IN-DEPTH: Mobile is a fast evolving channel and therefore one of the major challenges is deciding where to direct resources to achieve maximum RoI, says Per Voegerl, Commercial Director at Sixt

Published: 04 Aug 2011

IN-DEPTH: Mobile is a fast evolving channel and therefore one of the major challenges is deciding where to direct resources to achieve maximum RoI, says Per Voegerl, Commercial Director at Sixt

By Ritesh Gupta

Mobile, social, search, and local are emerging as key areas of consumer transformation and are impacting the travel business as well.

Specifically mobile as an advertising channel has many appealing elements. An attractive aspect of mobile advertising is the potential for high engagement and personalisation.

A recent survey by the Interactive Advertising Bureau (IAB) indicated that mobile advertising is advancing rapidly and many of the issues that slowed progress in early years have been addressed, for example constraints imposed by network and mobile phone limitations have radically improved through developments in, respectively, mobile broadband and smartphones. Overall, mobile undoubtedly offers huge reach for advertising, and this is understood and appreciated by marketers, with immediacy (57 percent), cost effectiveness (54 percent), increased engagement (52 percent) and reach (49 percent) flagged as top priority benefits by respondents.

From budgeting perspective, mobile marketing has not yet reached a level where it can command a very large component of a company’s marketing budget.

According to another study, “Mobile Marketing: Plans, Trends and Measurability” (released by King Fish Media, Maxymiser, HubSpot and Junta42), companies are faced with a growing installed base of mobile devices among their customers and several competing platforms. The biggest upside is to use mobile marketing as a relationship building tool and eventually as a sales generator. While actual monetisation is taking off slowly, the opportunity exists to deliver tools, content and branding opportunities.

Advertisers must start where every campaign starts—with clear goals. Then, the advertiser should consider the audience they are trying to reach. Finally, they should define the overall user experience they want their target consumer to have.

“Mobile is a fast evolving channel and therefore one of the major challenges is deciding where to direct resources to achieve maximum RoI. iOS and Android both have large shares in the operating system markets so it's important to be available on both platforms,” Per Voegerl, Commercial Director at Sixt told EyeforTravel’s Ritesh Gupta.

“Some businesses appear to be using mobile primarily for building brand awareness. However, at Sixt, our main focus is on generating sales so we have invested in pay per click mobile search marketing campaigns. We have also worked closely with our existing partners such as HRS to generate crossover sales,” added Voegerl, who is scheduled to speak at the forthcoming EyeforTravel’s Online Marketing & Social Media Europe 2011, to be held in Amsterdam (October 10-11) this year.

According to Maxymiser’s study, which featured 563 respondents, the vast majority of respondents (82 percent) plan to increase their spending on mobile over the next year, with 30 percent taking the budget from mainstream marketing and advertising. The overall ROI/payback for mobile is slow to develop as evidenced by the fact that 24 percent report that ROI for mobile programs has exceeded or performed as expected and a full one third have not measured it at all. 41 percent say on the future mobile marketing programs will need to show a positive return to continue the program and 34 percent say they will be tracking, but a positive return will not be required at this time.

Approach

In its study, featuring marketers at 300 US companies, the IAB states that the largest share of companies that are still at an experimental stage, 40 percent, are investing less than $50,000 per annum in mobile advertising. And yet another significant portion of the experimental players are investing at the highest end of budget bracket of over $300,000 per annum. This is perhaps surprising and the Bureau assumes the latter group of experimenters includes some of the larger companies in terms of revenue size.

It makes sense for leading travel brands to experiment with various channels and see what works best in reaching their target audience. Often it is pointed out that the simplest approaches are often the most productive. Channel effectiveness will also change over time, as consumers become more comfortable with new technologies, like SMS and QR codes.

“As mobile advertising is new and fast changing it is important to continually analyse your campaigns to ensure you are directing traffic to pages that convert well,” recommended Voegerl.

Content and search

As the number of people using the Mobile Internet increases, the amount of mobile content is growing with it. Specialists have found that original branded content, ads, expert content and videos are the types of content used most often in mobile format. Social media, branded content, email, geo-location/maps and general reference are most often mentioned as applications being executed as part of a mobile initiative. Original branded content, ads, expert content and videos are the types of content used most often in mobile format.

Most commonly, brands are using mobile initiatives to build/grow relationships, which explain why the most popular content types are currently: social media, branded, email capabilities, geo-location/maps and general reference.

Voegerl mentioned that as many of the well known social content platforms such as Facebook, Twitter and YouTube are already very well established on mobile, the company tries to engage with these existing networks rather than generate content on its own space.

Voegerl added, “We do offer some content through our own apps and this is likely to increase as mobile develops.”

Considering that the amount of mobile content is on the rise, there is definitely a need to make mobile content and services easier to find, both to enhance the user experience and ultimately to maximise the revenue opportunities.

Google has highlighted that mobile search is growing at an exponential rate, increasing five-fold worldwide in just the past two years - a rate comparable to the early days of desktop Google Search. As mobile devices have become more powerful and connected to faster networks, smartphone users are doing a surprisingly diverse set of search tasks -- from simple lookups, to tasks that involve multiple complex searches, according to Google. At the same time, Google acknowledges that it’s not always easy to search from a mobile device, especially with the smaller screens and keyboards. The company has worked relentlessly to make mobile search faster, easier, and more intuitive with features like autocomplete, Voice Search, Google Goggles, Google Instant and Instant Previews on mobile.

Earlier this year, in an interview with EyeforTravel, Google shared that the number of searches in the travel category via a mobile device has been on the rise this year; the percentage of queries coming from mobile devices now makes up 19.5% of all hotel queries.

Assessing the situation, Voegerl says paid search in mobile is still a relatively new advertising channel.

“We are still learning a lot about user behaviour, however from our experience it is important to rank highly as mobile users are less likely to view lower positioned results. As mobile screens are smaller it is also important to be concise with advertising text,” said Voegerl.

Location-based services

Mobile devices are interesting from an advertiser’s perspective as you can reach customers whilst they are ‘on the go’. Once a consumer has opted in, the features such as GPS, network supplied IP and cell tower triangulation will be key qualifiers to deliver location based ads.

Some companies are keenly experimenting in this area.

For instance, Harrah’s Entertainment has been avid testers in this space, both in what Google has brought to the market and in other areas, such as the way the company leverages SMS in-market. There's no doubt that smart phones, GPS, and products like Google Maps have presented more options consumers and opportunities for marketers to reach them. “In our bigger markets, we offer a host of experiences for travellers and mobile allows us to present those options to consumers with in the right context; when they're looking for a show, a place to eat, or somewhere to relax on one of our spas,” says Monica Sullivan, VP Advertising, Harrah’s Entertainment.

Voegerl says it is important to ensure your mobile marketing is relevant to the local audience.

“However marketing based on a user’s actual geographic position is not always successful, for example a user that is located in Munich may be looking to reserve a car in London so advertising deal for Munich car hire is not necessarily relevant,” said Voegerl.

Commenting on what one needs to be wary of in order to ensure that location-based push marketing is effective and doesn’t seem too intrusive, Voegerl says it is important the users agree to receive push notifications, if the user has given consent it is important to send informative and relevant marketing messages to ensure maximum conversions and to avoid users withdrawing their consent.

Despite knowing the potential of this medium and being wary of being too tactical or too strategic when it comes to mobile marketing, it is also recommended that one needs to reassess the whole approach as mobile marketing by itself is too narrow a view of things.

As Adnan Saulat, Principal Consultant, Travel and Transportation Group at MindTree, recommends: The focus should be at ‘Customer relationship Management’ level which includes digital marketing, brand connect, mobile commerce and loyalty solutions. The digital marketing bit has to be a combination of brand mobile sites, social network integrations, event based marketing, QR code promotions & tracking, coupons, product information, consumer reviews, locators, m-commerce, payment and whitelabel m-commerce platform.

“My suggestion would be to experiment a little and see what you get as results, use that feedback to channel efforts optimally,” says Saulat.