Mobile commerce, once a faint buzz among cell phone users, is making serious noise. A full 9.2 million U.S. mobile subscribers have purchased goods or services using their handset, and 50 percent of all cell phone users expect to do so in the future, according to a survey by Nielsen Mobile. Advertisers looking to develop new revenue streams are responding to this trend by allocating dollars once earmarked for traditional media to the mobile space. eMarketer forecasts that annual worldwide mobile marketing and advertising spending will reach $19 billion by 2012, from $4.5 billion in 2008.

One company that is helping businesses maximize their mobile ad spend as part of an integrated marketing communication program is Comverse, a software provider in Wakefield, Mass. Its Mobile Advertising Solution uniquely targets the personal preferences of cell phone users to improve response rates to advertisements. FuelNet caught up with Rueben Braham, associate vice president of marketing and business development at Comverse, to get his thoughts on the burgeoning mobile channel.

FuelNet: Should an owner of a growing business with a limited marketing budget consider the mobile space?

Braham: There is no better advertising medium than the mobile space. In fact, it may well be the most effective and economical venue for those with a limited marketing budget. The small business owner can pinpoint an ad with greater precision and pay for only the ads delivered to the target group, [as opposed to] the “buckshot” method — paying to broadcast an ad to a wide but largely irrelevant group of people.

Adding to the effectiveness of mobile marketing, an ad can be sent at the right time and in the right context by the most appropriate media (text, audio, video). And being interactive, the ad can include a convenient impulse click-to-respond option that boosts the response rate, delivering the greatest return for the advertising dollar.

FuelNet: What are the secrets to an effective mobile advertising campaign?

Braham: You must leverage the strengths of the medium. They include:

• Smart targeting. Define your target group and send the right ad to the right person. Pay only for ads delivered.

• Relevancy and timing. In line with smart targeting, the advertiser should send the right ad at the right time.

• Attractiveness. Choose the right touch point and make the ad attractive and noteworthy with clever text and attention-getting audio and video.

• Add value for the user. Motivate the user by offering relevant information — coupons, discounts, etc.

FuelNet: How can you keep costs down without lessening the impact of a mobile campaign?

Braham: One way to keep costs down is by smart targeting. Carefully decide who you want to receive the ad. This will ensure that you pay only to send messages to your most lucrative targets. Timing is another cost-cutting element. Avoid sending the ad during prime-time hours unless that timing is essential for success. Also, send out messages in installments. If your plan is to send messages to 40,000 people, for example, control costs by sending 10,000 a month for four months instead of sending them all at once. This will help you deal more effectively with responses.

FuelNet: How does Comverse’s mobile advertising solution create stronger one-to-one relationships with customers?

Braham: One way is through our advanced-targeting-engine technology. Learning about the customer enables us to understand what consumers like and want, so we can send the right ad to the right person. Users benefit — instead of being put off by campaigns they are not interested in, they receive targeted advertisements of high interest to them.

The targeting engine compiles data on consumer behavior. The more data collected about a user and the more history the system retains about the user’s exposure to ads and related responses (clicking on an ad or skipping an ad), the better the system can estimate which campaigns the user is most likely to be interested in and respond to positively. This unique capability is leveraged to the advantage of the operator and advertiser while helping create a stronger bond with the customer.

Another way to create stronger one-to-one relationships with customers is to enable a process of opting in to the ad-supported plan. Gaining customer permission to receive advertisements on the mobile phone decreases resistance to advertisements, is perceived as less intrusive, increases user satisfaction and loyalty, increases click-through rates, and accommodates possible legal concerns.

Strong one-to-one relationships are also fostered by offering added value. Users who opt in to ad-supported plans can enjoy free airtime, free SMS, coupons, discounts, and so on. For example, Virgin Mobile USA’s ad-supported plan (Sugar Mama) enables users to earn free air time in their spare time by watching video ads. For every minute of advertising viewed, the user earns one minute of airtime, up to 75 minutes per month.

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