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  • PRESENT & FUTUREO F M O B I L E M A R K E T I N G

    N O V E M B E R 2 0 1 2

  • A Forrester Consulting Thought Leadership Paper Commissioned By Velti

    Mobiles Potential Lies Beyond an Extension of the Desktop A Market Research Study On The Strategic Use Of Mobile In Marketing

    November 2012

  • Forrester Consulting

    Mobiles Potential Lies Beyond an Extension of the Desktop (A Forrester Consulting Thought Leadership Paper Commissioned By Velti)

    Page 1

    Table Of Contents

    Executive Summary: Use Of Mobile Is Tactical, Not Strategic, In Marketing ............................................................................ 2!

    Advertising Dominates Mobile Marketing Mindshare Today ...................................................................................................... 2!

    Mobile Offers Untapped Opportunities To Marketers ................................................................................................................... 7!

    Few Marketers Are Preparing For This New World ....................................................................................................................... 8!

    Key Recommendations: Marketers Must Build A Broad Set Of Competencies ....................................................................... 14!

    Methodology ......................................................................................................................................................................................... 14!

    2012, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to www.forrester.com.

    About Forrester Consulting Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forresters Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit www.forrester.com/consulting.

  • Forrester Consulting

    Mobiles Potential Lies Beyond an Extension of the Desktop (A Forrester Consulting Thought Leadership Paper Commissioned By Velti)

    Page 2

    Executive Summary: Use Of Mobile Is Tactical, Not Strategic, In Marketing Mobile is the catalyst for seismic changes in how brands will engage with consumers; these will create both new opportunities and challenges for marketers. The majority of mobile marketing spend today has been a reflection of desktop, primarily focused on advertising or anonymous consumers. With the potential intimacy and rich context offered by mobile, however, the true potential lies in the acknowledgement that mobile is a unique channel on to itself and a significant opportunity exists not only in advertising but also lower-funnel marketing or engaging with existing customers. In August 2012, Velti commissioned Forrester Consulting to evaluate the state of mobile marketing and advertising in the United States. To further explore this trend, Forrester developed a set of hypotheses that tested the assertion that marketers are spending the majority of their mobile efforts on initiatives that mimic desktop campaign planning and as a result, neglect the opportunity to develop the competencies they will need to take advantage of the mobile platform in two to three years time.

    In conducting in-depth surveys with several agency professionals guiding the mobile marketing strategies for their clients and 150 mobile marketing professionals within consumer product companies, Forrester found that the majority of mobile marketing tactics employed were upper-funnel branding and promotions, i.e. spray & pray, that focused on acquisition; the majority of mobile marketing spend was on advertising; and few mobile marketers were developing strategic, long-term plans to build a holistic mobile marketing competency. Too few are taking advantage of the unique opportunities offered by mobile.

    Key Findings Forresters study yielded three key findings for mobile marketers:

    Most mobile marketing spend is allocated to upper-funnel tactics. Among the executives surveyed, 90% use mobile advertising tactics, while only 48% use mobile marketing tactics to engage with their customers. Among the executives interviewed, 33% self-report using mobile advertising tactics more often than mobile marketing tactics.

    The planned use of context falls short of its potential. Mobile phones are personal devices not shared devices. The combination of sensors and observed behavioral data from the broad use of phones provides a phenomenal amount of contextual information that marketers can use to simplify mobile experiences, offer utility, or push more targeted advertising. Too many mobile marketers 78% are rooted in their PC and audience paradigms, while only 43% use real-time information including time of day, but not behavioral data.

    Too few marketers are building competencies for holistic mobile marketing. Mobile marketers primarily rely on their agencies for mobile marketing strategies while simultaneously failing to build the relationships, gain the buy-in, and understand the requirements of those outside interactive marketing. Only 45% of mobile marketing executives surveyed felt they had strong expertise in-house, while 52% rely on their agency for strategic guidance.

    Advertising Dominates Mobile Marketing Mindshare Today With the number of mobile phones exceeding 6 billion globally, according to the United Nations, and smartphones taking a majority share in the US in 2012, mobile is the most ubiquitous digital medium. Few marketers, however, capitalize on the potential of mobile today. Marketers recognize the need for mobile in their marketing mix, but they still rely heavily on the (PC-based) interactive experiences and paradigms. Despite 82% of marketers having a strategy,

  • Forrester Consulting

    Mobiles Potential Lies Beyond an Extension of the Desktop (A Forrester Consulting Thought Leadership Paper Commissioned By Velti)

    Page 3

    only 34% were running marketing campaigns in alignment with that strategy and 46% revealed that they were still in the test and learn phase. Our research found that:

    The majority of tactics employed fail to take advantage of the entire mobile funnel. At 90%, the adoption of upper-funnel mobile advertising tactics (e.g. display ads, search, 2D bar codes) far exceeds that of lower-funnel marketing tactics (48%) (see Figure 1). Social media and display ads topped the list. The migration of familiar tactics from online (PC) interactive marketing to mobile devices is a natural progression that fits within the comfort zone of marketers. Among those not yet leveraging mobile tactics, lack of expertise internally was cited by 18%. The use of advertising tactics is not accidental fewer inexperienced mobile marketers are pursuing lower-funnel objectives such as increasing customer satisfaction or improving customer service (see Figure 2). In fact, acquisition through sweepstakes and contests is the only objective pursued by more less experienced marketers. More experienced marketers have moved on to more strategic tactics.

    Mobile targets are anonymous individuals within broader audiences not customers. Marketers continue to rely on aggregate demographic data or paradigms carried from non-mobile media to target their audience rather than building profiles of individual consumers based on trust and offered utility. Among the marketers surveyed, 78% were using audience data and 71% individual behavior information for targeting, while only 64% were leveraging profile information unique to mobile devices (see Figure 3). Looking to PC best practices falls within the comfort zone of interactive marketers. Naturally, when individuals first adopt new technologies, they do old things in new ways. It will take time for marketers to embrace mobile to leverage the unique opportunities offered.

    Mobile marketing spend is lower overall, with upper-funnel discovery claiming the largest portion. The average spend on mobile marketing media in 2012 is just over $500,000, with only 36% of companies surveyed spending more than $1 million (see Figure 4). Furthermore, 12% dont know how much they are spending on mobile. Marketers are allocating 49% of spend to upper-funnel objectives, with customer acquisition claiming the largest share with 23% of spend. Spending on loyalty is also high at 17%, but loyalty programs typically offer instant savings or after-the-fact accounting; they do not engage with the consumer either during the consideration phase or after purchase while trying to use a product or service.

    Metrics rely on PC paradigms more than on mobile metrics. The majority of marketers focus more on engagement with ads and traditional business or marketing objectives (e.g. coupon conversion) than on tapping into unique mobile KPIs (see Figure 5). To be fair, engagement with advertising is easier to measure than cross-channel attribution. However, relatively few marketers were measuring engagement with known customers preferring to focus on anonymous interactions.

  • Forrester Consulting

    Mobiles Potential Lies Beyond an Extension of the Desktop (A Forrester Consulting Thought Leadership Paper Commissioned By Velti)

    Page 4

    Figure 1 Majority of marketers utilize mobile adver