often associated with cash-free payment (for example in mass transit ticketing), the real power of this model is that the system is using the personalized, tracked coupon redemption patterns to learn from the consumer’s behavior in order to both prove increased store visits and sales (lift) and increase efficiency via the speed of the resulting transaction.

I have covered why this is so important for brands to understand in previous posts, but suffice it to say I am excited to finally see the first real examples of companies leveraging the power of tracked, cutting edge mobile LBS technology, while also respecting and harnessing the power of consumer preference.

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Wilson Kerr (@WLLK) is the Founder of Boston-based LBS consulting firm Location Based Strategy, LLC.

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Wilson Kerr (@WLLK) is the founder and principal consultant at Location Based Strategy, LLC.

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A recent report by E-Consultancy on the Value Of Social Media, shows some interesting statistics on the level of use of social media by over 400 companies surveyed and the general “experimental” stage most are in, regarding this new way to reach consumers.

Few would argue that there is a big opportunity for companies to take advantage of the myriad of social media marketing options. But this same myriad can be confusing and the options are evolving at a blistering pace. For brands and agencies used to traditional media campaign timelines and planning, it can be daunting to simply keep up with the options available, let alone form a coherent strategy that dovetails with current messaging. Given this, it’s not surprising that few companies have a firm grasp on the subject.

The ROI Problem

A pressing question for those dipping a toe in the social media waters is how to measure ROI. According to the report, “A third of respondents (32%) are getting less than 1x the return on investment from social media.”  The survey summary also states that, “Almost two-thirds of respondents (61%) say their organizations are “poor” (34%) or “very poor” (27%) at measuring ROI.”

Few would argue that the use of social media can drive brand awareness and open exciting new touch-points with consumers, but few social media platforms offer any real metrics for showing brands what the upside for all this work is. Web banner ads, keyword search buys, and mobile ad campaigns all come with metrics and performance elements that allow brands to measure ROI. Social media platforms need to catch up and offer these tools to businesses.

The At-Home Vs. Mobile User Experience Delta

Three quarters of brands (74%) in the survey say they use social media to drive consumers to their website. This is the traditional path and works fine if old fashioned branding is your goal. As such, it’s no surprise that “brand recognition” and “brand reputation” are the second (64%) and third (63%) reasons given for social media marketing participation. For regular at-home website visitors, this is OK, but it does not translate to mobile.

For example, spending some time here at my desk visiting doritos.com and the intense flash media experience found there makes me perhaps a bit more-likely to buy some doritos. In mobile, this is a disaster and simply does not translate. I do not want a branding experience that takes 4 minutes to load on my iphone when I am walking down the street. I do not want to install Flash. I do not want to have to enter my zip code. I want doritos!

My point is that, when a consumer is “out and about”, they behave differently than when they are sitting at home on a fast web connection displayed on a large screen. Most brands do not have mobile optimized sites, let alone a store locator that interfaces with the location awareness of the mobile devices we all carry 16 hours a day. No wonder 74% of companies say they do nothing or have “only experimented” with social media. They need to grasp the implications of the differences between mobile consumer behavior and at-home web browsing, before they dive in.

The Mobile “I Want It Now” Factor

Store locators are what most companies use to promote their locations but, if they are delivered on a standard website to a mobile consumer, the zip code entry interfaces ae clumsy (and the related poor mapping that does not tap into the location-awareness of the mobile device). This, along with the obvious screen size and zoom limitations of most phones, makes these experiences suboptimal for mobile consumers.

Brands need to build a functional place for mobile consumers to “land” and then deliver quick gratification that honors the fact that a highly prequalified consumer that “asked for more” is mobile and wants actionable, location-relevant information. Once built, social media is an excellent way to drive mobile consumers to a site optimized for mobile. The primary goal should be to honor the “I want it now” factor by converting opt-in mobile site visitors to incremental customers, by delivering the locations that carry their products.

“Checking In” To A Brighter Future

It is not a bad thing that companies are moving forward with some trepidation. They can afford to wait a bit, especially as the various social media platforms work on providing analytics and tools that measure the interaction with brand entities. While some platforms have enough traffic to monetise through ads, the smarter play is to tap into the ability to quantify incremental store visits by giving the brands access to a larger store locator within an interface that users know, trust, and want use to share current location information with friends.

The hottest and best example of this is, of course, Social Networking Games. No longer fringe, these hot platforms could solve the ROI problem and are tailored to mobile from the start. The games serve as a social network trojan horse that, for the first time, captures opt-in incremental store visits and makes the process fun, useful and viral. This metric has the potential to solidify into a new ad unit of immense impact, as check-ins are poised to be the new currency of mobile advertising.

Gowalla and Foursquare are the leaders and Foursquare’s recent business tool announcement tips their hand and shows the true potential of these popular platforms. They are, “pioneering a deeper connection between place and patron.” Preloaded on almost every AT&T phone, Ulocate’s WHERE platform is another example. They recently introduced a new “Check-In” feature with their version 3.4.

The mighty Facebook is working on “check-ins” as a direct result of Foursquare and Gowalla’s early leads. This is important because, according to the report,  “Facebook is the Web property mostly commonly used in social media, with 85% of companies using this site as part of their marketing strategy.”

The Tip Of The Iceberg

Mark my words: The social media networking platforms that capture valid, verified check-ins, and deliver the opt-in incremental store visit metrics these check-ins fuel in the right way, are going to be unlocking a very big door.

With 69% of companies spending between $0 and $5K per year on social media, we are just seeing the tip of the iceberg. As Social Media platforms evolve and cater themselves to the businesses that serve as the locations for check-ins and other key realworld interaction elements, brands and their agencies should be able to make better sense of the landscape, and tap into this powerful new marketing resource.

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Wilson Kerr (@WLLK) is dedicated to helping brands and companies harness the power of location and is the founder and principal consultant at Location Based Strategy, LLC.

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Wilson Kerr (@WLLK) is the founder of Location Based Strategy, LLC a Boston-based consulting company dedicated to bringing the power of location-based marketing to companies and brands.

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Social media marketing is hot hot hot. While the disjointed components have risen and fallien with the VC tide for some time now, a coherent roadmap is emerging for marketing a brand, product or service via social media. No longer just a fad for college kids or a way to virally promote your fart app, social media is emerging as a powerful and rapidly growing low-cost, high-reward force for driving sales.  The price tag is appealing and there is no barrier to entry.

With billions now being bet by the major players on the need for brands to have a mobile ad strategy, social media has evolved in the wings from a nice-to-have to a must-have for every company that sells anything. From a local pizza joint to a consumer packaged goods goliath, the power of human interaction to spread a marketing message though trusted social networks at very low cost is suddenly here (and increasingly measurable).

When did this shift occur? I am not sure, but something clicked into place in the opening months of 2010. Maybe it was Google buying Admob or Apple grabbing Quattro or the first real cold beer handed out for a virtual Foursquare Mayor’s badge, or some combination of forces. Regardless, mobile marketing seems to have finally broken through and social media is at the tip of this spear.

Twitter. Facebook. LinkedIn. Yelp. WordPress. YouTube. Foursquare. Gowalla. Myspace. Constant Contact. These are not fads. They are content-generating warp drives that harness the aggregated power of specific, personal product and service interactions distributed by a trusted collective of consumers who all opt in to play a role.

Brands can no longer just pitch the merits of their product at consumers. Push is out, pull is in. Consumers want verified, trusted information from people like themselves and know where to find it. They want it stamped as trustworthy and valid not by some pitch-team that dreamed up the slogan at a corporate offsite, but by the members of a social network that they can literally see, and that they chose to join. They have an insatiable appetite for the real interactions that generate a buzz they are a part of. How big is this appetite? Facebook‘s 350 million users post and share  3.5 Billion pieces of content to other members of their “friend” networks, each week.

Consumers know the members of their social media networks and trust their opinions. They can search for information quickly and easily to support these assertions and then walk into a business to buy something armed with more information than the salesman pitching them the product. This is a game changer and calls out the importance of what social media expert and blogger Mike Troiano calls, “Scalable Intimacy“.

Mike describes social media this way, “Social media..is about investing in relationships that create more measurable economic value than they cost. It is about engaging with the people who collectively decide whether to buy or not buy your product, like it or dislike it, recommend it or trash it, shape it or ignore it.”

As noted by Dharmesh Shah of social media software leader HubSpot, a great way to illustrate the power of social media marketing is to enter “(any brand) sucks” into Google. Or note that new social media marketing agencies are springing up, just to hold the hands of brands that tremble on the doorstep of this new frontier. Or consider the fact that 80% of the content read on the web today is not read on the site that originally published the content.

Most companies do not even have  mobile website, let alone an interactive social media hub for managing the way the blogosphere is distributing and discussing their product or service. There is a big opportunity here and a lot to learn.

How to get started? Check your city for informal networking groups like Mobile Monday and attend events, sign up for personal accounts and learn the ropes, ask questions, think about using social media to promote a non-profit you volunteer for, read blog articles from experts like Dharmesh Shah, Mike Troiano, and other thought leaders in the space. Of course, you can always hire someone to help out..

Still not sold? Still unsure if social media marketing is something you need to include in your corporate strategy? Just watch this video:

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