April 25, 2013
If you’re reading this to learn about new, innovative marketing solutions you can implement via mobile, look away now. It’s 2013; we’re all aware of the capabilities and solutions mobile has to offer and how important a mobile strategy is, but what you might not know is how those mobile activities actually translate into revenue.
Accounting for a full mobile strategy’s impact on revenue is made difficult by the different response rates users exhibit given the nature of various industries. Looking closely at the various market standards and trends, it’s clear that the right marketing strategy can have a great impact on the revenue; but it’s critical for marketers to realize that mobile marketing is not just about using the right tools, it’s about the context you deliver that tool in that matters and drives revenue.
The good news is the industry as a whole has already begun trying to quantify mobile’s impact on revenue. Google has even developed an online calculator tool, Full Value of Mobile, which walks users through a simple process of identifying how mobile affects the purchase decision process based on conversion rates.
Let’s have a closer look at 6 commonly implemented mobile marketing tools and the ways they link back to, and positively affect, a brand’s revenue:
1. mCommerce Site – the money maker: There’s no need to elaborate on the importance of the mobile website – the fact is it’s the cornerstone of nearly every mobile marketing initiative. A mCommerce site opens a brand’s doors to more consumers and more business. Successful development and positioning of an mCommerce site can increase revenues by 3%. Sales on mobile websites are skyrocketing and for some brands it already accounts for 6-7% of their overall digital sales. If these numbers sound small, do the math for your brand; it will change your perception on the mWeb strategy.
2. Mobile Applications – the popular (and powerful) brother of mWeb: Mobile apps are one of the most important revenue streams in the mobile monetization strategy. They are high-tech brand-presence mediums that are capable of anything. While I cannot disclose specific brands, several of Velti’s clients have recorded an increase in sales of approximately 50% when they rolled out their mobile application, with no drop in sales from their mobile web sales.
3. Mobile media – the promotional medium: Mobile media works well for brand engagement and positioning, as well as advertising brands and products. However, mobile media makes it a challenge for marketers to accurately track ROI across complex campaigns. Does mobile media link back to revenues? Does it help a brand convert their media spend into actual sales? Yes! Planning your mobile media campaign strategically by taking into account location-based services, targeted apps/sites, retargeting opportunities, real-time bidding and rich-media interactive A=ad units can be linked directly to online or in-store revenue. Based on research by Mobiquiti, 27% of purchase actions after browsing a mobile retail app/site are completed on smartphones. Adding that to your brand’s average click-through rate and your online sales, it leads to a rather noticeable increase of revenue from your digital hub.
4. Mobile coupons – taking mobile, offline: Mobile coupons are usually perceived as freebies, a way to trigger excitement or reactive your idle database. That said, there are almost countless forms of mobile coupons, and if utilized correctly, they can have a great impact on a company’s revenue. It is not just what you provide in a coupon, but also how you provide it, the time, the place and of course the tracking mechanisms you use. For some retailers, effective redemption rates could be as low as 0.9%; for some CPGs it can be 20%; the effectiveness of a couponing campaign varies significantly depending on the campaign’s strategic goal. Marketers need to understand the need for a more targeted mCouponing campaign. Pay attention to the location of your audience and customize your message if needed to drive the most revenue for your brand.
5. mCRM – the text based communication: SMS is perceived as a low tech solution. However, a user’s cell phone number is one of the two most important numbers you could have that links back with a client – the other one would be their SSN number. mCRM does not directly drive revenues, but sets up the first step on a successful mobile marketing campaign. Running a mCRM campaign on your social media efforts, for example, can result in the generation of a personalized, targeted and segmented database, setting up the ground for future activities and text-based promotions that link back to sales and revenues.
6. WAP-push messaging – a.k.a text-based advertising: It sounds very basic and unattractive. However, this is the most effective way to monetize your previously developed mCRM database. An idle database of XX people can now have an impact on actual sales. Targeted campaigns promoting a retailer’s product or special offers on the App or the mSite drive additional traffic to the mobile destination. Research found that SMS alerts with mobile links see a 19.3% click through rate to a website or mobile app, further adding to the overall mobile revenue streamline as noted above.
The tools listed above are just some of the ways that show how mobile only campaigns can have a direct effect on a company’s revenue. However, they are not the only tools that do so, as different solutions have different impact on different industries. What marketers need to consider when investing in mobile marketing campaigns, is not what you do, it is how you do it that produces effective results.