Communities Dominate Brands

Elop, Nokia, Tablets, Location Based Services and Product Line

This blog does not treat everything Stephen Elop does as Nokia CEO as inherently wrong. I have supported enthusiastically some of his early decisions when he came to Nokia. I have been critical when I see mistakes, and I have been open about when I think Elop (and/or Nokia) has made the right choices. I concluded last summer that Elop's tenure was so full of mistakes that he is unfit to run Nokia and must be fired. But even after that, I have noted whenever he has made good choices, such as reinstating some of Nokia's long-standing features and abilities on phones (like second cameras, removable batteries, microSD support, TV out etc) and on Nokia strategy when for example Elop reversed his stupid decision to go to purely numbered phone names. Now we have Ashas and Lumias and PureViews and no doubt more named phones coming up in the future.

If only Elop could start to manage Nokia intelligently, with some sense and responsibility, I could stop the occasional critical blog articles about Elop's bumbling. But once again, at MWC in Barcelona last week, Elop was up to his usual madness, promising moronic strategies for Nokia. I am referring to his interview to Tech Crunch, which you can see at this link - and there are written summaries of his major points if you don't want to watch a video interview of Nokia's CEO talking about Nokia's future.

FOUR NEW STRATEGIC BLUNDERS

So, last year Stephen Elop caused the costliest damage to any market-leading brand in any industry ever with a pair of idiotic communications from Nokia. He issued the Burning Platforms memo, so full of mistakes that he has since walked back a dozen of the major assumptions, statements and major errors in the memo - nonetheless, that memo caused billions of dollars of damage to Nokia. This was akin to the infamous Ratner Effect. And Elop compounded his memo mistake, with the crazy timing of his announcement of Microsoft as partner, when he had no smartphones to sell, and when Nokia was not even going to release smartphones on the then-current version of Microsoft's Windows Phone OS. This was similar to the devastating Osborne Effect. The collapse in Nokia retail sales added to Nokia's billions lost in revenues and profits. Highly profitable Nokia Corporation just before those two announcements went into the red by mid-year and is producing losses still today.

I was among many who called out Nokia immediately on the strategic blunder of those two communication errors. I have since called the combination by Elop of the Osborne Effect with the Ratner Effect as the costliest management blunder of all time, and it now has a name: the Elop Effect. Obviously Elop himself has admitted that the effects to Nokia were far more damaging than he had anticipated (this alone is reason he should be fired) and Nokia's 34% market share for all of 2010 - when Nokia sold more twice the number of smartphones as Apple's iPhone - is now down to 12% by Q4 when Apple is almost twice as big as Nokia. Nokia was growing unit sales, growing revenues, growing average prices and growing profits just four quarters ago, in Q4 of 2010, the first Quarter with Elop fully in charge. Since then Nokia has seen collapsing unit sales, crashing revenues, dropping average prices and Nokia has swapped growing profits for growing losses in its smartphone unit.

How will Elop fix this? He told the Tech Crunch interview that Nokia was expanding its product line in the Lumia series powered by Microsoft Windows Phone. I have been most critical of that strategy in the past, and I explained as recently as February why even with its upcoming flagship smarpthone the Lumia 900, the Nokia Lumia strategy is failing and will not save Nokia. So this was not news. I understand Elop has to 'believe' his strategy no matter how doomed it is, Elop has burned his platforms explicitly with Symbian so he cannot go back anymore. No matter how much Lumia will damage Nokia, Elop is now committed to it. And this blog is not a repeated criticism of Lumia and the doomed Microsoft strategy. I am addressing four new statements of Nokia direction that Elop made now last week in Barcelona.

Stephen Elop said that Nokia was investing in the Nokia Reader and did not reject the idea of a Nokia branded eBook reader like Amazon's Kindle. When asked about proper tablet PCs like the iPad, Elop said "This is something really interesting to us." Then when asked about the next big thing for Nokia after this camera on the 808 PureView, Elop said "A big part of our strategy going forward will be location-based services." And finally, about Nokia's product portfolio and comparing it to the single-device strategy by Apple's iPhone, Elop said "We will be a lot more pared down going into the future. Its not a single device strategy, but there will be paring down."

These are all utterly mad strategies for the market leading handset manufacturer that is the market-leadering mobile phone handset brand on five of the six inhabited continents, and intends to recover its market leader position also on the sixth (North America) where consumer and market needs differ considerably from the rest of the world (being less advanced and needing more simplistic less sophisticated handsets, and where the carriers/operators set very high demands for customization and where carriers/operators often demand that particular features and abilities are stripped from standard phones). But lets examine each of the four stated strategic missions for Nokia and why they are wrong.

eREADER IS CRAZY

Elop did not commit to producing an eReader device like the Kindle. But Elop did not deny that either. Why is the Kindle successful? It is manufactured and sold by the biggest bookseller on the planet, as a super-optimized ebook reader. What is Nokia's Reader? It is (initially Symbian based by the way) eReader software so that smartphones can be used to read ebooks. Is that smart? Yes, that is smart. Is it yet another sign that Symbian was not dead, that this came to Symbian before Windows Phone, obviously. Is it good for Nokia to expand the market for its smartphones, whether on Symbian or Windows Phone or MeeGo, to be used occasionally to read ebooks, yes. But would Nokia be smart to produce an eBook reader? It would be a moronic move. Amazon is able to sell the Kindle because we already go to Amazon to buy our books and our ebooks. The Nokia (ex Ovi) store is not known as a major bookstore. Nokia's mobile phones are sold through custom mobile phone stores, ie carrier/operator shops and specialized handset stores like Carphone Warehouse. These are not offering eBook readers. The customers are different, the services (content) is totally different, there is no synergy between Nokia's existing sales organization, and the actual physical distribution is totally different. Furthermore the market sizes are completely different. Smartphones alone sell more than all types of computers combined (including yes tablet PCs) - even if we toss in Kindle eBooks to the pile, smartphones outsell the lot. And Nokia sells basic featurephones 6 times more than Nokia branded smartphones. What Nokia needs to do, is to market its primary goods efficiently, smartphones and featurephones - and bring the smartphone unit back to profitability, not waste any R&D effort into designing a 'better eReader than the Kindle'.

TABLETS EVEN WORSE

And yes, lets be fair, Elop did not explicitly suggest he is planning an eReader. But when asked about Tablets, he said he was 'really interested' in them. Really? Nokia to try to out-Apple on the iPad? Ex-squeeze me? Now. If you are a PC maker, and you see that the future of portable computing is headed to smartphones and tablets, it makes a lot of sense for a PC maker (like Apple) to launch a tablet PC. Makes perfect sense. In fact, makes more sense to launch a tablet for any notebook/netbook maker, than to launch a smartphone, because a tablet PC is more similar in every way to laptops and netbooks, than smartphones are.

For any handset maker, to launch tablets is utter madness. Witness Motorola and RIM. Tablets are a tiny market niche compared to all portable PCs which are a part of all PCs which are a smaller market than smartphones. Smartphones are bought, used, sold, marketed in similar ways to other smartphones, but tablet PCs are bought, used, sold, marketed in totally different ways to smartphones - in similar ways to PCs. So with tablets, we don't buy them at handset stores (even though a few are typically offered). We tend to buy our tablets at PC stores. The king of the hill in tablets is Apple with about 75% market share with the iPad. The rivals who have tried to compete from the smartphone side like Blackberry, have failed miserably. The only rivals who have had some success have been like Samsung who were PC makers already and had that sales channel already.

Any Nokia branded tablet would fall into the aim of the iPad. Can it be as good, of course not. Nokia has tried for five years now to match the iPhone and while the N9 with MeeGo came close, no Nokia smartphone, not even the Lumia 900 has matched the iPhone. Why would Nokia's tablet be better than the iPad. Of course it would not be. And where are the Nokia stores to sell them? Nokia abandoned its retail flagship stores. Nokia does not have any relationship with the PC sales channel. Why on earth would it invest any R&D to try to sell a new electronic gadget where the market is tiny and utterly dominated by Apple? This is madness.

 

The right strategy, is to take the N9 and N950, running MeeGo, the most desirable most highly praised Nokia smartphones ever, on Nokia's best OS platform ever, that already are in production, and immediately expand their availability to every Nokia market. Remember the German magazine who loved the N9 and MeeGo so much, it instructed its readers to drive to Switzerland or Austria to get their hands on an N9 (rather than buy the disappointing Lumia handsets sold in Germany at the time). Or see how the Guardian reported on how disgusted it was with the Lumia 800, that it was returning the handset. Nokia problems are not that it cannot make a desirable product. Nokia problems are that the CEO pushes an undesirable product on its customers and refuses to give the desirable product. That is why Nokia is making a loss in its smartphone unit. As we calculated here, even with no Nokia marketing support and selling only in far-away bizarro markets, the N9 on MeeGo was outselling all Nokia Lumia smartphones in Q4 - the launch quarter for both platforms - and how much was MeeGo outselling Lumia? By 3 to 1. What idiot CEO talks about launching a costly tablet PC while he has a hit smartphone in his pocket and refuses to sell that?

LOCATION, REALLY?

And then what comes after the 808 PureView superphone? Elop said a big part of Nokia's strategy was going to be location-based services. What? AGAIN he is committing the same error he did time and again last year. Elop has fired all competence inside Nokia who had the legacy knowledge. He is now listening to Microsoft and West Coast based experts who may be good about the PC based legacy internet and know about things like steam engines and the fax and carrier pidgeons, rather than the Finland-based mobile experts who invented much of the mobile internet. The location-based market opportunity is not only an utter failure. It is only - get this - the worst-performing part of the mobile industry ever. The. Worst. Performing. Part. In this industry's history. Nokia knew this. Elop probably fired all the staff who know this. In the past decade, when the mobile industry grew customers by 500% and grew revenues by 250% - most mobile service concepts grew from zero to several billions of dollars in value. Location-based services? Gartner measured that only 2% of the planet's mobile subscribers were using any kind of location-based services ten years later. Abi Research found the total value of location-based services at a measily 560 million dollars globally in 2010. This is THE. WORST. PEFORMING. PART. In mobile. And here Elop wants to focus?

Mark my words, Nokia will fail miserably with this. Nokia's successes will come from other areas, not from location-based services. And Elop will have to eat those words too, like he did with so many from last year. This is sheer madness. Only a complete ignoramus would commit the company on this futile journey, wasting millions in that pursuit. Elop is once again acting like the ostrich. The facts are staring him in the face, he simply hides his head in the sand and refuses to see the truth. He is substituting his own imaginary world, in place of the truth. This is textbook delusion. It would not be so bad, if Nokia was a filthy-rich hugely profitable company, that it could indulge its CEO in some silliness, but Nokia cannot afford this. Nokia has to focus on areas where the industry is strongest (cameras, music, gaming, social networking, advertising, mobile money), not where it is weakest (location-based). Note - Nokia HAD strong initiatives in cameras, music, gaming, social networking, advertising and mobile money. If Elop had bothered to do what he was hired to do - help Nokia execute better - he'd have big successes out of those. But thats too much 'work' for Elop. He would rather throw all of Nokia's efforts away in the areas where it has invested in - and often has established a lead - and rather pursue some silliness. Oh, I remember, the Windows Phone cannot support the supercamera of the 808 PureView. Windows Phone doesn't support NFC that is needed on mobile money, etc etc etc.. So Elop is making decisions that are to Microsoft's best interest, even where it is damaging to Nokia's best interest. Whose CEO was he, again?

PARING DOWN PRODUCT LINE

And the last bit of madness is probably the most costly and permanent damage to Nokia profits. I wrote in January 2011, just before Elop announced his Burning Platforms memo and the Microsoft strategy, what was wrong with Nokia and how to fix it. Part of that blog are things Elop has now, with a lot of reluctance done - such as fixing mistakes in handset design philosphy (annoying existing customers and recognizing the needs of Nokia markets globally, like removable batteries, microSD support, close-up camera focus, etc). In that blog I argued vehemently that Nokia needed to re-establish its lead in camera (something Elop now did with the 808 PureView). And another point I made adamantly was that Nokia cannot pursue Apple towards a limited product offering. Ford and Toyota do not look at the highly desirable (and profitable) Porsche 911 and suddenly decide to go 'paring down' its product portfolio and focus only on a few sportscars. The exact opposite is happening in every leading and highly profitable company in every industry (except Apple with the iPhone, where Apple has clearly been leaving profit on the table, a frightening thought considering Apple is the most valuable company already on the planet). Porsche does not 'pare down' its products. It is still expanding. We have seen the launch of Porsche cars into SUVs and the formerly 2 door sports coupe maker now also makes the 4 door sporty Panamera. Aston Martin, you don't get more exclusive supercars than that. And Aston what have you done for me lately? They have gone from making V-12 supercars to also cheaper (still super-expensive) V-8 powered sportscars and have expanded to a 4-door model. I could go on.

An engineer will be tempted to think that he or she can design a perfect device. A marketer knows there is no such thing and that we humans have differing needs and wants, often even irrational needs and wants. The more you, the manufacturer, can support the variety of customers, the more you can make a profit selling a gadget to a segment of the market where there is no rival. That is exactly what Nokia did with the 808 PureView or what Samsung did with the Galaxy Beam (the smartphone with the pico-projector). Elop contradicts himself later when he says in the interview that Nokia needs to offer "different things for different people in different markets". That is NOT one size fits all. That is not Henry Ford's 'any color as long as its black' (NB he actually never said that).

 

Nokia is uniquely positioned to flood the market with the most broad product portfolio possible, in every form factor and color and feature set and price point. Nokia can use this competitive advantage to drive its competitors into loss-making! Nokia can win this way. But already before Elop, under Kallasvuo, Nokia moved away from this position - the one where Nokia holds a competitive advantage against all rivals. Now its Samsung which offers the broadest portfolio and who grew market share in 2011 and who lost? Who made a profit in handsets and who made a loss? Samsung has taken Nokia's winning strategy and now is gaining in size and growing profits. Elop has taken the losing strategy - so damaging that Nokia factories are now idling and some are being sold.

Look at the Lumia range. It now has 4 handsets. Not one QWERTY amongst the four. Always before when Nokia released flagships, one of the top phones had a QWERTY version - as 30% of smartphone buyers will not even consider a smartphone that doesn't offer a QWERTY option (according to Motorola). When Nokia released the N8, it offered the sister model E7 with QWERTY slider. When Nokia released the N9, it had the sister model N950 with QWERTY. But Elop prefers to anger existing Nokia customers and drive them to rivals. Even 'failing' RIM sold an increasing number of Blackberries in Q4 - powered by QWERTY. Where is the legacy of the E-Series? This is madness by Nokia, to even talk about 'paring down' the handset range.

The needs of teenagers are different from adults. Business/enterprise customers have differing needs from consumers. The needs of handset users in markets where they do not use the English language (or even the English alphabet) are different. The needs of handsets are different in markets where 3G has not launched yet. The needs are different in markets where most users do not have all-you-can-eat data plans. The needs are different in markets where there is no regular supply of electricity. Etc etc etc. Nokia was able to become the world's biggest handset maker - and the world's biggest smartphone maker - by offering the widest range of handsets through the largest delivery channel, being on most networks of any handset brand. That advantage was voluntarily abandoned by Kallasvuo before Elop took over. Now Elop looks at how Nokia is struggling and rather than use winning strategies, he decides to further pare down his portfolio. This is madness again.

IN SUM

I do not want to make this blog a regular series of hating Elop. But when he does something blatantly stupid, I have to call him out on it. And he is doing it again. Elop is actively destroying the company we used to love. We saw what Nokia is capable if Elop steps aside. The magnificent N9 on MeeGo. The exiled N950 also on MeeGo. Any sane CEO whose smartphone division is generating a loss, would immediately launch those two smartphones to every market. And the 808 PureView on that 'obsolete' Burning Platforms Symbian - so full of super-high tech that Windows Phone cannot even support. Yes, Nokia can come back, and could come roaring back, if the CEO stepped aside and just let Nokia be Nokia.

But Elop rather talks of eReaders and Tablet PCs. These are to the advantage of Microsoft but would be suicidal for Nokia. He talks of Location-Based services being now the next focus area for Nokia where for example Google says its number 2 priority is mobile money. Nokia already not only has Nokia Money but differing from Google, Nokia has already launched Nokia Money commercially in several countries starting with the second biggest mobile market of them all, India. What is wrong with Elop? And now continuing this madness about further paring down the Nokia product line. He is incompetent to run Nokia and is not acting in Nokia's best interest. Elop must be fired now.

Some Cases of Mobile Advertising Excellence from Around the World

This blog has had a lot of focus on smartphones and Nokia recently (for many reasons) but mobile is much bigger than the handsets side, and smartphones only formed a third of all new phones sold towards the end of last year. Today I want to talk about mobile services, and focus on the media side - and a very exciting space in it, mobile advertising.

I do mobile marketing and advertising workshops and seminars all around the world. I was just with Sanoma Media and Telegraaf Media in Amsterdam a few months ago, was in Guatemala with Tigo for some mobile advertising workshops there, was with the MMA in Istanbul doing a series of mobile marketing workshops, did a series of keynotes at the Google Think Mobile event series here in Asia, and the keynote to SOCAP the Society of Consumer Affairs Professionals ie the 'Customer Relationship Experts' at their big annual event in Orlando, and so forth. I've been speaking with MMA (Mobile Marketing Association) events from New York City to Singapore to Sao Paulo, and doing private workshops with many companies that specialize in the mobile advertising and marketing space from ad agencies and creative agencies to major brands etc. There was a nice video of me talking about mobile advertising at the Google event in Kuala Lumpur Malaysia. 

But its been a while I've shared with you my fave stories right now. So lets do a blog about where I see excellence in the best thinking of using the 9 Unique Abilities of mobile and going beyond simply lame copies of internet and TV and print advertising. Let me show you some of my fave stories in mAd.

AN ARMY OF FANATICS

I love Jonathan MacDonald's concept of nurturing and building an Army of Fanatics. How do you engage with fans? One great example comes from Sweden. Veronica Maggio is a Swedish pop star. She decided to reward her biggest fan with a peculiar treat - his number would be the target phone number to call, to hear the Ringback tone version of Veronica's newest hit song, 'Lordagen den Femtonde Mars' (Saturday the 15th of March). This is not a ringtone. This is a ringback tone. It means you have to call that phone number to listen to it. She made ringback the launch method of her song. Her fans could not hear the song anywhere else, not on radio, not on MTV video, not online, not any other way. The fan - his name is Firat Delen, an 18 year old boy in Sweden - had his phone ringing nonstop for two weeks as the fans of Veronica kept calling his number, to hear the song. When Veronica finally launched the song for sale, it hit number 1 on the Swedish charts. Cool. And by the way, many Swedes, who called his number, didn't know of ringback tones, so it also helped bring new users for Ringbacks in Sweden. But this is a cool way to do something different in music marketing. Not to mention a great treat to the fan club.

And talking of fans, lets hop to another side of the globe but stay with music, Japan. Seeda the rap artist launched his album as a virtual adventure across Japan. For every track on his album, Seeda selected one location, and narrated a story about why that location was relevant to that song. The fans were encouraged to tour Japan and go listen to Seeda's narration of his most relevant places in Japan, and in each place obviously they could hear one track from the album as well. Cool. His album? Hit number 1 in Japan. Now rap artist Jay-Z in New York did something similar with an adventure virtual treasure hunt to promote Jay-Z's book. For every page there was a treasure hidden somewhere in New York City.

A virtual treasure hunt is clever yes, but lets now take it supercharged, and let fans join on a virtual trip with their favorite brand. Honda motorcycles in Japan introduced K-Tra in 2008, the fan club experience where fans can create an avatar and then have the avatar take rides on real Honda motorcycles based on their real riding in Japan. Any owner of a Honda motorcycle can sign up to be a host to take one virtual hitch-hiker along. The movement is tracked based on the mobile phone of the rider, and when the motorbike stops moving, the hitchhiker is deposited into that spot, until another Honda motorbike rider comes by, and your avatar is once again on the move, having an adventure. You get an alert of course whenever your avatar is picked up, and then you can monitor its travels via a map on your phone. Cool. Actual fans and owners have of course then met up in the real world too, etc. How many? 20,000 Honda fans have taken rides of over 1.8 million kilometers (over 1.1 million miles) this way (according to Infinita 2011).

This merger of the real world and the virtual world is a very hot space for advanced mobile marketing campaigns. One that is spreading, from Japan, but is already here in Hong Kong and has reached Germany too, is the Augmented Reality (AR) virtual butterfly, called iButterfly. The real world doesn't have these butterflies and probably city environments are not very conducive for the life of butterflies, but they've created a huge virtual flock of butterflies that flutter about here in Hong Kong. You can only see them on smartphones that have the requried AR app installed, and then you can go hunt for them. Different butterflies in different parts of the city and country, and every time you capture a virtual butterfly, you get a coupon. In our case here in Hong Kong one of the first users was Pacific Coffee, by coincidence my fave coffee shop in town.

Another way to do the virtual hunt is the virtual explorer. North Face the outdoors brand ran a contest to 'Conquer China'. They had a blank China map visible in the stores and online and on mobile. Anyone could take their mobile phone, go to any location in China and if first to that location, 'claim it' for North Face, just like explorers claimed islands and mountains etc for their kings and lords. A red North Face flag was planted virtually to that location, and you were the person who virtually discovered it first. The map was then starting to populate with little red flags all over. Always the first to any location would be its owner, not like with FourSquare with whoever came there the most to become its mayor. And in a campaign of under three weeks, a total of 650,000 red flags were planted in China. Every flag also of course gave its heroic explorer a coupon for a discount at North Face. Does this kind of marketing work? Try doubling sales! Grew sales in fact by 106%. And it drove a lot of footfall to North Face's stores, helping fans find the stores.

And returning conveniently back to Sweden, yet another variant is the race to steal the virtual car. Mini ran a campaign in Stockholm, where they parked a virtual Mini in Stockholm. Then whoever got near enough to the Mini, would 'capture' it, or 'steal' it. Then the person would start to run away with it. Other fans could see on a map where the stolen Mini was, and whoever got near enough to the person holding the Mini, would then capture it. This race had big coverage in the Swedish media as Mini fanatics all around Stockholm were in this race to chase whoever held the Mini. The person who had the Mini at the end of the game? Won a real Mini car.

CLICK-THROUGH RATES

And then there is the interactivity. The beautiful thing about mobile is that we can accurately measure it, and with it. Like I say in my workshops, Mobile is the Magical Measurement Machine (the 6th unique benefit of mobile in fact). So bear in mind that online, typical ad campaigns will get far under 1% click-through rates. On mobile you can of course copy the same boring banner ad campaign and actually get far better click-through rates like 4% or 5% or 6%. If that is the level your mobile experts deliver for you, fire them now. On mobile we can do far far FAR better than that. What do I mean?

Then lets go to the UK. The myth about mobile ads is that concept of location-based ads that are used to pester us when we go to a shopping mall etc. That concept was proven untenable eleven years ago and I explained why in my early books. But I also asked for the 'when Madonna plays at Wembley Stadium' concept of venue-based ads, that are targeted not by the shopping mall or main street in town, but by what artist or sports activity is happening at the big sports stadiums and concert halls etc. That is a specialized form of location-based advertising which I promised would work. And now we have the evidence. The O2 venues in the UK have been using events-based venue advertising on mobile, obviously targeting the fans of whatever activity was happening, across the big O2 venues like the Millenium Dome in London. How successful? 20% click-through rates. 

RESPONSE RATES

A more powerful and relevant measure than click-through rates, and one that is harder to achieve, is response rates. A click-through may happen accidentially, and also the click-through includes those who were curious but not convinced. They click but do not want to continue with that brand or campaign. A response rate is more involvement by the participant, they have actively decided to participate in the interactive campaign. Obviously response rates online are infinitessimally small. What do we see on mobile?

Then lets go to Turkey. Flo Shoes the local shoe store decided to send promotions and coupons via MMS and SMS. They sent out 900,000 total mobile advertisements. They got 160,000 responses (a 20% response rate!).

What about Egypt? Adidas ran a campaign on MMS and SMS and received a 35% response rate on their mobile ad campaign. Yes! More than one third of all who received the ad, responded to it.

REDEMPTION RATES / CONVERSION RATES

The real purpose of advertising is to drive sales (directly or indirectly). And again, on mobile we can measure the conversion rate. This is the ultimate in advertising, can we actually measure the concrete pin-pointed ad performance for a given viewer of the ad? On mobile, a well designed campaign can, of course. And we have some evidence.

I start with Blockbuster in the UK. They sent out 1 million offers and coupons to their opt-in database. 100,000 of those mobile coupons were redeemed. So the campaign achieved a measurable 10% conversion rate. Imagine how powerful that is! Compared to online where we might see 0.2% click-through rates on some banner ads. And on TV we don't know who saw it and which ad of a given ad campaign actually drove sales. But I'm not impressed with 10% conversion.

So lets go to the Philippines. HSBC bank ran a campaign on mobile to recruit new customers to its credit card. The campaign used SMS. The target customers had opted in on Globe network's subscriber base. How many were converted to new credit card customers? 15%. Thats amazing. But I am not impressed with that either.

Fine, so then lets hop over to Indonesia. McDonalds ran a mobile ad campaign for McCafe with MMS that was used to test out new flavors of iced drinks. The mobile coupons were redeemed at a rate of 16% redemption rate. Yes, one in six who received a coupon showed up at McCafe to redeem it. And that is impressive but we can do better.

Lets go to Nigeria. There Guinness beer ran a mobile ad campaign with instant rewards via SMS. It achieved redemption rates of.. 17%. And you are impressed with that? I'm not. Lets go to Japan.

In Japan McDonalds has already converted 20 million Japanese consumers as opt-in customers to McDonalds mobile advertising! How many is 20 million? Its one out of every six Japanese people alive! Not one sixth of 'adults' its one sixth of truly the whole population. How many of them redeem coupons regularly from McDonalds mobile ads? Half!

But wait, even that is not the ultimate. Alan Moore, yes 'our' Alan Moore told us at the Oxford University course on 7th Mass Media about Girlswalker, the Tokyo Girls fashion magazine and youth experience extravaganza on mobile and the real world. The fashion ads on Girlswalker mobile magazine have a conversion rate - not click-through rate, not response rate, but conversion rate - actual business generated - of 45%. Yes, out of 100 girls who see the ad for the new blouse or shoes or handbag, on average 45% will show up at a store and redeem the offer! Wow.

I WANT MORE ADS

So mobile is indeed the 7th mass medium. And yes, clearly, mobile is not the same as the internet. In fact, mobile is FAR more powerful as an advertising medium than the legacy PC based 6th mass media internet. And when mobile ad campaigns are designed well, they achieve huge click-through rates, response rates and even giant conversion rates. But the ultimate in advertising is if the consumer actually likes it so much, they literally ask for more ads. This was the concept we promised in our book with Alan Moore back in 2005, in Communities Dominate Brands, that a well-designed mobile ad campaign should be able to achieve that. And it can. This totally counter-intuitive concept is 100% alien on other media. We don't want more ads on TV or in the cinema or on radio or in our magazines or on the internet. But well designed advertising on mobile DOES produce that bizarre phenomenon - we start to ask for more. Witness Qustodian, already launched in Spain and the UK, a radical new mobile advertising service (among many other things). We heard on Facebook from a random Qustodian user, an Andrew Manley, writing "I never thought I would be asking this question in my life, but how can I receive more ads."

MAKE IT CROSS-MEDIA

But don't misunderstand me. I love mobile, but mobile is not the only media channel. In some cases yes, a 'mobile only' campaign can be great. But in most cases, mobile needs to be part of a mix of media used. And let me finish with the winner of the best mobile campaign in Turkey last year, by Garanti Bank. Its a cross-media campaign online and mobile. You get a link to the web ad, you have to give your mobile number in the opt-in process to get to view it. But then you see what looks like a TV news broadcast. The news anchor reports to the viewers that they have now reached the point where almost everybody in Turkey has a mobile banking account. But they are curious about why the last people are not signing up to it, and as they have reached now the point where there is only one person left who does not use mobile banking, the news anchor says he will call the person. And on camera, he takes an fixed landline phone and calls, looking into the camera. And then your phone rings! And when you answer, for a moment it seems like the person on the news is talking to you! After a little while you understand its not real, its a recording and they clearly are not listening to what you say. But this was a huge viral hit, where people absolutely loved it and told all friends, you have to see this ad. And yes, it obviously drove Garanti Bank to sign up tons of new customers to its banking in particular, to its mobile banking.

The advertising industry is embracing mobile now. Last year Ford became the first global brand to state categorically, that mobile was so critical, that from now on, every Ford car campaign will include mobile in it. Coca Cola offers us a good rule about how to spend your mobile budget, with their 70:20:10 rule, ie 70% spent on mobile messaging (SMS and MMS), 20% spent on the mobile web, and only 10% spent on all smartphone apps across all smartphone platforms. Or the simple guide from US food giant, Kraft, whose mobile philosophy is 'Leave no phone behind'. To illustrate how important mobile is for one of the biggest advertising companies on the planet, Google's Chairman, Eric Schmidt says: 'Put your best people on mobile.'

If you are in advertising, you are probably doing something in mobile already and are considering how to expand. I am here to tell you, that if you don't achieve these kinds of levels of success, you are not doing it right. You CANNOT try to copy the legacy media. You HAVE to learn that mobile has 9 unique abilities, and using those unique abilities, you can create SUPERIOR advertising on mobile, better than anything on any other media. If your mobile ads deliver response rates in the single digits, you are doing it wrong. Fire your agency, hire some competence to teach your team. Throw the current concepts into the waste basket and start again. Read the big names in our industry, books by Kim Dushinski and Chetan Sharma. Hire the right people to advise you like Jonathan MacDonald and Alan Moore (and me haha). Use agencies that have the competence and win the awards and deliver that kind of performance as I outline. It may be global giants like Ogilvy or specialist agencies like R/GA or D2C or Naked etc. But don't accept mediocre performance simply because it outperforms your internet advertising.

Mobile advertising launched 12 years ago and I was the first person in the world to talk about it at any telecoms conference (in Vienna). I then chaired the world's first mobile advertising conference eleven years ago in London. All of my books have included examples and case studies about mobile advertising and one of my twelve books actually is dedicated to case studies only about mobile advertising (see Tomi Ahonen Pearls Vol 1: Mobile Advertising - only 9.99 Euros for 50 case studies - see sample pages including several of the cases at the link).

For those who need an update of how the mobile advertising market evolved and grew in 2011, including the regional split of mobile advertising revenues, the total ads served, the distribution of mobile ads by type etc - there is a whole chapter on just mobile advertising in the TomiAhonen Almanac 2012 - only 9.99 Euros see more including sample pages here.

Video of My Keynote at Google Think Mobile event in Kuala Lumpur about Mobile Advertising

There are a lot of videos about my various presentations on many topics. But I saw this video about a recent presentation I gave at a Google Think Mobile event in Kuala Lumpur Malaysia, which was particularly well produced, to help make the video work well on a screen, that still captures both my enthusiastic presentation style, and yet has the slides presented clearly without any disturbance.




The link is here: Tomi Keynote to Google Think Mobile Event

I think this is a very good video to show the powers of mobile as it relates to media and in particular advertising and marketing. There is the typical stats-attack in the early part and the typical case studies from around the world, and of course it ends with some mobile magic. It runs about 30 minutes. This could be a good video for you to have a colleague watch, if you need to help convince the person about the potential of mobile. Thank you to Google both for inviting me to do the keynote and for producing such a good video. 

And a short plug here - one of my 12 books is a collection of case studies of excellence in mobile advertising and marketing. Pearls Vol 1: Mobile Advertising has 50 case studies of my fave examples and the ebook is formated for the small screen so if you work in advertising, its a handy volume to have stored on your smartphone to have an 'emergency collection' of proven ideas in mobile, in case your client suddenly demands some 'innovation' etc.. It only costs 9.99 Euros and you can have the pdf file ebook downloaded today. See more here Tomi Ahonen Pearls Vol 1: Mobile Advertising.