Wednesday, April 1, 2009

The devil you know

I'm reading this morning an outstanding productive brief from Mobile Marketer. The very first article is titled "Per-message carrier fees killing SMS marketing: CTIA panel".

Interestingly, the article ends with the right conclusion, which is that meaningful interaction with the audience is the solution to drive higher ROI from mobile marketing campaigns, especially those that require financial investment like SMS.

However, I feel the title of the article and the beginning of it does little justice to the context, the operators and the whole mobile marketing space. (And I'm not a fan of US carriers SMS policies by any stretch of imagination).

At the end of the day you can quarrel all day with the operators over pennies. Reality is, that those pennies actually make SMS still a highly attractive mobile marketing platform for brands as it has still not been invaded by everyone and their wives. Because there's a financial barrier (BTW, if you want to point any fingers, how about those outrageous financial requirements to get a dedicated shortcode by Neustar. $1K/month for what exactly?). If there wasn't one, you'd see growing number of automated and behavioral blocking elements similar to the ones we have today on email and web.

No, the revenue margin needs to come from brands and advertisers who are, in fact, seeking effective access to their audience with new tools like mobile. They have the money to spend, once seeing that this channel works. And so currently the expenditure on mobile advertising, compared to TV, for example, is experimental by nature. I heard someone say recently "I've never heard of anyone in an agency loose their job over spending their budget on TV advertising".

The question then, is whose job is it to bring the advertisers down from the fence their sitting on, show them the value and push this market forward. The answer to that question, of course, is the mobile marketers. HipCricket, iLoop, Adva Mobile and others.

And so it's not helpful to pressure the operators seeking for higher margins, we should create those margins on the other side. If anything, by applying pressure on the operators, we're asking them for a new business model that could be just as bad, if not worse.

No comments: