Status of Mobile Marketing in CANADA

Today, seventy percent of all Canadians are mobile subscribers. We are active users as well; texting over 20 billion times in 2008. Four million of us browse the mobile web more than once a week. I use it everyday. Relatively speaking, we are just as active as any other major market – even though our carrier fees are astronomical. We are also good marketers. Toronto represents the 7th largest DMA market in North America, and the nation as a whole spends over 19 billion in marketing a year. Given all this, we would expect Canada to comprise some share of North America’s mobile marketing spend. Alas, we are not even “a blip on the radar”, spending less than $5 million annually on mobile marketing and advertising. In the US, a $5-million dollar spend can account for the budget allocated by just a single company (albeit a very large company). In this sector, Canada doesn’t even measure up to the 10% rule (i.e. brands spend 10% of their total US marketing spend in Canada).

The reason for this lag has in part to do with our current economic condition, as there is no question that Canada’s marketing industry was hit hard by the recession. Funding for new ventures evaporated, countless marketing roles were axed, and agencies were forced to deal with considerable budget cuts. In such a climate, agencies and brand managers seeking to get CFO buy-in have been hesitant to pitch anything new. Rather than exploring new ways to improve the ROI of marketing & advertising initiatives, whatever money remaining in a marketing budget is often allocated to “tried” but not necessarily “true” methods. We cannot blame the agency or brand manager, as it’s abundantly clear that the value proposition for mobile marketing has not truly been accepted. The risk of launching an unsuccessful campaign is perceived as too great, no matter how little the costs are. But, rather than dwelling too closely here on why Canada is not yet active in mobile marketing, I want to spend time exploring the ways in which we can enhance our role in this field.

Improve the Message: Mobile adds legs to any media initiative

The reality is that for the most part, Canadian technologists and mobile believers have not done a good enough job of evangelizing its merits. There is too much confusion around how mobile lines up against other marketing technologies such as email and social media, and, moreover, around what demographics would be receptive (not just teens!). Unlike other mediums, mobile should not always be viewed as a standalone, but considered instead as part of an integrated buy across all media channels. This means campaign success is not measured in CPMs, number of subscribers (i.e. traditional media), volume of emails or clicks, but in creating a distinct population of highly engaged consumers across any media.

Value Success: Mobile is about conversion and lead generation

The language commonly used to communicate results (ROI!) is not well understood when it comes to mobile. Why? Because of the huge number of cell phone subscribers out there we tend to think that any mobile campaign will easily deliver millions of responses. We worry more about capping costs than about understanding the value of each interaction. Mobile devices are more personal to us than, say, our PCs, and the act of texting, downloading an app or calling up a mobile site is therefore so much more significant than a simple click. Mobile marketing is about clear conversions, extending the reach of existing media and, most important of all, its success is very dependent on how integrated it is across the entire marketing mix.

Buzzwords aside, consider this scenario: a big consumer brand launches a campaign to create awareness of new product. The launch entails TV commercials, billboard ads and online ads. The campaign concept is to distribute special offers for the new product in tandem with educating consumers about its new, improved features. At each media touch point (TV, billboard or online ad), the consumer has the ability to find out more information and take advantage of special offers instantly by using their mobile phones. In the case of billboards and TV ads, the consumer is instructed to send an SMS to a short code or query a mobile site in order to have information about the product and special offers sent directly to their phone. In the case of an online ad, a user can click on the ad and link to a form where they enter their phone number to receive the same special offers and product info on their phone. Whether offline or online, a person who takes the initiative to interact with a brand’s advertising content is a very interested and engaged consumer. They are, in essence, a qualified lead. And given the way we tend to feel about our phones, a mobile consumer (phone number) is worth so much more than an online consumer (email address). Determining the success of such a campaign comes down to looking at the general audience reach of each channel and then measuring how many individuals actively engaged to receive content – hence the conversion rate. As technologies advance, consumers will soon be able to interact with traditional media to make purchases directly from their phones, effectively closing the loop between advertising message and completed transactions.

Make the Budget Work with the Decision-Makers

If the pitch is right, and the marketer gets buy-in, the next major challenge is figuring out how much budget to allocate and selling that through to the decision-maker. Often, campaigns are killed on the boardroom table because there is no buy-in for the proper budget (too much or not enough). The IAB recently published its mobile buyer’s guide disclosing that typical US mobile advertising budgets range from $15,000 – $150,000 +. In Canada, a recommended approach (echoing the thoughts of mobile marketing veteran Phil Barrett) is to allocate 10% of today’s media budget to engage mobile users. That percentage should no doubt increase as brands become more educated and accustomed to buying into mobile marketing initiatives. But for now, the key issue is to be able to carve out enough budget to conduct effective and successful mobile campaigns, and prove to decision-makers that mobile marketing is the right route.

Broadcast the Message: Energy + Knowledge = Growth

Too few case studies, credible research studies or events have been published or held to educate Canadian marketers on why they must start thinking about mobile. The MMA doesn’t even yet have a real presence in Canada. Certainly some inroads to counteract this were made this past year. In particular, Marketing Magazine held the Mobile 2.0 Conference in Toronto this summer and welcomed over 300 agency workers and brands. In addition, the first ever Mobile Innovation Week will be held September 12-16th, also in Toronto. It is anticipated that the MMA will bring a chapter to Canada, and that more events and successful case studies will be published in the not-so-distant future. Increasing our education of the industry is critical to cultivating a thriving Canadian mobile marketing market. We need to move beyond looking at what our US and European counterparts are doing and set expectations based on knowledge of our own consumer behavior and marketing activities.

By clarifying the pitch, getting buy-in on budget, and broadcasting campaign results (educating in the interim), Canadian marketers can expect to increase their presence in mobile marketing and in doing so renew their once coveted status as innovative marketers. Mobile is truly an excellent extension to any form of media. Instead of an isolated channel, it is the medium by which consumers interact with advertising content in a meaningful & measurable way. Given that 2 out of 3 Canadians are mobile subscribers, the audience is certainly there. We just need to put the time into reaching them effectively.