Making Science

Interview - Mike Baker

David Murphy

CEO, Enpocket


Mike_baker_preo_enpocket_1Although based in the US (with a London office), when Enpocket launched in 2001, it chose to go to market in the UK ahead of the US, because of the advanced state of the infrastructure, and the higher adoption rate of mobile messaging, in the UK.

In the early days, it was heavily involved in broadcasting acquisition campaigns to opted-in lists of mobile users. Heavily involved too, in establishing best practice guidelines through its involvement with the Mobile Marketing Association (MMA).

These days, the company spends more time working in richer media,  including MMS and mobile Internet banner site advertising. It has also developed an extensive practice, and a reputation as a world leader,  in helping operators to use mobile marketing as a direct marketing tool to their own customer base, for up-selling, cross-selling  and customer retention.

The company recently appointed Mike Baker as its CEO, and we caught up with him to ask him for the Enpocket take on where mobile marketing is headed, and how things in the UK compare with the US.




MM: Your website mentions your involvement in things like Mobile CRM and Mobile Communities. To what extent are these more advanced forms of mobile marketing actually happening? More basic activities like text 'n' win and mobile ticketing seem to hog whatever limelight there is.


MB: The term CRM is one you can quibble with. It means a lot of different things to different people. As we see it, there are two possible objectives for CRM customer acquisition and customer retention. Retention is all about up-selling and cross selling and constantly renewing the relationship. This is how we see mobile CRM, and it is absolutely happening. The leading proponents are the operators.


MM: Thats fair enough, but they kind of have a head start dont they? They have this database of people, and by the nature of what they do, they have their mobile numbers and permission to contact them. What about non-operator brands. How much of this are they doing?


MB: Its a fair question. These brands still in a piloting mode, defining what works and what doesnt. It begs the question: How long will it be before they adopt it, and what are the opportunities for customer acquisition?

We try not to get ahead of ourselves and hype things too much. We are big believers in the long-term opportunity, but we believe the market has a certain sequence to it. This is not the Internet There are different rules, and the operators have an ongoing role in this climate. Some operators are bent on becoming media companies, most notably, 3, but Vodafone are also very serious about their efforts to develop a serious direct-to-consumer media services business, and at maturity those revenue streams will be larger than many, if not most, media companies. 

As a company, we are actively, intensely piloting a number of different brand marketing opportunities with mobile. So in the US, we appear to have amore robust mobile Internet browsing culture. It is a very Internet-centric place and we are seeing a lot of interest in mobile Internet browsing, even though there are not so many properties. This means there is an opportunity to do acquisition via the mobile Internet with contextual ads that consumers can click on to get on to marketing programmes, without the need to go through a huge investment to build the database. Displaying relevant contextual ads during the browsing experience represents a powerful new channel for customer acquisition if done in the right way.

Our vision is that a substantial proportion of the mobile medium becomes advertising- or promotion-funded. The growth will come as the operators start to merchandise services differently and as more types of rich material become available, but you cant expect the consumer to pay for everything. It may make sense to start lowering the bar to access these services. You have TV in the States now going down the download route. Well, to launch TV as a pay-per-use medium would have delayed its evolution by about 50 years!


MM: How do the US and the UK compare in mobile marketing terms?


MB: The US is catching up. The infrastructure is behind, adoption rates are lower, but its the US, and everything is for sale. Its all about marketing. Theres a very robust sales and marketing culture, and even with the infrastructure lagging behind  and lower penetration rates in percentage terms, this is still a large market that is saturated by brand marketing, which, on a revenue basis, makes it a very appealing market.



MM: Do clients typically get mobile marketing  yet or are they still on a learning curve?


MB: Its a steep learning curve, and one of the barriers to the emergence of the market is education. Brand marketers are fond of talking about consumer education, but I would shine a light on brand marketer education, around the personal nature of the medium, the need for optins, the relevance of the message. It might sound high-minded,  but as a practical matter, it requires marketers to change their behaviour, and this is not easy.  They acknowledge, intellectually, the point, but struggle with executing it.

Let me tell you how a typical conversation goes with someone in an ad agency. They say: My client wants to do mobile, I want to buy some mobile media. But the answer is not that simple, its not like buying TV or outdoor. Agencies design and produce creative and place it with media buyers. It took a while for them to get used to the Internet, and redefine their business models to take advantage of it, and we are looking at the same thing here, but it is more of a change, because on the Internet, there was an opportunity to buy banners ads from day one, so it did not look that different.

We are seeing some agencies now who, because they can buy a mobile banner ad, are saying: Well buy a 25,000 campaign so we can tell our client we did some mobile. Its a relief to them but its often a case of throwing it against the wall and seeing if it bounces back. It lacks some conviction and commitment.



MM: So where do you see mobile marketing going in 2006?


MB: I think the next 12 months will bring more and larger pilot programmes. The interest level is picking up dramatically now people know about the concept and have some education. But its not ready for explosive growth yet. I would say that is 12 24 months away.

A good indication of the interest levels is the membership of the associations devoted to mobile marketing. The MMA in the States has grown its membership by a factor of 3 5 (without looking up the exact figures) in the last six months.

Were seeing agencies contact us who dont know what want to do, but who believe that this medium has enduring relevance to their business and who can see they need to start to figure it out. It does not mean it will transform their business this year, but they are interested in running two or three pilots.


MM: I guess it cant do any harm when people as influential as Andrew Robertson, chief executive of BBDO, the third-largest ad agency in the world, name the mobile as 'the single most-important medium that people have'.


MB: No it cant. I was surprised to hear him say that. Of course we agree,  and our view is that its not a matter of if, but when. You can quickly convince yourself that this is the case. Look at the mobile. Its a personal accessory that people carry around all day, every day, and its also an electronic communications device, whose reach globally vastly exceeds that of PCs and the Internet. If you stop right there, it almost cant help but become the most relevant ad medium long term, but it begs the question as to when that will occur.

But its not the net. Its harder on a technology level. You have operators who are not really distributors, unlike the Internet. And the medium itself has been self-policing from birth to become 100% optin, which the net was not. This all delays the robust, breathless growth that the net enjoyed.


MM: So what could go wrong to stop this goose from, one day, laying its golden egg?


MB: Well this is why we invest so much time in self-regulatory groups. The most important thing to note is that the operators, because they are licensees of government permissions to broadcast on their towers, are heavily regulated, and care about consumer opinion especially as voiced to politicians. So theres a unique relationship there, that did not exist with ISPs on the net. So the operators are very concerned with consumer perceptions of spam and unwanted messaging. They are concerned also, because, depending on which operator you talk to, and which day of the week it is,  they view the consumer as theirs, and not Disneys or Universals or anyone else's who is providing content through the channel.

If there are problems purchasing a ringtone, most consumers will call the operator rather than the aggregator or service provider, so it costs them money, perhaps $10-15 a call in customer care complaints, so they are sensitive about that because that is one metric where costs skyrocket when you do things to confuse customers.

But Im optimistic. The self-regulation efforts of both the industry and the operators are positive and good for the industry long-term, but they do have a short-term effect on how quickly the industry emerges. To give you an example, we have no equivalent of ICSTIS in the US, but we have an industry trade group that took on a similar task.

When Jamster came to the US and was selling ringtone subscription packages on MTV, there was some confusion among consumers,with respect to what they were buying, because by agreeing to the free ringtone, they were subscribing to recurring monthly ringtone services. The operators were concerned that Washington would clamp down on it, so we got together and came up with rules for double optins when consumers buy things on their phone. The effect of this is to reduce revenues from Premium SMS by 30-50% but it was absolutely the right thing to do for the long-term health and viability of the industry even though it certainly created a big dent in 2005 revenues.

 

Mike Baker was interviewed by Mobile Marketing Editor David Murphy


Enpockets
10 Rules of Effective Mobile Marketing


 Respect
the permission and privacy of the consumer


 Make
sure there is value exchange in the interaction and dont be afraid to charge
for a premium experience


 Keep
the message simple, use plain language


 Provide
an incentive for bigger opt-ins


 Create
opportunities to collect preferences


 Deliver
instant gratification


 Don't
give them a media run-around


 Dont
over message - l
et the consumer self-select frequency


 Develop
a long-term approach to the medium


 Promote
the programme across all your channels


www.enpocket.com


More interviews:


Andrew Bud, Executive Chairman, mBlox. Read


Jonathan Bass, Managing Director, Incentivated. Read

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