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It is so intimate that it is dangerous – but exciting. Mobile marketing offers an unmatched channel for one-to-one relationship building, though poor campaigns can burn a brand in seconds.

Mobile marketers use text messages (SMS) and multimedia messages (MMS) to reach consumers on one of the most personal devices people possess, their mobile phones.

Some foolish marketers are attracted by the low-cost opportunity to spam millions in seconds. But more rational minds use targeted campaigns that encourage consumers to initiate a relationship, building trust and tying them into a community.

The main attraction of mobile marketing is that, unlike direct mail or e-mail, people tend to read the message.

Ben King, marketing manager of WIN, a mobile messaging ser-vice provider, claims that 94 per cent of text messages get read, usually within an hour of receipt.

Response rates for well designed mobile marketing campaigns can easily reach 25 per cent, says Tim Dunn, who heads marketing services at Mobile Interactive Group. Even more common results of between 7 and 10 per cent are well above direct mail rates that often hover just above zero per cent.

“The key to successful SMS marketing is relevance,” says Ariya Priyasantha, managing director of ActiveMedia Technology, a mobile content aggregator.

He points to a programme by Hutch India that allows customers to download coupons to their mobiles for two-for-one offers at nearly 400 retail outlets in India: “Customers get a sense of personalised communication delivered direct to their pocket, since they initiate the dialogue. Only a one-to-one phone call can beat that level of personalisation.”

Most mobile campaigns today are inbound, usually prompting consumers to send a text message to a short number code. In return, they receive product information, free content or the chance to win prizes.

When Peugeot introduced its 1007 compact car in the UK, television and billboard advertisements carried a short code that allowed people to reserve a test drive at the nearest dealership.

In Israel, Coca-Cola sends coupons via an MMS with a bar code that can be swiped directly from the mobile phone.

Some applications are more subtle. One UK insurance company sends customers an SMS five days before a policy expires, warning that they will soon find themselves without cover. The result has been a 20 per cent reduction in churn.

Nonetheless, mobile marketing can be seen as intrusive. E-mail spam and ring tone frauds have made consumers wary of granting access to their mobile numbers.

“Brands are still nervous about what they can do with mobile,” says Mark Jones, UK sales director of Mobile 365, a messaging service provider. Gartner analyst Daren Siddall agrees: “There has to be a value exchange with consumers, and that is what companies have a hard time with. But future marketers will have to learn to deal with this.”

So far, mobile marketing has not grabbed the attention of traditional advertising agencies. “SMS hasn’t offered an opportunity to big agencies because of the low fees. They are looking for six or seven figure deals,” says Mr Siddall.

Rather, the industry is being pushed by a vast number of specialist agencies and SMS aggregators. The result is a cluttered sector that seems to be gradually orienting itself. Often, the lines between the creative role, the agency managing the campaign, the messaging platform provider and even the mobile operator are confusingly blurred.

“We’ve expected consolidation but the fact this hasn’t occurred says the money is still coming in,” says Mobile 365’s Mr Jones.

The lack of heavyweight above-the-line agencies has probably kept mobile marketing from integrating more fully with the broader marketing mix.

Many mobile campaigns appear as one-off tests that fail to deliver long-term relationships. “Most brands are doing bolt-on mobile campaigns. Only a few are building it in from the ground up,” says Mr Dunn of MIG.

“For every innovative campaign we develop, we get half a dozen ‘text to win’ offers. These fall well short of realising the full potential of mobile as a marketing tool,” says Steve Procter, chief executive of iTAGG, a mobile marketing agency.

Another obstacle for brands seems to be the difficulty of measuring the effectiveness of mobile campaigns. A survey of 50 leading companies, commissioned by software company Airwide Solutions, showed that 58 per cent of respondents were unsure about how to implement and measure an SMS campaign.

But this is not keeping big brands away from sophisticated mobile marketing. Coca-Cola in the UK is running an interactive World Cup campaign in which customers send in photos via MMS to win match tickets and other prizes. “People love peer-to-peer content. And these campaigns allow them to be part of the brand,” explains Mr King.

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