MobiTMS unveil "TMS Green"

TMS Green
A mobile personalized interactive coupon provide by the TMS "Media to Mobile" platform

Why Social Applications Will Thrive In A Recession

by Josh Bernoff

Is a recession coming? Don't ask me -- I'm not an economist, and even the economists don't really know. But if it's anything like the last recession, advertising will plummet and experimental media will crater. (In the 2001 recession, US advertising dropped 9% and Internet advertising plummeted 27%, according to Veronis Suhler Stevenson.)

But do not panic. Things are different this time.

Here's what smart marketers should know:

• It's not a tech bubble. The last recession was caused by the dot-com bubble and the terrorist attacks. There was a lot of ignorant money out there chasing illusory opportunity, and companies had overinvested in technology. This time, the precipitating event is a housing bubble, and technology spending is not irrational.

• Awareness ads will lose effectiveness. Advertising (or as we often call it, "shouting") is mostly about generating awareness and reinforcing brands. In a recession, ordinary consumers like you and me aren't as willing to spend. Sure, we'll be aware of the product, but that doesn't make so much difference when you're worried about your future. Advertising is expensive and is a lot easier to cut than headcount. Many are predicting ad spending will hold up; I'm not so sure.

• But social applications are about consideration, not awareness. Blogs, word of mouth, social networks . . . they're about people connecting with other people. You may resist advertising if your finances are tight, but if your bud tells you that new movie is really worth seeing or that the Gap has the cutest new tops, that's more persuasive than advertising. Basically, in a recession, the consideration phase is more important than awareness -- and that's where advertising flops and social applications succeed.

• It's cheap. Social applications can be nearly free (think blogs, Ning.com, facebook pages) and even more sophisticated communities are typically $30K to $200K -- a lot cheaper than a significant sized ad campaign. After our last post, all the responses were positive. One interactive marketer from a highly cyclical company told us this:

"Budgets are tight in light of the economic conditions as you surmise, but [the budget for social applications] has not been impacted. We are still keen to move forward with our trial and have support….at this point anyway. Interactive in general has been more protected than other comms areas and saw an increase."

• It's measurable. If your social application doesn't have a measurable output, you'd better get one. But if it does -- if it generates leads, or conversions, or buzz, or something useful -- then you can prove it's working. beinggirl.com is four times as effective as TV ads, Procter & Gamble told us. That won't get cut in a recession.

These same arguments apply to some other forms of online marketing, including search ads and email marketing. Those are going to be good investments in a recession. If you're smart, you'll position yourself now with proof your apps are working. Then when the ad dollars get tight, you'll be in good shape.

Click here to see what we wrote for our clients (we've made this piece of research free for everyone).

Also on this topic, see also David Armano's post on 10 ways digital can help you thrive in a recession. And an earlier Paul LaMonica post (CNN Money) featuring my old colleague Jim Nail.

Finally: I'm anticipating this topic might get some currency around the blogosphere and the mediasphere . . . if you want to follow the reactions, tune in to my twitter feed at twitter.com/jbernoff

28 Million Mobile Subscribers Responded to At Least One Mobile Ad

by Jack Loechner, Wednesday, Apr 2

According to a new report from The Nielsen Company, twenty-three percent (58 million) of all U.S. mobile subscribers say they've been exposed to advertising on their phones in the past 30 days. Half (51% or 28 million) of all data users who recall seeing mobile advertising in the previous 30 days say they responded to a mobile ad.The bi-annual Mobile Advertising Report from Nielsen Mobile, of more than 22,000 active mobile data users, reveals that:

• The number of data users who recalled seeing mobile advertising between the second and fourth quarters of 2007 increased 38% (from 42 to 58 million subscribers)
• Teen data users (ages 13-17) were the most likely age segment to recall seeing mobile advertising (46% recalled seeing some type of mobile advertisement, compared to 29% of all data users)
• Asian-Americans and African-Americans are more likely to recall mobile advertising (42% and 40%, respectively) than all data users
• 26% of those who saw an ad responded at least once by sending an SMS text-message, the most popular ad response. 9% say they've used click-to-call to respond to a mobile ad
• 32% of data users said they are open to mobile advertising if it lowers their overall bill
• 13% (18% of males) said they are open to mobile advertising if it improves the media and content currently available
• 14% said they are already open to mobile advertising so long as it is relevant to their interests
• 23% expect to see more mobile advertising in the future (up from just 15% in Q1 2007)

While just 10% of data users said they think advertising on their mobile devices is acceptable, an increasing number of mobile users appear to understand the value proposition of ad-supported mobile content, says the report

The report concludes that advertising researchers must examine the ways in which audiences are and are not willing to engage with mobile advertising, as media companies and marketers explore the unique ways they can interact with consumers supporting mobile media content through advertising revenues.

A great post this week from the carnival of mobilists

Chetan Sharma posts a hugely informative End of Year (EOY) 2007 Global Wireless Data Market Update.

.... As you read this End of Year (EOY) 2007 Global Wireless Data Market update this week, somewhere in India, a new subscription will catapult India over the US as the number 2 global wireless market. 2007 was a banner year for global wireless data market. The global service revenues for the year touched $700 billion, the data service revenues were more than $120 billion, China signed its 500 millionth subscription, and both India (in feb 08) and the US crossed the 250 million subscription mark. 2007 continued to enhance mobile data’s role in the operator ecosystem with approx 17% of the revenue is coming from data services.

For some leading operators, data is now contributing up to 35% of the revenues however increase in data ARPU is not completely offsetting the drop in voice ARPU. From the true and tested SMS messaging to new services such as Mobile TV, Enterprise apps, and others, different services helped in adding billions to the revenues generated for 2007. Japan and Korea remain the envy of the global markets and the countries to study and learn from w.r.t. new services and applications. The US market has been steadily making strong comeback and for the first time exceeded Japan in service revenue generated from mobile data.........

A shift away from tight carrier control will help the mobile industry to grow!

A shift away from tight carrier control will help the mobile industry to grow, according to some advertising and content providers.

Standardized advertising, a consistent experience for consumers and a proliferation of content are among the windfalls anticipated by panelists at the Mobile Entertainment Summit, held alongside the CTIA Wireless show in Las Vegas on Monday.

In the U.S., although most mobile phones have a Web browser of some kind, online content and applications in the relatively easy-to-use "decks" offered by mobile operators have to be approved by the carriers. Some content and software creators describe this as a bottleneck that effectively stifles innovation, although the carriers claim their systems are already open. Google's Android software platform, Apple's iPhone software development kit, Sprint's WiMax plan and an "any device, any application" requirement for part of the recently auctioned 700MHz spectrum all have been promoted as ways to open up the U.S. mobile market.

"Openness is just the kernel of standardization, so that ads can be standardized, so that content can be standardized, so the consumer can experience things in a common way and really assign the value that they today assign in total to the operator, to the various people in the ecosystem," said Paul Palmieri, CEO of Millennial Media, a mobile advertising firm. That, in turn, will bring more advertisers and content to mobile, he added.

Carriers are already becoming more open to outside brands controlling their own mobile offerings, said Brandon Lucas, senior director of mobile business development at Infrastructure Corp.'s MySpace. That helps consumers connect with the brands that are important to them on mobile, Lucas said. "We're very, very happy about that," he said.

"We expect there will be a lot more content available," said Angela Steele, vice president and account director at marketing firm Starcom. "More quality content means consumers will be out there more" and available to advertisers, she said. In addition, the changes should let marketers reach consumers in a different way by developing their own applications, she said.

While acknowledging some surveys have shown that consumers don't like mobile advertising, the panelists said it is welcomed if tailored to particular consumers.

MySpace can target ads to mobile users based on age, marital status, sexual orientation, ethnicity and whether they have children, among other factors. Lucas said he doesn't know of any negative feedback against its mobile ads.

"I think we've already proven out that consumers are fine with advertising," Lucas said.

AT&T keeps its advertising prices high to prevent low-grade "dancing monkey" ads that would irritate subscribers, said Matthew Hull, director of advertising services for AT&T Mobility.

Mobile advertising's moment is coming, according to Starcom's Steele. Whereas 2007 was a year of interest by many big advertisers, 2009 will be a year of action, she said. This year is a time of transition.

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