Proximity marketing comes of age –

Tim Ellett 3i January 2011

Traditional marketing channels are having less and less impact on influencing consumer behaviour and arguably, in today’s marketplace traditional advertising is “dead” as the most effective means of engagement with an audience

Certainly other channels are becoming more influential with community “likes” of products and services being regarded with more importance than what the manufacturer or retailer says, whether on Facebook, Amazon or other third party sites.

In a 2010 study by McKinsey and Company in America, they concluded that for branding and marketing in the digital age, most companies were still spending their money in all the wrong places (ie. Traditional advertising)!
(Source: Branding in the digital age. David C Endelman McKinsey & Company)

Proximity based marketing is a way of building closer engagement with the consumer, providing media rich material and customized offers and promotions that are “instant” when delivered to a mobile phone.

Our approach

We have been actively exploring and working in the mobile phone channel for the past two years and have developed a value chain for this channel which increases in “value” to the consumer in terms of richness of media and level of interactivity.

In New Zealand 95% of all mobile marketing promotions have been focused on the very first circle to the left of the chain. Whilst the text to win or similar approaches work, they only scratch the surface of what is currently do-able using this channel. This means that there are real opportunities for early adopter companies to take ownership of the mobile marketing channel and move the consumer up the value chain. Success lies with the content and the offer as much as with the channel that brings the material to the customer.

A blog comment from a “clued up” QR code user for Best Buys in the US said:
“I was disappointed. This could have been much more viral if the content was better suited to the environment. Users who engage with your brand via the mobile web are interested in shareable, friendable, and valuable info (target rich info) about your brand. Make it stick!” (source: Nick Ford).

Mobile phones as a channel

As recently as the 18th December 2010 it was announced that Nokia had sold 26.5 million smart phones in the third quarter of the year, up 60% on the prior year, Apple had sold 14 million.

Smart phones are outselling non smart phones by 6 to 1 and whilst New Zealand is lagging behind, the availability of cheaper data plans means that the smart phone in New Zealand is positioned to dominate in 2011. This means that there are great opportunities to use the mobile phone as a marketing channel  - even to take ownership of a channel for those companies prepared to jump in and be early into the market.

QR codes

A QR or quick response code is a 2D barcode that turns your phone into a bar code scanner. Simply take a picture of the bar code and use a bar code reader app available as a free download or already bundled with most smart phones to unlock content rich data – anything from a coupon to a video. Unlocking the bar code with the reader loads up a web page or link with the promotion or rich media file, so in this case, the user will need to be able to access the internet from his phone

Bluetooth

The advantage of Bluetooth over QR codes is that you do not require access to the internet, you simply need to have Bluetooth on your phone, have it turned on and discoverable. Even older “non smart” phones are Bluetooth capable, and as many drivers now use Bluetooth in their cars, there is a good chance that it is on and discoverable.

Although it is possible to “bluespam” randomly to passers by, we do not advocate this, but to use Bluetooth in a controlled environment. This is because the downside of Bluetooth is that for most phones, you need to be looking at your phone when Bluetooth asks you to receive information. If you do not accept to receive, it simply passes you by. The positive side to this is that it is therefore permission based advertising.

Information panels and instructions for use

A key learning from our past experience with Bluetooth is that for these newer technologies we have to make it clear to people what to do in order to engage with the brand. See below the Bluetooth postering that we developed for the North Harbour Stadium rugby games:

Conclusion

There is no doubt that proximity marketing and mobile phones as a channel will become more and more popular and accessible in the near future. It is those companies who are ready to take the lead and test the technology who will get the benefits of first mover advantage.


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