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Mobile Marketing Gets Hung Up

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The day after Thanksgiving, J.C. Penney customers were roused with a wake-up call. The service one might find at most high-end hotels was provided free of charge as part of a Black Friday mobile marketing push. Consumers were invited to go to JCP.com and sign up for the call, along with SMS shopping tips and sales alerts.

The effort is a prime example of how the much-hyped marketing channel is helping companies like J.C. Penney, Subway and Coca-Cola  court consumers through their cell phones and PDAs. The only problem: The economy is in freefall, leaving some marketers leery of dumping dollars into an unproven medium.

Mobile has, in many ways, mirrored the evolution of online marketing. Experts touted it as the next big thing well before an infrastructure was put into place to support such grand proclamations.

The advent of smart phones, better cooperation from carriers and the consolidation of mobile vendors all have mobile poised to reach its vast potential—but it may take longer than expected.

While eMarketer projected mobile ad spending to grow to $2.8 billion from $1.7 billion in the coming year, many analysts see 2009 as the year mobile spending is put on hold.

Forrester Research analyst Neil Strother forecasts the segment will be flat or up slightly. "It's still part of the experimental budget," he said. "I'm not wildly bullish [about 2009]."

"I expect that we will see many marketers utilize their dollars for proven digital media and there will be a temporary reduction in spending for mobile," said Laura Marriott, president of the Mobile Marketing Assn.

Still, brands such as Coke "that have so much momentum won't be scared away," said Nic Covey, director of insights for the Telecomm Practice Group at The Nielsen Co., which is Brandweek's parent. "Brands still sitting on the sidelines are there for a variety of reasons, not just expense. Any reluctance they have will be heightened in today's market."

Others are optimistic that spending in the channel will continue to accelerate, pointing to the fact that mobile is measurable and return on investment can be calculated unlike other media. "In the current economic environment, smart marketing teams will likely move away from generic branding campaigns towards trackable, direct response channels, one of which is mobile," said Jim Shilale, vp, business development at mobile-solutions provider 2ergo.

Mobile trumps other channels because it is personal, said Cindy Spodek Dickey, vp, marketing for mobile technology company Zumobi. "There was a survey that said 70 percent of people sleep with them. They use them in front of the TV, computer and even while driving," she said. "Not to mention smart phones users are a highly desirable demographic in terms of disposable income."

Affluent early adopters aside, mobile is particularly useful for targeting young adults—a fact that is not lost on J.C. Penney. "Mobile marketing has been instrumental during back-to-school season, when we are heavily reaching teens," said company rep Quinton Crenshaw. "Going forward, we believe that as more phones become equipped with Internet access, mobile marketing will be an even stronger way to reach consumers."

Given the miniscule spend flowing into the channel, there is no way but up. Strother estimated mobile makes up about 1 percent of marketer's budgets. "There is so little to cut."

According to Forrester, 35 percent of mobile campaigns cost under $10,000 and only 7 percent of mobile campaigns have budgets exceeding $1 million. "Mobile is so small and there will be enough marketers who will test mobile for the first time in 2009 that we will see a lift in total spend," said John Hadl, founder of BrandinHand, which counts Procter & Gamble among its clients.

In fact, marketers continue to come into the category. Zicam this month will launch its first mobile application. The "Zicam Cold & Flu Companion" lets consumers enter their ZIP codes to find out the percentage of sick people in their area. Those in the mobile arena are banking on such new entrants to keep the category healthy.

"In spite of where we are today in the economy, there are more than 3.3 billion devices worldwide, compared to only 1 billion PCs," said Marriott. "It is only a matter of time before mobile is the 'first screen' with its always-on, always-available status."