German-based T-Systems International is introducing a new mobile advertising service with the technical support of IT Services Hungary Kft., the company announced in mid- September. The service is designed to send SMS and coupons to consumers who will be interested in those messages – at the right time and place. It is meant to deliver advertising that people want, without being disturbed. The new service can send advertisements and store discount vouchers in SMS messages to the mobile phones of passers-by, based on location data using big data analytics, real time technology and “geo-fencing”. Consumers are more likely to open a marketing-driven SMS (98% likelihood) than a Twitter tweet (29%), an E-Mail (20%) or a Facebook post (12%), marketing experts say. However, T-Systems said, the service will not track consumers and is designed to be 100% spam free. We asked Laszlo Posset, Product Leader at T-Systems International, about the new product and service.
BBJ: How widespread is this technology? How successful has it been thus far?
This is the first deployment of this technology as a highly relevant, real time, secure and location based Mobile Advertising B2B2C solution of the Digital Division at T-Systems International by delivering “Relevancy” as a full E2E Service to the Opted-In Mobile Subscribers which is achieved by applying Data Science to the Big & Fast Data of the Mobile Network Operator using modern Real Time & Digital Marketing Technology.
Until now, location based Mobile Advertising using SMS messaging didn’t exist in Hungary. Before launching this new service we have completed a successful pilot phase together with Magyar Telekom and with 25 multinational companies in Q1/2014. Around 25.000 opt-in subscribers have been addressed in 135 location in Budapest and 180 locations countrywide by sending them more than 100 thousand of offers and 2.3 thousand vouchers over a period of 10 weeks. The average response rate was 2.28% which is 5 times higher than the industry average rate (0.65%).
Deutsche Telekom is planning to implement this service in other European countries too. Croatia, Austria are the next, but also others will follow soon.
BBJ: How is the rollout going in Hungary?
We notice a large interest from vendors and agencies. We also see a huge increase in the number of subscribers – mobile phone holders – who agree to use the service and are thus able to receive benefits from our customers.
BBJ: Are there any interesting uses of the mobile marketing services in Hungary? Can you cite some examples?
The most prominent objectives of our users are customer loyalty, brand awareness and thus an increase in their customer base. Potential uses could be for example e.g. when:
- a restaurant/café is empty and would like to invite guests with attractive discounts exactly at that time,
- a shop has products which will expire soon and would like to invite everyone nearby to sell them with a discounted price,
- there is no space for new arrivals due to the previous one, then the shop can send special offers to them who are just rushing through the mall, or
- you have a brand new product or service and want to let potential customers to know about it, then you can use our location-based mobilemarketing solution.
BBJ: What are some kinds of businesses that typically use mobile marketing advertising service and how do they use it?
Typical customers include branding firms, retailers, advertising agencies and marketing companies. The solution has already been used for marketing campaigns at supermarkets, drugstores, coffee and food chains, bookstores, department stores and manufacturers (of cars etc.) There is a range of services covered by the program. From impulsive buying, to “highjack marketing”, the combination of location relevance and behavioral relevance provide the brands with an optimal reach to their audience.
BBJ: The model sounds very interesting for smaller advertisers, allowing spur-of-the moment messages about special sales. But how easy is it for an advertiser to sign up? Will smaller businesses be easily able to buy small, affordable blocks of advertising?
Geo-fencing makes it very easy even for small advertisers/enterprises to get a hold of potential customers. With location-based campaigns, the response rate can be five times higher than with traditional marketing solutions. Users (mobile phone holders) agree by opting-in to share their location data as well as demographics, interests, purchasing history and other characteristics. Thus, subscribers can be targeted more easily and ads become personalized. Geo-fencing allows you to accurately define the area in which subscribers are approached by the service, hence spam and unnecessary harassments are excluded.
BBJ: What about mobile phone customers? Will it be easy for them to agree to the service? Will you have statistics on the number of people who agree to receive the advertising messages?
Anyone who owns a mobile phone and is interested can sign up on the homepage (https://www.akcionekem.hu/) to opt-in for our service. In order to be able to receive the most suitable ads and discounts, the user is asked for additional information (demographics, interests). Generally their answer is yes, because who does not want to receive relevant beneficial information? In countries like the UK already 25 million subscribers have opted-in. We believe that once the service goes viral, thanks to its social capabilities, a good half of the subscribers will want to participate.
BBJ: Are there any possibilities to enhance the service with new technological advances? Is there anything interesting in the development?
There are a multiple avenues that will continuously enrich the service – from delivery, to content, to precision, to experience.
BBJ: Is there anything else you’d like to add?
Benefits for customers include:
- adding the location as a dimension can increase relevancy,
- the system gives more relevant offerings on their mobile phones in real-time,
- location targeting is actually a strong predictor of consumer intent.
Benefits for brands or advertisers:
- it offers an efficient new sales channel to reach new customers,
- measurements provide a more meaningful response (5-20 times better than the industry average),
- more widespread adoption of mobile LBD can create awareness among the market,
- it increases customer loyalty,
- we aim to turn advertising from a nuisance into a benefit, helping a willing tribe to get promotions how they want them, where they want them, and when they want them.