Overview

In the world, there are:

- 85 Million iPods
- 850 Million Registered Automobiles
- 850 Million Personal Computers
- 1.3 Billion Landline Phones
- 1.3 Billion Internet Users
- 1.5 Billion Each of Television Sets and Unique Credit Card Holders

There are 3.3 Billion cell phone subscribers, and this number has grown from 2.1 Billion in 2006. There are over three times more cell phone subscriptions than PC users and over twice the number of credit card holders or fixed landline users or televisions.

This paper will discuss the emergence of mobile marketing; mobile information; electronic commerce sites; the differences between the mobile web, the Internet and SMS (text messaging); and how the iPhone changed our view of mobile devices.

Mobile Technology in the United States

The United States has been trailing the rest of the world in mobile technology and communication since the turn of the century. This can be attributed to two primary factors.

First, unlike the rest of the world, the proliferation of personal computers in the United States was widespread in 2000. PCs were in homes, offices, schools, libraries and Internet cafes. Because of the easy access, Americans turned to email for their secondary form of communication (in addition to phones/voice). The rest of the world turned to SMS, or text messaging.

Second was the resistance of U.S. mobile service providers to allow for inter-carrier connectivity. Consumers with T-Mobile service and consumers with Verizon service could not text each other for several years. The U.S. carriers finally realized that SMS usage is a driver of growth in the mobile communications industry and is the first step to consumer understanding of the multi-faceted uses of mobile phones.

In 2004 U.S. mobile service providers released the inter-carrier restrictions on text messaging and the United States' growth in mobile usage and technology is now on the same trajectory as other countries. But there is still a gap between the use of mobile technology in the United States and in Eurasia that is most distinctive in four significant elements. These elements, as detailed by Tomi Ahonen Consulting are:

1. Per Capita Penetration Rates with Cell Phone Subscriptions

Currently, the United States has an 85% cell phone subscription penetration rate. However, Finland, Sweden and Italy reached this same rate in 2001. By 2002 the United Kingdom, Israel, Austria, Denmark, Hong Kong and many other countries had reached 85%. Currently the United States is second to last in cell phone subscription penetration rates of industrialized countries, higher only than Canada.

2. Network Adoption by Technology Generation

The United States was one of the last industrialized nations to adopt 2g networks and then again to launch 3g networks. Even in U.S. markets that have launched 3g networks, not all carriers have upgraded to allow for consumer use of 3g. In contrast, Italy rolled out 3g networks in 2000.

3. Quality and Innovation of Handsets

The iPhone is clearly the "hottest" phone and has the most brilliant user interface available today. However, the actual technology on the iPhone is nothing spectacular. The 2 megapixel camera is well behind the 5 and even 10 megapixel camera-phones available in other countries. The 2.5g network clearly lags 3g which is widely available and NextG which is the norm throughout the rest of the world. Nokia, Samsung and SonyEricsson do not even offer their top phones in the United States, preferring to sell these in countries such as the Philippines and South Africa.

4. Mobile Services, Specifically SMS Usage

SMS is the most widely used mobile data application in the world. In the United States, only one SMS message is sent per day per cell phone, placing the United States second to last among industrialized nations trailed only by Canada. The United Kingdom hit this frequency number in 2002 and Finland in 1999. The global average is 2.6 text messages per day with Koreans sending on average 10 text messages a day and Philippinos 15 text messages per day.

Mobile Technology Penetration

So, with an understanding of the United States' mobile technology in relation to the rest of the world, let us take a closer look at the global market as detailed by CommunitiesDominateBrands.com. The current world population is 6.6 billion people.

Cell phone subscriptions equal 50% of the world population and twice the number of credit card holders. Of the 3.3 billion cell phone subscriptions, 2.6 billion are unique users, thus 700 million people carry more then one mobile device.

The current United States population is 301 million. There are 255 million cell phone subscriptions. Of the 255 million cell phone subscriptions, 219 million are unique users, which translates to 73% of the U.S. population owning one or more cell phones. This is three times the number of iPods in the world! There are business executives, newly employed, and low-modest income individuals carrying more than one mobile phone. Some consumers want separate work and personal phones, and some low-moderate income consumers want different subscriptions with different carriers for international and domestic calls. At this rate, the number of U.S. cell phone subscriptions will soon exceed 100% of the U.S. population.

Eric Schmidt, CEO of Google in early 2007 said, “Mobile phones are cheaper than PCs, there are three times more of them, growing at twice the speed, and they increasingly have Internet access. What is more, the World Bank estimates that more than two-thirds of the world's population lives within range of a mobile phone network. Mobile is going to be the next big Internet phenomenon. It holds the key to greater access for everyone - with all the benefits that entails."

According to a 2007 study conducted by Korn Ferry, “77 percent of respondents believe that mobile communications devices (phone, handheld, laptop or pager) primarily enhance their work/life balance, rather than impede it.” If this is true, that executives overwhelmingly believe in the importance of mobile communications, then the United States will unquestionably continue to increase the development of mobile solutions to meet this market demand.

To summarize, we have established that the mobile industry is far and away the #1 technology on the planet. Half of the world population subscribes to a mobile device service. Total service revenues for mobile subscriptions, not including handset hardware sales, exceeded $720 billion in 2007. And cell phone usage is purported to be addictive.

Benefits of Mobile Information

The mobile device provides us with immediate gratification. You can get information easily, when you want it, where you want it, and how you want it. It is also the most efficient way to reach people, as 92% of cell phone users always carry their cell phone. A text message is opened and read on average within five minutes and responded to within fifteen minutes. An email is opened on average within 24 hours and responded to within 48 hours. There is little to no SPAM on cell phones as all programs must be opt-in where over 90% of email is SPAM.

The Mobile Web is NOT the Internet

The mobile web is exploding all around us. Yet if you ask individuals about their mobile web or wireless application experience, overwhelmingly you get a negative response. This is not only understandable, it is also accurate. There are over 1,500 different handsets available around the world. Of those, there are over 450 different configurations. Differing screen sizes, operating systems (Symbian, JavaME, Windows Mobile, Linux, Palm, Brew, iPhone, Blackberry), and carriers choosing different settings available on a cafeteria type selection platform for the same phones are reeking havoc on mobile web and application developers. The iPhone browser will not run programs developed in Flash or Java. We can not expect consumers to embrace a mobile web experience with confusing and convoluted content.

The problem is the widespread belief that the Internet and the Mobile Web share the same functionality. The mobile web is not the Internet! The mobile web is a medium in its own right. The mobile web offers something completely and fundamentally different from the Internet:

- Quick Finds Not Searching
- Quick Information Not Browsing
- Quick Views Not Watching
- Quick Payments Not Shopping
- Making Your Customer's Life Easier by Solving a Problem!

Remember the first Internet websites? They were very basic and generally had incredibly limited functionality. That is because the Internet began with companies trying to develop applications that were cool and unique, but they did not have a clear consumer need that they were trying to meet. Trying to make the mobile web mirror the Internet puts us right back in that confusing and dysfunctional place. We need to think about the mobile website and what it can provide. What are you trying to achieve and allow? Is your site optimized for the mobile web? What do customers see when they go to your site on their mobile devices? Do you have different pages/interfaces available based on the type of device accessing your site? Have you considered m.site*, mobile.site* or site*.mobi. to enhance your users experience? The following points should be considered as you build out your mobile web:

- Is mobile-relevant information easy to find? Spend your resources on ease of navigation!
- Keep content to a minimum. Remember, this is not the Internet!
- Provide a familiar and non-threatening path to your content
- Your content must appear correctly the first time.
- Experience what your consumers are seeing on their cell phones by repeatedly testing your mobile site on a multitude of devices.

Cell phones are being replaced every 18 months, compared to personal computers being replaced every 42 months. It is incredibly difficult to keep up with applications that take almost 12 months to develop and test if the hardware has been replaced by the time the application is completed. Content must be organized so that information consumers need most while on the go is accessible via a mobile web browser or application. How can your organization complement its existing content by offering up quick solutions via a mobile website?

Consider one simple example. A new restaurant has opened up in your area that you want to try. The service is slow, the menu choices are not clear and you can't really tell what the food is on your plate. When you have so many other options for food, why would you return to this restaurant? When users go to a mobile website and have a bad experience, they simply do not return. Instead, they use different ways to meet their needs and get their information. Do not use your interactive and marketing budgets to drive consumers away from your business!

What Consumers Want

What do consumers really want from the mobile web? Easy – the same thing you do! They want to have solutions and conveniences. They are traveling, but want their daily coffee and just want to quickly find the closest store location. They are on the way to an appointment and want a map/directions to help them get there. They want to quickly get the weather or a sports score when they are not near a television or the Internet. They want store coupons on their way to shop. They are placing a quick order or reservation. These are quick answers to their needs that add convenience to everyday life. They do not want to shop for a pair of shoes on a mobile device, which requires browsing and takes more time. They want quick, short solutions and conveniences for their daily lives.

CBS Mobile Chief Cyriac Roeding recently said “Let’s make it simpler–let’s talk about usability, let’s not talk about the next 15 menu items, and let’s not try to copy another medium … If you are trying to make this the next online page, you will fail…because this is a new medium in it’s own right.”

Consumers are buying and wanting solutions, not technology. A fast and comprehensive solution results in a high adoption rate.

The Introduction of the iPhone

Just as American Idol can be credited with teaching the general public how to send text messages, the 2007 introduction of the iPhone can be credited with introducing the masses in the United States to the mobile web and the potential of the mobile device. The iPhone offers a brilliant user interface and showcases what is possible via a cell phone. You want to make a phone call, push the green button. You want to check the weather, push the blue button with a sun picture. You want to check your calendar, push the white calendar button. Send an SMS, push the green Messaging button. Surf the web, push the blue browser button. Simple, straightforward functionality on the iPhone also includes photos, maps, and stocks. No need to guess where the primary services are, they are all on the main screen!

In addition, iPhone users are browsing the web at five times the rate of other browser-enabled phones because iPhone users were forced to also buy the data package allowing for the ability to surf the mobile web. When people pay for things, they generally use them. Here, Apple not only made it easy, but they found a way to drive adoption by pushing consumers to try the service.

The Mobile Web: A Success Story

We are routinely asked how to provide a successful mobile experience. The answer is by developing your site to supplement and complement other activities and services. ESPN.com’s NFL content received more visits from mobile devices than personal computers during a 24 hour period spanning January 5-6, 2008. This was the first weekend of the NFL playoffs. They recognized a consumer need for quick access to scores and a few columns. They developed a site that consumers could access while they were in front of a television watching other games or while they were away from the television or Internet all together. They understand why people are coming to their site from mobile devices. They deliver fast and easy access to scores and relevant content via their mobile website and through SMS. This is what the consumer wants and demands.

Securing Electronic Commerce Transactions

Billions of dollars are lost every year in credit card and banking fraud. However, by simply adding one additional step to a transaction, fraud can be severely limited. Every website requires registration before a purchase. In addition, all banks require registration before one can manage their account online. Imagine the simplicity of capturing just one more piece of information during registration – the consumer's cell phone number. Each and every time an online transaction greater than a set amount is attempted, a random four-digit code will be instantly sent via SMS to the cell phone on the account. A pop-up window will appear on the purchase screen and the four-digit code must be entered before the transaction will be completed. Not only must someone be in possession of your credit card but also your cell phone to complete fraudulent activity.

SMS: The Most Used Data Application on the Planet

Currently, not quite 10% of Americans actively utilize the browser on their mobile device for browsing. However, the number is closer to 50% when it comes to utilizing text messaging. Text Messaging is the most used mobile data application on the planet! There are 2.4 billion text messengers in the world. This means that 1 in 3 people on the planet sends and receives text messages. It has been proven as addictive as cigarette smoking in a University of Oxford study. Total annual revenues for SMS exceeded $100 billion dollars in 2007. And SMS dwarfs other electronic messaging protocols such as email (800 million users worldwide) and IM (500 million users worldwide).

A few short facts on SMS:

- 94% of Messages Are Viewed
- 62% of Messages Are Remembered
- 22% of Value-Added Messages Are Forwarded
- Consumer Participation Triples when Mobile Platforms are Integrated into Marketing Campaigns
- 89% of Major Brands Are Planning to Market Via Mobile Devices by 2008

Mobile Marketing Specifics

All SMS marketing campaigns must be opt-in. Consumers must not receive SPAM via text message. All messages must be approved or requested by the recipients. One in three U.S. mobile subscribers, or 78 million people, saw or listened to an ad on their cell phone during the last three months of 2007, according to a Limbo study. The vast majority of these were via text messaging.

How does SMS work? If you want to find your nearest Steakhouse, simply text in “STEAKHOUSE + ZIP CODE” to 39044. If you are house shopping and you are sitting in front of a home for sale, simply text in “HOME 515” to 39044 and within 3 seconds receive back price, bedrooms, baths, etc. on the home for sale. SMS’ global availability and instantaneous nature places it in a unique position to add value to travel-related services. Mobile applications are limitless and include for example, real-time flight times and alerts to delays, changes, or cancellations, travel time/flight/check-in reminders, arrival alerts to friends, e-Tickets, destination info and automated terrorism alerts.

We have known for some time that the control of media is switching away from marketers and message makers and toward consumers. Brands must invite the consumer to interact with the brand on the consumer’s terms, when and how the consumer wants. And we know CIOs are looking for new communication tools to strengthen their relationship with the consumer.

For Marketers and Advertisers

Every year companies spend billions of dollars to create awareness of their products and build their brands. Media budgets are spent on print publications, radio ads and integration, television ads and integration, billboards, and other “physical world” places to communicate their messages. Yet 44% of mobile users between the ages of 18 and 60 fail to respond to physical world advertising campaigns because they simply forgot the brand name or contact details. Now stop and think about what you have with you over 90% of the time - your wallet, your keys and your cell phone. Which of these will allow you to connect with your consumer and invite and allow them to interact with your brand on their terms? Which of these items will help you retain the nearly 50% of consumers who will forget your advertising on other media?

Remembering that the medium is the message, how much more does it cost you to add “For More Info Text MYCOMPANY to 39044” where you have listed your 1-800 number or web address? You have now converted your media from mobile marketing to mobile information! You have made your ad trackable. You have made your ad viral. And you have given the consumer what they want when they want. All for the cost of simply adding a few words to already existing and paid for advertisements. The consumer did not have to wait on hold or fumble for a pen as they drove down the freeway. The consumer did not have to get up from their couch to go log onto their computer as they read their magazine. The message was delivered within seconds and now your information is on their cell phone.

In early February 2008, Google CEO Eric Schmidt gave a speech at the World Economic Forum. In this speech he is quoted as saying “The arrival of a truly mobile Web, offering a new generation of location-based advertising, is set to unleash a huge revolution. It's the recreation of the Internet, it's the recreation of the PC (personal computer) story and it is before us -- and it is very likely it will happen in the next year."

The emergence of mobile technology is here. We simply ask, knowing now what seems to be apparent, what are you doing to position your company and consumers to take full advantage of this new and powerful medium?