Multimedia Message Service (MMS) adoption has increased significantly and is quickly becoming a focal point for wireless operators. MMS usage will continue to grow, since it is an important tool in fulfilling widespread predictions of mobile marketing uptake.
In 2009, worldwide MMS traffic achieved a year-on-year growth rate of 48 percent, Portio Research reported. In the United States, 34.5 billion MMS messages were sent/received in 2009, compared to 14.9 billion in 2008, according to CTIA-The Wireless Association.
Many factors have contributed to MMS growth to date, such as the introduction of more technologically advanced handsets, improved interoperability, the popularity of social networking sites, application-to-person (A2P) messaging, and unlimited messaging and bundled services plans that include MMS. However, mobile marketing may have the largest impact on MMS growth in the coming years because MMS is an integral, effective tool for delivering compelling advertisements to consumers.
Corporate marketers and advertising agencies understand the value of messages that include a combination of text, images, audio and video. They also understand the importance of targeting a specific audience based on demographics, location, behavioral data and trends. The mobile platform represents a new medium by which potential consumers can be informed and educated, so corporate advertisers and agencies will rely on MMS to deliver messages that engage consumers and motivate them to act.
| MMS Vs. SMS |
While slower to take off than SMS, MMS revenue is now increasing at a rate that rivals the historic ascent of its Short Message Service (SMS) predecessor. The first commercial MMS services were launched worldwide in 2002, and in 2008, Portio Research reported worldwide revenues of $26 billion. In comparison, it took SMS 11 years to pass $30 billion in annual revenues, according to Portio. |
|
According to "The State of the Industry: Mobile Advertising," a report from the Mobile Marketing Association (MMA), brand respondents in the United States forecasted at least a 15 percent increase in their mobile marketing spend in 2010. In Brazil, ad agencies plan to allocate between 10 and 50 percent of their budgets to mobile ad campaigns this year, according to the MMA. Researchers are observing increased consumer time spent with rich mobile campaigns as well. Millennial Media reported that 12 percent of advertisers incorporated rich media elements into their mobile campaigns during Q3 2010, with average user session times increasing to 4 minutes, 46 seconds.
Corporate marketers and advertising agencies aren't the only ones placing value on mobile marketing. MMA and Lightspeed Research recently issued a Mobile Consumer Briefing for the United Kingdom (UK), France and Germany, noting that 45 percent of consumers surveyed noticed mobile advertising, and of these, 29 percent responded to the messages. The briefing also stated that once people respond to a mobile advertisement, more than one third (39 percent) make a purchase.
Successful examples of MMS campaigns include a BMW initiative to market snow tires, targeted toward BMW's German database of customers. A BMW multimedia message included the ability to download an application enabling consumers to see how their cars would look with the snow tires installed. Consumers also had the option to phone or receive a call from the nearest dealer. The campaign garnered a 30 percent sales conversion rate (nearly one in three message recipients purchased a set of tires).
Similarly, Samsung ran an MMS holiday ad, developed by Enpocket, to promote a new game to its Samsung Fun Club members. The ad offered members a chance to download a free demo using a WAP link embedded in the message. Once respondents ran the demo, they could buy the full game from a dedicated WAP site. Samsung achieved a response rate of more than 15 percent and a conversion rate of 2 percent, outpacing other direct marketing channels.
Mobile e-card provider Sharpcards (recently rebranded as Jeego) sold more than 1.5 million mobile personal greetings worldwide in 2008. Mobile Marketer quoted Will Walsh, CEO of Sharpcards, as saying that MMS "enables a richer experience for an increasingly demanding customer base keen to communicate with more emotion and personality." Jeego provides service to Vodafone, T-Mobile, AT&T, Orange, 3, Sony Ericsson, Verizon, O2 and Samsung.
Wireless operator Orange recently launched Orange Shots, an SMS/MMS-based platform enabling advertisers to target and engage mobile users based heavily on their individual preferences and user data derived from internal systems. So far, Orange has found the medium to provide a higher conversion rate than any other media type, delivering response rates between 21 and 39 percent.
To further emphasize the importance of targeted marketing, revenue from local advertising based on a user's location is expected to reach more than $2 billion in 2014, up from $213 million in 2009, according to BIA/Kelsey. Localized marketing, such as coupons and regional store promotions, delivers value to consumers. This type of marketing provides reasons to take immediate action in the form of a purchase or transaction or an opt-in for future advertising and promotions. According to the MMA/Lightspeed study results, mobile coupons—likely to include text, high-resolution images, animation, video and/or audio—are successful purchase motivators. About 34 percent of U.K. consumers, 29 percent of German consumers, and 24 percent of French consumers surveyed made a purchase as the result of a mobile coupon.
With MMS numbers on the rise, and mobile marketing solidifying its spot on the marketing menu, now is the time for operators to focus on differentiating and promoting their MMS services through innovative promotions and competitive pricing plans that include MMS. Overall, U.S. mobile advertising revenues are projected to grow from more than $490 million in 2009 to nearly $3 billion in 2014, representing a compound annual growth rate (CAGR) of 43 percent, according to BIA/Kelsey. Savvy operators can build strong relationships with advertisers and brands and benefit from the market opportunity that lies ahead.
Jim Dwyer III is Vice President, Product Management at Interop Technologies.