• August 1, 2007
  • By Jessica Tsai, Assistant Editor, CRM magazine

iPhone: Friend or Foe?

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Mobile marketing is on the rise and the June 29 release of Apple's new iPhone could be a marketer's dream come true. With more enhanced features, more people will be interacting with their phones, which means more opportunities for companies to snag consumers. However, amidst this new wave of mobile marketing technology, there are still many companies that aren't taking advantage of this resource. And for those that are, there are precautions that must be taken in order to optimize efficiency and increase customer receptiveness. So will high-end gadgets like the iPhone take mobile marketing to the next level? In a study conducted by IDC, Scott Ellison, vice president of wireless and mobile communications, reported, "Mobile marketing is one of the few mobile opportunities in which the potential of the opportunity actually exceeds its current hype." Many companies are still a little gun-shy when it comes to mobile marketing, and some don't even know the technology is available to them. Ellison asserts, "If the mobile ecosystem is fully leveraged, mobile marketing can create a very different and more relevant customer experience of marketing and advertising." Indeed, data is expected to surpass voice by 2011, says Jared Reitzin, CEO of mobileStorm. Given this knowledge, one would expect the iPhone to be the perfect venue as it has the ability to receive and view emails, SMS messages, and video and audio clips, all at great quality. Still, there is concern that the iPhone may not live up to the hype, particularly because of its extravagant cost, and concerns about its last-generation transmission speeds. The iPhone itself costs from $499 to $599, plus the cost of switching carriers if you're not with AT&T. IDC found that while 60 percent of 456 individuals surveyed are interested in the iPhone, only 10 percent are actually interested in paying full price for it. "There is a big leap between curiosity and commitment," says Aaron Radelet, a spokesman for Sprint, which, thanks to Apple's exclusive carriage deal with AT&T, has been locked out of the iPhone jackpot. (Early estimates claimed that Apple moved a half million iPhones in the first weekend of release.) Apple also announced that the iPhone will have a battery life longer than any other smartphone on the market: 8 hours of talk time, 6 hours of Internet use, 7 hours of video playback, or 24 hours of audio playback. "With the iPhone, we're gong to see a lot of ads where you're walking down the street and you get a text message from the store a block away saying, 'Hey, get an additional 10 percent off right now, come on in!'" Reitzin says. While this gives marketers a much bigger playing field in terms of frequency and exposure, too much of either can lead to consumer frustration. "Deliver what your constituents want, rather than what you want to send them. Keep in mind that your audience has a finite attention capacity," writes Chris Baggott, author of Email Marketing by the Num8ers. Moreover, mobile phones have a smaller screen, which challenges marketers to provide the most relevant and interesting information to the individual. When it comes to finite attention capacity, audio and video messages are perhaps most complex of all. An IDC survey revealed that prerolls--the short video or audio advertisements that run before the desired program--must capture consumer attention in no more than 8 to 10 seconds, the maximum tolerance level of the average audience. This further explains why many companies remain hesitant to use mobile marketing: "They're afraid of pissing somebody off," Reitzin says. Another obstacle is the fact that most American cell phone subscribers do not have unlimited text messaging and have only recently become familiar with the technology. In fact, only 40 percent of Americans who use cell phones actually text, and most of them are under the age of 27, according to the Mobile Marketing Association and Pew Internet & American Life Project Surveys (2006). And without a text-messaging plan, sent and received text messages can run from 5 to 15 cents in each direction. (AT&T service plans for the iPhone only offer 200 SMS messages per month--consumers have to pay extra for larger allotments, including an "unlimited" option.) Therefore, marketers will probably have to either limit their audience or ensure that their messages are free. There's no doubt that mobile marketing is gaining attention. But technology like the iPhone that sets the stage for mobile marketing is the same technology that gives people the freedom to address their own needs whenever and wherever they want, and not be bombarded by what other people think they want. As Reitzin emphasizes, the trifecta for mobile messages is a highly intense version of every marketing campaign: They "have to be really relevant, timely, and targeted."
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