Mobile Marketing & Opt-In (Chapell & Associates) | MMA Global

Mobile Marketing & Opt-In (Chapell & Associates)

March 13, 2006

Mobile Marketing & Opt-In
By Alan Chapell, President, Chapell & Associates

It seems an unfortunate fact of the industry that new technologies sometime lead marketers to go, well, a little overboard (I’m pretty sure everyone remembers back when the X10 camera pop-ups climbed the Nielson charts like some power pop trio).  This type of assault can lead consumers to reject a perfectly legitimate ad medium simply because their preliminary interactions with that medium are negative. So as we expand to new marketing opportunities in the online, offline and now mobile worlds it’s worth remembering that sometimes, first impressions are everything.

More and more, we’re hearing the all too familiar mantra that relevant advertising is a valuable exchange for the consumer. In other words, in exchange for a little information, marketers can provide information and offers that consumers will like and/or are geared to their individual tastes.

In a broad sense, perhaps, Mobile Marketing epitomizes this trade-off. On the one hand, getting advertisements for businesses located near a cell phone user may actually be quite valuable. For example, if someone is using a mobile browser to find a pan-Asian restaurant and receives an ad for one in their vicinity - then the advertisement is likely to provide them with exactly what they were looking for. On the other hand, consumers might not be too happy to know that an advertiser "knows" where they are standing at a given moment. One person’s valuable and targeted ad is another’s creepy intrusion.

Location based advertising is one of the more enticing developments in the advertising business.  New companies are entering the space at a regular clip and there are sure to be exciting advances in the near future.  On the other hand, if executed poorly, serving location-based ads can be particularly unnerving to consumers. General “opt-in” may not be enough.  If, as the University of St. Gallen in Switzerland showed in a 2005 study, eighty percent of cell phone users believe that receiving ‘mobile spam’ is a reason to change their cell phone provider – well, this might only get worse if consumers are worried about their privacy as well.   Consumer sentiments may dictate that they need to be told upfront that their physical location is going to be tracked – and used to serve them advertisements. 

Part of the concern users express about targeted advertisements is their sense of mysticism (or “creepiness”).  In other words, if someone has to ask ‘why do they [the marketer] know this about me?’ there’s going to be some amount of worry, no matter how relevant and valuable the advertisement.  Opting in to advertising solves part of this problem, since consumers understand why they are receiving ads.  If consumers click on a banner ad, or send a text message as part of a promotion they are far less likely to object to the resulting advertising - either on the grounds that it's overwhelming, or too intrusive. Once the consumer has informed an advertiser that s/he wants more information or is interested in a service, there's no mysticism when an ad shows up.

For location based tracking, though, there’s another step that can significantly improve the level of consumer engagement.  Take our cell phone user who is trying to find a pan-Asian restaurant.  If he has signed up to receive relevant ads on his mobile browser and receives an ad for an eatery a block away from where he’s standing, he might be quite happy.  He might also, if he thinks about it, be somewhat worried – why did the advertiser know his location?  When Nokia asked consumers about opting into mobile marketing, 86% percent said there should be an obvious trade-off for accepting mobile ads – and in this case, the trade-off hasn’t been made explicit.   But let’s say that when signing up to receive marketing, he was told that ads “would be based on his geographic location.”  Now, when the ad for the dumpling house shows up, there’s no mysticism.  He knows how and why he got the ad – and happily goes to eat at the restaurant.

It’s exemplary that the incipient marketing industry has focused on opt-in requirements for ad serving.  It’s vital for any sub sector of marketing to avoid the pitfalls we saw a few years ago in online advertising, and the MMA’s code of conduct, which asserts that “Consumers must opt-in to all mobile messaging programs… location-based marketing is prohibited unless the consumer clearly opted-in,” is a great place to start. 

There are strong reasons for any mobile marketer not yet in compliance with such opt-in requirements to get behind them.  According to Forrester Research, consumers can be broadly ambivalent about targeted advertising, but perceiving value and having the choice to opt-in can significantly increase their comfort level.   It's hasn’t been made entirely clear to me that opt-in practices are universally adopted as of yet. After all, if there’s talk about creating a cell phone directory (which has already sparked rumor and controversy) there are those who are going to see these numbers as a place to send ads.  And "opt-in" can be sometimes a little broadly defined. If someone votes for American Idol, does this count as an opt-in for an ad?  

Marketers aren’t going to want to leave this question undefined, though.  In fact, the Ponemon Institute’s Responsible Information Management (RIM) Council is about to release a white paper on the importance of permissions management when it comes to building consumer engagement.  Charles Giordano, Associate Director for Privacy Marketing Strategy for Bell Canada, (who also leads Ponemon’s Permissions Management team) has some advice for mobile marketers.  “Clarity of opt-in is essential towards building trust,” he says.  Giordano also points out that in setting a clear expiration date for a consumer opt-in can build engagement as well. “It’s complicated,” he thinks, “but it comes down to the psychology of the consumer.”

Complicated as it is, if mobile marketing is the epitome of the information-for-value trade, we should probably be applying something close to the epitome of consumer permissions - paying strict attention to opt-in requirements.  When it comes to issues of privacy and reassuring consumers, it’s increasingly important to get it right the first time.

Alan Chapell, CIPP, is president of Chapell & Associates a consulting firm that helps companies understand privacy and incorporate consumer perception into product development. Chapell has a has been instrumental in the development of emerging best practice standards for privacy and interactive marketing and can provide a real world evaluation of where your organization's practices fit within that spectrum. He has been in the interactive space for more than seven years with firms such as Jupiter Research, DoubleClick and Cheetahmail. Mr. Chapell is the New York chapter co-chair of the International Association of Privacy Professionals and publishes a daily blog on issues of consumer privacy.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />