From advertising to the masses to engagement marketing

November 12th, 2004

Fact: Today there are 15 million 3G users in the world totalling a staggering $10 billion of revenue.
Forget the PDA or the PC, its going to happen on 3G.
But the thorny question is what will these services look like that drive uptake from the majority to swap their old phones for the new 3G.
You don't have to go far to see the answer, and its not Premiership goals.
Apple i-Tunes is a data rich proposition, the technology is relatively simple and it has created what we call "new marketspace", which means that there is value created for the customer above and beyond the technology delivery system. Companies such as Motorola and BMW are introducing i-Pod capability to their own products to capitalise on this sudden hit. 3G services must be deployed with these lessons, not like WAP was launched four years ago.
The i-Pod is a seamless experience allowing people to roam at will, listen, download and share their favourite music. There was even a flash-mob event recently on Liverpool Street station where a group of i-Tunes fanatics got together to bizarrely share their love of the i-Pod, silently.
It is true that customer advocacy drives growth, and 3G must deliver on this truth.

The advertising and marketing of the Apple i-Pod and i-Tunes merely reinforces the popular groundswell of enthusiasm for this little device. Rather than delivering advertising and marketing communication messages which stretch beyond the bounds of credibility what the real customer experience is going to be. There is a powerful i-Pod community that has only started to discover its power.
Another example is from Hong Kong and the area of music.
Following the lead of Hong Kong pop music duo Twins, who released their own line of branded mobile phones, subscriptions, phone covers, ring tones, logos, etc in 2002, a range of music artists from rap artist Nelly to Heavy Metal rockers Kiss have now embraced this powerful way to connect with their fans. By providing pre-installed music, custom games, a fan letter, chat, and special offers on upcoming music releases and concerts, musicians are laying their stake on the most communication powerful tool in the pockets of their fans.
The key for the operators is to learn to understand their customers in a new way. No longer is it enough to identify segments of user types, now the real power is discovering what are the communities we interact with, as the Jouko Ahvenainen, the Chairman of Xtract Ltd the automated customer analytics solutions company says, "It is not enough for 3G operators to analyse individual customers behaviour, they must now learn to isolate the social networks among the customer base, and start to market to the most influential of the groups."
Through the power of the influential members of communities, can 3G operators efficiently target their marketing activities to deliver the holy grail of increased profits.
In the same way that companies have P&L accounts, one could argue that customers also have theirs.

These are based upon 'Value'
The customer value P&L:

  1. Value for money
  2. Value for time
  3. Return on attention – was it worthwhile paying attention to this thing?
  4. Emotional return was it a cause of happiness or hassle?
  5. Return on labour – was it worth it?

The above examples clearly demonstrate a return on the P&L. Which means customers are happy to pay for the service.
As we live in a increasingly information rich world, there is an economic need for brands to deliver 'engagement' via 'value-added' content or services to their customers. It is no longer acceptable to push unwanted interruption at unsuspecting consumers, now we must enable communities to share. As 3G business guru Tomi Ahonen explains in his book m-Profits: Making Money from 3G, "In a connected age, sharing information is power." The future will bring ever more potent communities, the smart mobs, who will lead opinions and increasingly provide a counterbalance to traditional interruptive marketing.
Another likely candidate however could be the local Press. The critical issue for all news groups is that readers of newsprint are ageing, and young people are learning to access content via digital platforms more and more. The habit of reading newspapers amongst the young is declining. The economic wave of change, driven through the convergence and the falling cost-line of technology, coupled with changing customer behaviour can be seen as either terminally life threatening, or life enhancing.
And it is important to remember that regional papers form the second largest advertising medium behind television. According to the Advertising Association, advertisers in 2002 spent £2,870m with the regional press, increasing its share of overall media expenditure to 21%.

Regional and local newspapers, vital parts of their communities for decades, need to evolve to survive. This must include using digital channels to create audience contact and new revenue streams. This does not mean posting the same newspaper content onto a website for free and expect the readers to be satisfied.
Again the future lies in 3G. Mobile services must enhance the reader experience, allow communities to connect, readers to respond, and the channel to function in both ways. Much like TV programming is now discovering with SMS text message voting. And the beauty of the mobile phone channel is that money can be charged for the interaction. People will pay to communicate via the mobile phone, which they are not willing to do on the fixed Internet.
The media industry must remember the classic clich? is that the US railways in the end failed cause they saw themselves as in the railway business, not the transport business, local press has the same problem they see themselves as in print not information distribution.
To recap the key to 3G success is to deliver services that customers really identify as life enhancing, enabling, simplifying. 'Engaging' customers who will then become advocates. Recent studies in Finland have also imperically demonstrated that if network operators identify, target, and market to the opinion leaders within social networks the uptake of services is significantly enhanced creating the all-important critical mass.

C.K. Prahalad and Venkatram Ramaswamy in their article The Co-Creation Principle write,

If Companies spent the 20th century managing efficiencies. They must spend the 21st century managing experiences.

The 3G mobile phone will be a key player in that process. But just remember, not everyone wants to watch Premiership goals.

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