U-marketing: It`s everywhere!

Ubiquitous commerce (u-commerce) is the new buzzword to describe the phenomenon in which people can buy anything, anywhere, anytime. With it comes u-marketing - the digital marketing wave in which consumers can be measured and targeted anywhere, anytime.

Digital media is playing a growing role in the marketing arena. The overwhelming adoption of mobile communication devices, the reach of the Internet and sophisticated data mining and analysis make it possible for the marketer to send a specific, personal message right to the consumer he wants to reach.

Don`t like the message? Well, the marketer may not manage to sell you anything this time, but can certainly use the opportunity to gather more information about you and tailor a different offering to suit your needs. Sooner or later, you`ll be hooked and reeled in.

At the moment, there are around 10 million active cellphone users and 3 million Internet users throughout SA. As it can be assumed that virtually all the Internet users also have cellphones, it amounts to a total audience of around 10 million people - roughly a quarter of the population - across the spectrum of age, race and income. All of them easy and affordable to track, profile and reach.

Local advertisers are still cautious about dipping their proverbial toe in the digital marketing waters. Most are allocating less than 1% of their advertising spend on online advertising, says Clint Bryce, a consultant at the CraniumJack ad agency and soon-to-be communications impresario at Shift, a communications and marketing company.

Bryce says that according to Nielsen Marketing Research AdEx Online Ad Spend readings for 2002, there was R46 million in actual "ad spend" online in SA last year. "When compared to other media such as television, radio, print and knock-and-drop, the online percentage is a meagre 0.45%. I believe it was almost 1% at one point, but has since dropped. The message is still clear though: a very small percent of spending goes online."

Jacques van Niekerk, CEO of e-marketing services company Acceleration, points out that ad spend on cinema (R75 131 049) and knock-and-drop (R82 806 737) is significantly higher.

"It is safe to say that digital media in SA is still the poor cousin of the marketing mix," he says. "But it is important to note that many of the online channels and tactics used in digital marketing are not measured by either AMPS or Nielsen NetRatings. These include elements like newsletters, opt-in e-mail, search engine marketing, sponsorships, promotions and affiliate marketing."

Digital media in SA is still the poor cousin of the marketing mix.

Jacques van Niekerk, CEO, Acceleration

Mark Stecker, owner of the Firewater Interactive multimedia agency, reports that the type of clients who approach digital marketing agencies are already switched on to the advantages of digital advertising. Their budget for digital advertising is therefore higher than average.

"Depending on strategy and budget, some of our clients spend up to 70% of their budget on new media. Digital media is still `new` and some companies haven`t quite moved forward into it yet," he says.

"Some companies have been burnt in the past, because they used the 'wrong` supplier, advice or strategy for their campaign. But digital media is moving from an add-on to a necessity to stay ahead in the marketplace. I predict that eventually most budgets will even out on about 50/50 on print and digital in the long-term."

Digital media offers a range of often-untapped visual and interactive options to the advertiser. As demonstrated at the recent New Channel 2003 IT-meets-art exhibition in Sandton, the creative uses of digital media extend almost as far as the campaign creators` imaginations. But this is SA, and there are still certain technical limitations - such as the notorious lack of bandwidth.

Stecker points out that the beauty of digital media is its lack of restrictions when compared with other media. "You can make the viewer interact with the product, using colours, video and sound. Production time is lower than for other media in most cases, because few physical materials are needed."

Clients are showing more interest in viral e-mail and SMS `killer apps`.

Clint Bryce, consultant, CraniumJack/Shift

"Conceptual, creative ideas are not hard to sell in online advertising specifically," says Jason Levin, MD of TBWA digital arm Digerati, "but they are sometimes difficult to execute in 468X60 pixels and 12KB file sizes."

Bryce adds that multimedia cannot really "follow through" on TV advertising in SA. "Online isn`t really there yet in terms of appealing to emotions. The technology has come a long way, but there are still bandwidth constraints. Also, the online viewer is not passively absorbing information like a TV viewer is. He or she is actively looking for something. So there has to be a faster call to action and a more 'impactful` message than TV uses."

Levin says creativity is not particularly highly valued by local digital marketing advertisers though. "Especially after the 'dot-bomb`, clients just wanted to do what was safe and necessary. Even now, clients want good-looking Web sites, but they are focused on usability over conceptual value."

Digerati believes conceptually-driven interfaces create more memorable site visits, says Levin. "But we are careful not to do that at the expense of usability. In the areas of multimedia and online advertising, clients are much more comfortable with category-dissimilar, braver, edgy ideas."

He notes that the biggest stumbling block in the way of online advertising is declining response and the client`s own aversion to online advertising.

Bryce says that while marketing spend on digital media is still small, it is becoming more focused. The old, static Internet banner is fast losing its appeal. This is not too surprising, he points out, as Internet banner ads didn`t make much impact on consumers and didn`t generate much revenue for Internet sites either.

"E-mail is still the killer application of the Internet and will be for a long time to come. The entire search engine industry is going through phenomenal growth and rich media is being used more extensively."

The Internet Advertising Bureau and PricewaterhouseCoopers report that banners account for 32%, sponsorship 24%, classifieds 15%, keyword search 9%, e-mail 4% and rich media 3% of Internet advertising revenue.

"Clients are showing more interest in viral e-mail and SMS `killer apps` that can provide both measurable metrics as well as a strong `send-it-to-a-friend` factor. And they can use these apps to obtain a demographic and psychographic database at the same time." Bryce says SMS has already overtaken e-mail in this arena.

He isn`t advocating spam. "Permission-based viral campaigns that talk to the right person at the right time work really well. It is especially effective if the campaign message is engaging and comes not from the brand, but from someone you know."

Bryce was involved in the development of one such campaign, for the now-defunct Tinderbox agency. The campaign used the popularity of the Bourne Identity movie to involve e-mail and SMS recipients in a movie-related game. At the same time, it collected valuable target market information for the brand involved, Heineken.

SMS marketing is huge.

Clint Bryce, consultant, CraniumJack/Shift

James Burton, marketing director of the Rocketseed insert messaging application, agrees that e-mail is set to grow as a marketing tool. "Many marketers are identifying direct sales and improved customer relations as an important objective for their e-mail marketing efforts.

"There is no doubt that despite the dot-bomb, the Internet - and electronic business as a whole - is gaining momentum by the day," says Burton. "This second wave is growing, in the form of sustainable development underpinned by a return to solid business principles, including the need to make a profit and reap measurable and justifiable return on investment.

"If what we are seeing is a much slower than initially expected - but still relatively rapid and inexorable - shift into communicating and doing business over the Web, then it stands to reason that proven electronic marketing techniques will match this growth."

Burton says e-mail-based marketing, primarily opt-in, has been the one channel that has consistently provided measurably powerful results.

"A measure of how well it is working and how much importance is placed on this channel is the fact that e-mail marketing (primarily through newsletters) was the only marketing channel which saw a substantial rise in budget for 2002 in the US," he says. E-business industry analyst eMarketer.com reports that most, if not all the other media and channels, suffered substantial cuts.

Burton points out that as the volume and intrusiveness of e-mail marketing grows, consumer resistance to such messaging will increase. "This will ultimately be countered by more sophisticated and focused e-mail marketing techniques which use intelligence-gathering and profiling to enable the delivery of marketing material that has real value to the viewer, rather than a generic 'shotgun` message," he says.

"The bottom line is that the definition of junk mail is being inexorably redefined 'upwards` every day. It is up to users to unlock the power of message delivery platforms by using their sophisticated features to gather and analyse information, and applying the results to deliver a targeted, value-driven message to the recipient over a period of time. This rule applies to all marketing media and channels, especially direct."

Van Niekerk sees renewed interest in digital marketing driven by traditional blue chip and multinationals. "This renewed growth is taking place in a far more measured and calculated manner than before. Now that media buyers are starting to see early cross-media research and understand how interactive makes offline media more efficient, many are expected to make significant investments in interactive advertising in 2003."

Mobile computing is ultimately where it`s moving toward.

Jacques van Niekerk, CEO, Acceleration

Van Niekerk says more traditional measurement and planning methods, such as reach, frequency, day of week and time of day, are becoming an integral part of the digital media landscape. This now makes it easier for traditional marketers to embrace the Internet.

"In fact," he says, "the latest AdRelevance research from Nielsen//NetRatings reveals that a total of 286 Fortune 500 advertisers launched an online advertising campaign during the last quarter of 2002."

Everyone with an e-mail box knows that unsolicited e-mail is growing alarmingly and is having quite the opposite effect to what is intended. Guaranteed to annoy, spam tends to alienate users with its grim frequency and tendency to contain misspelled messages and large files that cost the dial-up user a great deal of time and money to download and delete. Accepting an invitation to unsubscribe to the stuff simply triggers an avalanche of more spam.

Global guesstimates hold that over half of all e-mail traffic in circulation is spam. The average American gets around 2 200 spam messages a year. And it`s getting worse - mostly because it`s cheap and easy. The return on spam is estimated at around 0.0001%, which is a small percentage, but a worthwhile return if millions of messages are sent.

While digital media offers a wealth of opportunities for advertisers to pinpoint their targets, their efforts will fall flat if the target market doesn`t buy in to them. In a market already reeling from the sheer volume of advertising messages bombarding them, how do marketers generate interest?

Amusing the audience is one option. Made-for-TV ad campaigns that played on emotions or made people laugh have found their way onto the Internet and into e-mail boxes around the world. The Budweiser "Wassup" TV ad and the John West tinned salmon ad whizzed around the world via the Internet, generating positive brand awareness everywhere they went.

Another option is to create an elitist status for a brand by limiting communications to a select group. Bryce points out that e-mail invitations to Lucky Strike parties generate high levels of excitement among recipients. "The invitations have almost a cult status. People feel special because they have cracked the hip, social nod. The invitation is a crowd-pleasing animated ad, backed up by well-managed events. This creates excellent top-of-mind brand awareness for a tobacco brand, which would not be allowed to advertise in traditional ways."

Especially after the 'dot-bomb`, clients just wanted to do what was safe and necessary.

Jason Levin, MD, Digerati

Customer relationship management (CRM) has taken on a life of its own within the marketing mix, and digital media has made CRM possibilities practically unlimited. From the state-of-the-art call centre, to the Mom and Pop entertainment company sending annual e-mail reminders to book a clown for a child`s birthday party, digital media is being harnessed to drive CRM in a big way. Much of the data collection capabilities of digital marketing boost the CRM side of business too.

With SMS officially overtaking e-mail as a marketing tool, the stage is set for even more growth. "It`s huge already," says Bryce.

It`s reported that consumers are opting in to receive targeted SMS advertising. "People will only get what they`re interested in and what is relevant to their lifestyle. So it`s not actually as intrusive as TV or radio.

"Of course, the geo-positioning of mobile devices introduces some very interesting targeted messaging opportunity," he points out. "Say a Heineken drinker who lives in Cape Town is on business in Johannesburg. He receives a targeted promotion while waiting at the airport to pop into the pub and take advantage of the offer before he flies out."

With picture messaging services or multimedia messaging services now being introduced, marketers will have even more opportunities to entice consumers.

Barry Prinsloo, sales director for SMS Cellular Services, says SMS messaging has become the most efficient and cost-effective way to communicate with customers and suppliers. The company`s high-volume SMS software solution, CellSys, is reported to be extensively in use in enterprise environments. Prinsloo says the system can send thousands of text messages an hour from a company`s large area network and saves on staff, phone calls and data capturing.

However, Van Niekerk points out that the mobile or wireless marketing sector is still in its infancy and faces many problems. "Issues around permission-based marketing, privacy, cost structures and interoperability between networks and varying handsets are all very real.

"However, I see huge opportunities for desktop to mobile applications for use in sales and distribution channels and in consent-based promotions. Mobile computing is ultimately where it`s moving toward."

Wayne Levine, GM of the corporate division at mobile messaging company iTouch SA, says iTouch and Grapevine Interactive recently partnered to take advantage of the potential of SMS marketing. "Our partnership offers multi-messaging marketing, to meet all the mobile messaging requirements of medium to large enterprises from a single point.

"There is huge potential for growth in multi-messaging marketing in SA," says Levine. However, he points out that there are certain stumbling blocks in the way of its success: fly by night SMS suppliers who are creating mass confusion in the market and the residual caution from the dot-bomb.

"Companies burnt by the dot-com syndrome are extremely sceptical of new technologies." Levine also points out that unscrupulous marketers could use the technologies as an extremely intrusive means of marketing. "However, this problem is being curtailed by some very strict and well-enforced network policies."

Levine says the "instant gratification" aspect of multi-messaging marketing is one of its strongest selling points. He highlights a Hunters Gold campaign powered by Grapevine, which enables participants to SMS a number and get an instant response.

Is the Internet the Holy Grail of the marketing world? Yes and no, say the experts.

Bryce says the Internet can`t be seen as the ultimate marketing solution. "If we consider the Internet in its own right then it is doomed for failure as a marketing platform. It cannot be considered in isolation."

Van Niekerk believes Internet marketing has more potential than any other marketing channel due to its interactivity, immediacy and measurability; it is a true one-to-one direct response medium. But, realising its full potential is hard work.

"It entails comprehensive planning; a lot of testing and most importantly it requires detailed tracking, continuous performance measurement and campaign optimisation. This involves a lot of data management and information flow, it is about databases and micro-marketing. This in turn is labour-intensive.

"To establish a positive marketing ROI [return on investment], one needs to enable this process, which includes significant investments in technology, and guarantee required volume to allow efficiencies to be realised. This is the very barrier to successful deployment that most clients and agencies face. If this is achieved, the rewards of positive marketing ROI are significant."

DVD is another digital marketing option expected to show growth. Proponents of DVD as a marketing tool argue that unlike a brochure or e-mail, a DVD carries perceived value, so it is seldom thrown away. DVD allows for interactive, animated demonstrations of products and services in a way that most other media cannot. And it`s not that expensive to produce.

DVD offers good marketing potential for companies that sell a product that can`t simply be described - such as holiday destinations, new homes, art and d'ecor, or even lonely hearts looking for a soul mate.

Creative advertising gurus abroad are reported to be harnessing digital media in ways South African advertisers haven`t yet dreamed of. Imagine a digital screen that fills a shop window, loaded with enticing interactive features to amuse passers-by.

There is no doubt that despite the dot-bomb, the Internet - and electronic business as a whole - is gaining momentum by the day.

James Burton, marketing director, Rocketseed

More mundanely, in-store electronic kiosks can add a whole new dimension to advertising and customer service. Levin says kiosks could be used to collect market information. "For example, you could sell nappies by letting mothers have their babies` pictures taken at a shopping mall and entering their details into a digital kiosk for follow up."

These aren`t being rolled out in any significant numbers yet, but local advertising agencies foresee a time when advertisers will have to take the plunge into these forms of new media.

The general impression is that SA has the potential, skills base and creativity to make digital marketing a ubiquitous wave that enriches both marketers and consumers, taking advertising as we know it to undreamt-of new heights. All we need now though, is for corporates to tap in to the potential.