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The new marketing: Are we spamming yet?

Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

The mobile phone is our constant companion, so is it the perfect device to deliver advertising?

illustration of mobile phone

People are always carrying them and they each have a unique identifying signal that automatically gives away the owner’s location. Marketers can use this information to design location-dependent messages that are presumably ‘relevant’ to the consumer.

The accuracy of the technology available to detect a person’s location from his or her unique mobile phone signal is improving all the time. Apple’s iBeacon is a case in point. Assume I have opted in via the store’s app, I can be tracked as I walk through and receive location-dependent promotions; for example I can be texted a coupon for Weeties as I go by the cereal shelves in a supermarket. 

Although in this example the promotion is relevant to my location, it is not necessarily relevant to my interests because I may not be looking for cereal at all that day. But perhaps the reason I received a coupon for Weeties is that my purchase history showed I used to buy Weeties regularly and switched to Corn Flakes three months ago. The information was shared with Weeties’ manufacturer, Uncle Tobys, which is offering the Weeties promotion to lure me back. 

The computer systems required to deliver personalised promotions like this to millions of consumers are formidable, but in the age of big data that’s hardly a show-stopper.

Catch 22 - Mobile marketing potential problems

However, the problem with personalised mobile marketing of this kind is that it shares a key characteristic with junk mail and telemarketing – it’s a modernised form of good old ‘push’ marketing delivered to a personal device, except this time it’s a mobile phone rather than a mailbox or a traditional telephone landline. 

If the consumer receives too many of these ads, or ads for the wrong products at the wrong times, or evidence that the retailer is digitally ‘spying’ on him in order to tailor the promotion, then personalised mobile marketing can become a personalised nuisance that a consumer urgently wants to be rid of.

As a result the future of personalised marketing, far from being a foregone conclusion, is now the subject of sometimes heated debate. Duelling consumer surveys are being wheeled out that demonstrate with equal conviction how consumers either love mobile marketing or hate it. 

A 2014 PricewaterhouseCoopers (PwC) report Consumer Intelligence Series, Mobile Advertising: What do consumers want? survey and focus group research across four countries – US, UK, Brazil and China – suggests that consumers in developed countries particularly are having an adverse reaction to mobile ads. 

In the US and UK, it was found that the most preferred frequency for receiving mobile marketing messages was “never”. The most common reason given for this negative response in both countries was that mobile advertising “crosses the line into personal space”, the next most common reason was “not able to turn them off”.

The only question that matters with mobile marketing

The above PwC research also found that despite the overall distaste for mobile marketing, the most important positive characteristic of mobile ads was ‘relevancy’ to the recipient’s interests. Relevance to the current location was also rated as important. 

It is exactly because of this positive evaluation by consumers of ad relevancy that many analysts and marketers believe the poor consumer receptivity to mobile marketing implied by the PwC research can be surmounted, provided that the marketers themselves can come up with the right game plan. 

Clearly, consumers are moving targets and susceptible to shifts in attitudes. Liz Crawford, vice-president of strategy and insights at Match ShopLab, a North American marketing agency and author of a well-received 2013 book on how shoppers and brands interact, called The Shopper Economy, says: “Regardless of consumer reaction, mobile ads are here to stay. The only question is how to serve them up so that they are palatable.”

Mobile marketing - How to make customers trusting instead of suspicious

Making them ‘palatable’ means getting the quantity, timing and relevance of the ads exactly right for each consumer. The trouble is that the quest for real relevance to a person’s interests ensnares marketers in a classic Catch-22.

The relevance people want can only be truly achieved if the company has intimate knowledge of their preferences, which is often obtained by tracking their ‘digital footprints’.

But this practice is apt to cause those being tracked to feel spied upon, creeped out and possibly to end up shooting the messenger. Moreover, government regulators will take an increasing interest in establishing consumer protections against excessive intrusiveness.

In Australia, very little research is available that measures the response of consumers to mobile advertising. Interactive Advertising Bureau (IAB Australia), a Sydney-based trade group that represents the online advertising industry, conducted a 2014 survey Marketing Skills for Today’s Digital World that gauged consumer receptivity to advertising on multiple appliances.

It found that advertising on mobile phones was generally better received than on television or computers. However, the result is difficult to interpret because it included all kinds of advertising, such as web ads encountered after opening the phone browser.

If Australia follows the American and UK example, marketers have a tough row to hoe in the short-term, getting people to embrace texted mobile phone ads that are both location- and interests-relevant.

The future of marketing - Where it's heading

So where will marketing eventually settle along the continuum between the traditional one-to-many model and the one-to-one model’s ‘perfect relevance’? Despite current resistance, it’s a fair bet that the answer lies closer to the one-to-one model, but with a strong proviso: advertising must be ‘opt in’ and the consumer must be able to ‘opt out’ easily with a push of a button. 

However, to suggest that in the long-term marketers will not use every iota of personal data about consumers to sell products and services is naive. So like it or not, get ready for more and more relevant marketing.

Verdict: 

Personalisation is critical to the future of marketing because consumers want it and companies stand to benefit from it. But retailers and other businesses must tread very carefully so as not to kill the goose that’s laid the golden egg. 

The kind of intrusiveness required to create perfectly relevant marketing messages on a one-to-one basis will require a significant adjustment on the part of consumers, who do not take kindly to Big Brother watching them. Over time though, marketing will edge closer and closer to the one-to-one model.

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