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With billions of mobile devices in use by consumers around the world, and with those devices getting more and more capable every year, it's no surprise that many industry observers believe the future of mobile marketing is bright.

How bright? Some have gone on to suggest that mobile ad spend will eventually overtake that of television. A bold prediction given that brands spend well over $100bn globally on television ads ever year -- magnitudes of order more than they spend on mobile ads.

While those predictions may prove a little bit too optimistic, and recent research indicates that consumers are annoyed more by mobile ads than their television counterparts, few doubt that mobile marketing will see significantly more investment in the years to come. But when it comes to impediments to increased investment, there's a leading culprit: ROI.

According to a study conducted by Forrester Research on behalf of staffing agency Aquent, which polled 155 executives in charge of hiring marketing staff, "[proving] that mobile marketing has a positive ROI" was the most commonly cited barrier to growing mobile marketing staff. All told, 68% of the executives polled suggested that they would need to figure resolve the ROI issue before they could hire more mobile marketing staff.

As detailed by MediaPost's Steve Smith, the ROI question appears to be holding overall spend back too, with Forrester Research finding that just 15% of the executives participating in its study predicting significant growth in mobile marketing budgets.

A larger problem?

The fact that proving mobile marketing ROI seems to be a challenge for many companies is somewhat surprising. Most run-of-the-mill mobile marketing campaigns aren't fundamentally different than campaigns in other traditional digital channels from a technical perspective, meaning they don't (or shouldn't) suffer from the ROI calculation challenges introduced by social, which have proven to be vexing.

So what gives? The answer, perhaps, is that ROI is generally a problem. Yes, in many cases it should be incredibly easy to calculate in most digital channels given how accountable digital campaigns are, but when one considers that more than a third of businesses can't calculate email marketing ROI, it is evident that figuring out what makes money and what doesn't make money is more difficult than it would seem to be.

There are numerous reasons for this. Some companies don't have the tools and expertise; others are simply lazy when it comes to tracking campaigns. That means one thing for companies looking to assist businesses exploit the mobile marketing opportunity and cash in at the same time: doing more to prove the efficacy of the campaigns they develop and inventory they sell, even if they shouldn't have to.

Patricio Robles

Published 20 February, 2013 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Jonathan Bass (Incentivated)

Good mobile marketing delivers ROIs in the hundreds or thousands %s, whereas poor mobile marketing loses you money (low or negative ROI). In this way mobile is no different to other media/channels. What should be remembered, in a multi-channel world, is that consumers do not stay entirely within the mobile channel (or any other channel for that matter). They might search on a mobile device but come back later and buy in-store or online. They’ll try to shop in your store, find that their size is not available, then scan a QR code to reserve the item and hopefully collect and pay for it in another store the next day. You might send them an SMS but they end up buying via the desktop site later that evening. If you misunderstand this then the ‘hidden’ ROI will accrue to those who do get it and you’ll be left thinking “why is my competitor motoring ahead of me?”

Many aspects of mobile marketing have been proven again and again. Just look around you. A mobile commerce site or mobile CRM programme delivered by SMS or app (www.figarodigital.co.uk/case-study/marks-and-spencer.aspx), if designed and executed well, will deliver strong results on their own. Looked at from ‘before the last click’ and the ROI is even better (i.e. the effect of the ‘hidden’ ROI in this multichannel world where mobile is an incremental addition to what you do already in-store or online). On the other hand an app that does nothing new for the consumer will be lost in the app stores and you might as well have ripped up fifty pound notes. The same is true of mobile PPC when it sends users to desktop sites. More than £100m is wasted in the UK this way each year. How much are you wasting because you don’t know what your customers are doing on mobile; because you don’t understand their mobile habits? Your mobile ROI might even be negative even though you think that you don’t do mobile yet.

What this article/survey shows is that most marketing directors have already completed various experiments/tactical campaigns using mobile marketing and while some worked others did not. Given the vast number of mobile touch-points that exist sometimes this mixed result can be confusing. In fact it is quite clear which is which and why some are working and others not (with hindsight, of course). Now these marketing directors need to hire specialist staff and set them particular, focussed mobilisation projects, learning from past efforts and listening to colleagues, competitors and specialists. Avoid the “sounds too good to be true” hair-brained ideas that rely on consumers changing their behaviours beyond what has happened already (they are probably more mobile than you are) and stick to what collectively we all know works today in mobile.

You'll never know in advance what your mobile ROI will be, to the nearest 10%, but you can be sure of whether the ROI is going to be directionally correct and whether it is likely to be materially significant. Either you can work this out for yourself, applying good old common sense or through traditional audience research, or you can ask a specialist like my company (Incentivated). We can tell you what to expect and why, or what to do to in order to firm-up your forecasts. Of course sometimes a trial might deliver a negative ROI, because it is sub-scale, but rolling it out will take advantage of low marginal costs and significant reach. These are just normal business questions, of a marketing flavour. Not much different to “should I open a new store here” or “launch a sub-brand”. Of course not everything in marketing is measureable; we don't get to put one foot in each of two parallel universes and so the counter-factual will always be a guess even when you’ve tried it. So try and if you fail, fail fast. But don’t let this very real medium pass you by when it is clear from looking around you that consumers are mobile and have been for the last two or three years. You are already late to the dance.

over 3 years ago

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