For Mobile Marketing That Really Works, Just Look to Asia

Korea and Japan are crushing it with innovative gaming and commerce executions, and a more receptive audience

Thomas Hong-tack Kim, executive creative director for Cheil Worldwide in Seoul, agrees, pointing out that stellar public bandwidth makes South Korea a peculiarly exotic playground for mobile commerce. His agency won a Cannes Lions Grand Prix for creating virtual subway stores for grocery giant Tesco’s Homeplus brand in Seoul, targeting mobile phone users who access the Web while commuting via the city’s underground public transportation. It’s a case study for what might be possible for American marketers down the road. Cheil crafted interactive, lifelike store aisles with a range of product images, enabling consumers to order products for home delivery by simply snapping photos with their phones. Homeplus sales jumped by some 130 percent after launch, while the interactive stores remain a fixture of subway stations in Seoul.

Could something like that take off here? “The U.S. does not have the infrastructure or assumptive culture in place,” warns Kim. “What the world generally considers to be ‘innovative’ are services directly connected to this infrastructure.” He adds, “Mobile video streaming, mobile payments and coupons are much more available and prevalent in Korea. It is much easier to build things in Korea, because everything is so geographically and culturally focused. Approximately half the population lives in Seoul. The U.S. is much more complicated. They key takeaway would be to start in urban areas. New York City, Boston and Chicago come to mind.”

When it comes to U.S. marketers catching up to their peers in South Korea and Japan in terms of mobile-commerce innovation, the infrastructure disadvantages would seem daunting, especially considering the U.S. economy and a government that won’t likely put tax dollars toward an upgrade in public data bandwidth anytime soon.

“It’s a big-picture hurdle,” says eMarketer vp, communications Clark Fredricksen. But market changes, specifically in merchandising scenarios, signal a future in which U.S. marketers may have to up their game to compete for smartphone-packing shoppers. “It’s going to have to be a first or high priority if they are going to be successful in a retail space dominated by mobile usage,” Fredricksen says. “That’s the trajectory we are on today.”

Game On
Mobile gaming in Asia represents another important area marketers in the U.S. would do well to study for winning tactics. Mobile games will become a $3 billion industry in the U.S. by 2016, according to eMarketer. The firm doesn’t report such data for Asia, but research firm Mind Commerce projects that mobile gaming will reach $17 billion in Asia by 2017, with the region representing 50 percent of the global market. Bandwidth-happy Japan will account for more of those dollars than any other Asian country, reaching $5 billion in five years, Mind Commerce reports.

“Gaming is heavily ingrained in their culture, and brands have done a great job inserting game-based experiences in a way that resonates with mobile users,” says Lars Albright, the SessionM CEO who helped Apple launch iAd in Japan in 2010. “Overall, their mobile consumers tend to engage in longer sessions, and advertisers are taking advantage of” these sessions. (Read more about Albright in “They Might Be Giants” on page 22.)As Mobilize founder and CEO Eric Bader puts it, “In Japan, they see mobile devices as heavy gaming devices. In the U.S., it’s more productivity and social. Gaming is secondary.”

At the same time, gaming is also an area that reveals pro-U.S. elements. Americans are buying tablets in robust numbers, while Asia lags behind. Because of their larger screens and touch-screen capabilities—vastly superior to cellphones—the ad opportunities via tablets are more advanced. “There are more options in the Western market than in Asia overall,” says Sho Masuda, vp of Gree, a Japanese mobile gaming platform. “For example, in the U.S., you have videos and various incentives—such as giving out gift cards in exchange for apps, etc.—which have allowed mobile app advertising to become a lot more widespread and creative. In Asia, in-game video ads are just recently picking up, whereas in the U.S. they have been popular for awhile now.”

Based in San Francisco, Masuda has been building Gree’s North American business during the last two years. He mentioned popular digital radio apps like Spotify and Pandora as other examples in which the U.S. leads in both mobile innovation and advertising formats. Conversely, Masuda echoes sentiments from other players about Asia’s advantages.

“As a marketer in Asia, you have greater return-on-investment per user, which lets companies do bigger things with their marketing dollars,” he says. “We need to catch up to Asia when it comes to payment systems and ease of payment overall. Carrier billing, for example, is very sophisticated in Asian countries. It’s a handicap for the U.S.”

Not everyone in the digital ad world has such Asian envy, however. Several executives warned against using metaphors like “catching up” to a market or region that is inherently different and hardly uniform. The U.S. mobile ad market may never match Asia, and that may be OK.

“I think we are making a mistake if we’re focusing on things like that,” explains Anna Bager, vp and gm for the Interactive Advertising Bureau’s Mobile Marketing Center of Excellence. “We should focus on what we have here. We are way more advanced when it comes to mobile ads. This is where it happens. This is the center of the world. This is where you’ll see the innovations in ad formats.” 

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