A new report from research and advisory firm Forrester Research Inc. says mobile marketing investments will surpass $1 billion this year as marketers begin to see returns on their investments from consumers buying more via mobile.
The report, “Mobile Trends 2011,” also predicts mobile will combine with social and local services through programs like Facebook Places to gain significant traction over standalone location-based services. However, it says that ad revenue from such services will be cut short because of privacy concerns.
The report, written by Forrester analysts Thomas Husson and Julie Ask, also predicts companies planning to reach large audiences via mobile apps will continue to face a fragmented market with a wide variety of mobile devices, operating systems and screen sizes.
The report also forecasts:
- The term mobile will mean a lot more than mobile phones. Tablets such as Apple Inc.’s iPad will emerge as a category of their own in the years to come. However, the report says only mobile phones will sell in the hundreds of millions and are truly “pocketable,” providing anywhere/anytime connectivity.
- 2011 will be the year of “the dumb smartphone user.” Because of deep discounts, smartphones will be available to the masses. That, Forrester says, means new smartphone owners will be less engaged and active than earlier Android and iPhone owners. However, thanks to customer education and the convenience that such sophisticated devices offer, even so-called “dumb smartphone users” will consume massive amounts of mobile media and data.
- NFC, augmented reality and Quick Response, or QR, two-dimensional bar codes will finally reach their tipping points. Technologies such as QR codes and mobile augmented reality, which uses the capabilities of a mobile phone to enhance a presentation, such as using the smartphone’s GPS to identify a consumer’s location and then displaying through the device’s camera view a coupon to a nearby store, are already helping bridge the real and digital worlds via mobile devices, Forrester says. And the report predicts 2011 will finally be the year that Near Field Communication (NFC) begins to matter for mobile. The market will start to move away from the pilot stage in regions where NFC infrastructure is in place, Forrester says. “There is already quite a bit of this happening in Japan,” says Ask. “More of it will occur with education with consumers in the U.S. and Europe. We’re at the very, very beginning of consumers beginning to understand these use cases with their customers.” NFC is a technology that enables phones (or other items, such as credit cards) to interact with objects—such as posters and payment terminals—over a distance of a few inches.
Several media outlets last week reported that Apple is working on adding NFC mobile payment capabilities to the forthcoming iPhone 5. Companies such as Isis have launched over the past year aiming to enable shoppers to use NFC technology to pay with their phones in stores. Isis is backed by AT&T Mobility, T-Mobile USA and Verizon Wireless, which together provide wireless services to more than 200 million U.S. consumers.
Facebook reaches out to retailers
Why this is interesting: This article gives some great examples and tips on one of the hottest new sectors to watch for: “social shopping” or “social commerce. We also added an image to show how Levis integrates social into the buying experience by adding Facebook connect technology into the email.”
Although retailers ranging from multichannel department store chain J.C. Penney to online clothing seller StyleQ have launched Facebook storefronts where consumers can make purchases on the social network, those efforts are only one piece of social commerce, says Ethan Beard, director of the Facebook Developer Network, who oversees a team that works to build partnerships with merchants and other businesses.
David Fisch oversees a newly created group within Beard’s team that seeks to develop an e-commerce partnerships group. The group is charged with encouraging retailers and other businesses to work more closely with Facebook. Those integrations may include storefronts, though the social network is not encouraging the development of those. Rather, Facebook wants to encourage retailers to integrate the social network into their e-commerce sites. In doing so, Facebook aims to encourage consumers to interact with the social network while shopping and buying.
“The storefronts are really only one piece, and really a pretty small piece, of the burgeoning area of social commerce,” he says. “Our interest isn’t in getting people to create tabs where people can shop but allowing consumers to shop wherever they are and helping them discover products through their friends.”
That strategic positioning make sense, says Sucharita Mulpuru, an e-retail analyst at Forrester Research Inc.
“All the retailers we’ve talked to say that Facebook storefronts are negligible,” she says. “No one visits them and, in fact, few people revisit a fan page after originally Liking it.”
That’s why Facebook is encouraging retailers to integrate the social network their sites, says Beard. In doing so retailers can create a more robust experience for consumers.
As an example he points to Levi’s Friends Store launched this year. The store, a section of Levi.com, allows shoppers who sign into their Facebook accounts on the site to see their friends’ birthdays, and to view just the merchandise that their Facebook friends and other Facebook users noted that they Like.
He also highlights the launch by Amazon.com of a program that allows consumers to log in to the retail site through their Facebook profiles. Shoppers who log in receive personalized recommendations for movies, music and books based on their Facebook profiles, as well as those of their friends.
“The future of commerce is social,” he says. “There is a tremendous amount of innovation and experimenting going on as companies try to figure out how to make commerce social. Commerce was always a social activity, but e-commerce has largely been a solitary activity. With the rise of Facebook and other online social experiences, people want to bring that social experience back to shopping.”
Facebook’s vision is for a consumer considering, for instance, a single lens reflex camera to be able to get advice from a friend or other Facebook member knowledgeable about SLR cameras, Beard says. Key to this is Facebook’s Open Graph, which allows the social network to gather information about Facebook users, both on the social network itself and from other web sites that tie into Open Graph.
“The guy’s friend might say, ‘Buy the Canon and here’s where I bought mine,’” he says. “That social discovery is what we think can happen throughout the web, on and off of Facebook.com.”
While Facebook doesn’t earn commissions from sales generated by such recommendations, it could potentially benefit from encouraging its users to share more information. More user-generated information on the site could encourage consumers to spend more time on Facebook, and that could help Facebook generate higher advertising sales.
“At the core of Facebook is an experience where users share information, activities and what they care about with their friends,” says Beard. “Our goal is to enable that sharing to take place.”
Facebook Messages will make life harder for marketers, a report predicts.
A consumer who uses Facebook messages as his primary e-mail account would change their address to an @facebook.com address. Consumers’ changing their e-mail addresses is not a new phenomenon. In fact, last year 30% of consumers created or switched their e-mail address, Relevancy says.
But the group’s report, entitled “The Social Inbox: The Impact of Facebook Messages on Email Marketing,” found that 46% of consumers say they plan to sign up for a Facebook e-mail address. Moreover, 9% say they will use the Facebook address as their primary e-mail account. Those numbers are even more skewed for consumers 46 and younger. Relevancy based its finding on 1,001 survey respondents.
Because the because the number of e-mail accounts is set to rise, that means e-mail marketers will have to monitor who is actually responding to their messages to avoid sending marketing e-mail to dormant accounts, says David Daniels, The Relevancy Group’s CEO. Even before the Facebook Messages rollout, 32% of marketers cited e-mail churn as their largest challenge.
“It will be a challenge to continue to engage with your audience,” he says.
That means retailers will have to use a variety of metrics to identify which audience segments are regularly opening e-mail and clicking on the offers, and which may be showing signs of churn. Marketers also should use make sure that every consumer-facing part of the organization, such as bricks-and-mortar store locations and call centers, are collecting and confirming subscribers’ e-mail addresses.
Facebook Messages will provide consumers with two main messaging folders, and the main folder—the one consumers are most likely to check—will only contain communications from Facebook friends or friends of friends. All other messages, including retailers’ e-mail marketing messages, will be grouped in an Other folder, unless the consumer designates a retailer as a friend by clicking she Likes the merchant. That means retailers will have to find ways to motivate consumers to click that they Like the retailers’ brands, says Daniels.
“It’s important that retailers give consumers a reason to Like the brand, such as Facebook-exclusive discounts, that is a call to action,” he says.
Consumers’ shift to Facebook Messages could also reduce the amount of time consumers spend checking their e-mail accounts—even if they continue to maintain a different primary account, the report adds. Even if consumers use their Facebook e-mail address solely for personal communications, that likely means they will spend more time checking that account and less time checking their secondary account, which may lower response rates to retailers’ e-mail marketing campaigns.
Ten Social Local Technologies For Marketers
by David Berkowitz , Tuesday, January 25, 2011
Social media is often appreciated for its virality, which implies a loss of control as messaging spreads beyond target audiences. Marketers still can use social media to target consumers in specific localities, or incorporate social sharing functionality into local programs. Here are ten technologies and ways marketers can use them:
Facebook Pages: Most of the time, marketers broadcast their posts as widely as possible. Sometimes, however, more narrowly targeted posts are more relevant, and relevance is a large part of keeping consumers engaged. If you’re a cheese producer and write a post about the best poutine in Wisconsin, you can choose to show the post only to your fans who are residents of Milwaukee and speak Canadian French. Pourquoi pas?
Facebook Places: Let the social network with about 600 million members get a second entry, since Places is a different animal. It’s only for businesses with physical locations, and it’s designed for mobile devices. With the added option for marketers to offer deals, Places can incorporate local promotions that don’t necessarily need to be part of the Page strategy itself.
Mobile Social Alerts: Places and deals aside, few mobile marketing offerings come directly from Facebook. TextualAds fills a void by allowing marketers to text Facebook fans who opt in to such communications. You can target consumers based on information they provide through Facebook, such as location, gender and age.
Twitter: Last year, Twitter started to show why it matters for local marketing. Trends can be monitored for certain geographies, while searches can show only the tweets near you. As Twitter learns more about where its users are -and especially about when they use mobile devices – local targeting will become one of the key value propositions for marketers.
Group Buying: Groupon may be the most prominent in this genre, but I like LivingSocial’s straightforward hook to encourage customers to spread the word about local deals: “Buy, share, and if three friends buy, yours is free.” It’s now generally a given that enough people will act on a deal, as long as they’re at least moderately vetted and have some hook where a marketer gives away something for nothing. LivingSocial keeps “social” as part of its name and its appeal.
Review Sites: I wouldn’t call Amazon a social media site, but reviews do add social elements to any retail or local business site that uses them. Sites like Yelp, Citysearch, and Menupages only survive thanks to reviews, or what we in the earlier days of social media liked to call “user-generated content.” Side note: when did references to “UGC” go the way of the widget? I never hear it referenced anymore.
Recommendations: It was only after breakfast at Norma’s with Lea Marino from startup Bizzy that I thought of breaking out recommendations from reviews here. When I wasn’t stuffing my face with caramel-drenched French toast, I was grilling Lea on what makes Bizzy different from other sites where one finds and rates local businesses. Bizzy’s focus on personalized, categorized, local recommendations stood out. The idea is you don’t need to find a place to eat that has a hundred reviews if you can choose between the two favorite sushi bars from your close friends. Foursquare and FoodSpotting operate under similar principles.
Check-in Apps: Beyond Facebook Places, you can pick any of your favorite Foursquare-esque check-in apps to find some way to reach consumers seeking local information. This year these apps will have to prove that they can scale, at least within certain demographics.
Aggregated Check-In Responses: This category is so new, I’m not sure what to call it yet, but there are already a couple of entrants. PlacePunch says it “provides easy to use loyalty and mobile marketing solutions that leverage ‘check-ins’ to deliver more customers to your business.” LocalResponse lacks any details on its website but seems to take a similar approach based on a presentation given by its founder. Since I’ve only talked with these companies’ founders off the record, I’ll refer you to those sites for now, but will have much more to say about this area soon.
This list includes many of the more compelling ways to marry social media with local targeting, but it’s hardly comprehensive, as the options for marketers grow by the day. Recommend, review, or share your own favorites in the comments or through your social channel of choice.
