Mobile Marketing: A Path To Customer Loyalty

Mobile Marketing: A Path To Customer Loyalty

Name: Sonia Cialicu Major: Business Science Concentration: Marketing Date: April 30th, 2014 Mentor: Professor Mike Berry

H u l t I n t e r n a t i o n a l B u s i n e s s S c h o o l

April 2014

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Table of Contents Introduction .................................................................................................................... 5 Chapter 1: The World Has Become Increasingly Mobile ............................................. 9 Mobile Devices Developments ..................................................................................................................................... 9 Mobile Devices Adoption .............................................................................................................................................. 11 Mobile Device Users Worldwide ................................................................................................................................ 12 Mobile Devices Sales Worldwide ............................................................................................................................... 12 US Users’ Average Time Spent On Mobile Devices ............................................................................................. 12 Mobile Marketing ............................................................................................................................................................. 14 Chapter 2: Mobile Marketing for Customer Loyalty .................................................. 16 What is Customer Loyalty? .......................................................................................................................................... 16 Why is Loyalty Important for Brands? ................................................................................................................... 18 How Can Mobile Marketing Increase Customer Loyalty? .............................................................................. 20 Chapter 3: The Always Connected Generation .......................................................... 23 Why is a Mobile Internet Connection Important for Brands? ...................................................................... 24 How Can Mobile Internet Be Used by Brands to Increase Loyalty? ........................................................... 27 Mobile Game Marketing ............................................................................................................................................... 27 Social Media Marketing ................................................................................................................................................ 29 Web Browsing ................................................................................................................................................................... 30 Chapter 4: Targeting For a More Personalized Experience ...................................... 33 Targeting in a Digital World ........................................................................................................................................ 33 Mobile Retargeting .......................................................................................................................................................... 36 Implementation ................................................................................................................................................................ 37 How Can Mobile Retargeting Be Used to Increase Customer Loyalty? .................................................... 38 Chapter 5: The Multiscreening Experience ................................................................ 40 The Multiscreening Phenomenon ............................................................................................................................. 40 Why is Multiscreening Important for Brands? .................................................................................................... 41 Mobile Multiscreening for Customer Loyalty ...................................................................................................... 44 Conclusion ..................................................................................................................... 47 Bibliography ................................................................................................................. 51

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Introduction “We are in the mist of another fundamental shift in the way in which people access digital information and services.” (Ryan & Jones, 2012)

Mobile sits at the forefront of this major shift through which society is transitioning and is impacting the way consumers communicate with other people, engage with brands, behave online and react to advertising. This shift is making it difficult for marketers to predict their customers’ behaviour and plan accordingly. It is challenging not only because their attitude changes rapidly, but also because their attention is fragmented across the multiple devices used. In this fast-­‐paced environment, customer loyalty has become an even more difficult task to achieve. However, mobile marketing has the potential to change the way in which brands deliver their marketing campaign, and increase customer loyalty. The purpose of this thesis is to analyse the relationship between mobile marketing and loyalty, by investigating the trends in the market that can be used by marketers to increase the feeling of trust, satisfaction and ultimately convert users into loyal customers.

The first chapter discusses the developments in the mobile market, by looking at the evolution of devices and their increased functionality. Moreover, users’ willingness to adopt these devices is defined as one of the main contributors to the market growth.

More than 60% of the world owned a mobile phone in 2013, and more than 23% owned a tablet (eMarketer, 2014). Users spent much more time than ever on mobile devices, making mobile marketing the biggest opportunity that brands have to reach their customers effectively and efficiently.

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The second chapter reviews the concept of loyalty, how it is different from satisfaction and the different ways in which brands can achieve it. Customer satisfaction is generally important for brands because of few reasons. Firstly, loyal customers become brand ambassadors and recommend it to potential customers. Secondly, retaining them usually costs less than acquiring new ones. Thirdly, loyalty is the path to repurchase and lastly, satisfaction is no longer enough. Brands can use mobile marketing campaigns to increase loyalty by constantly communicating with their customers, by creating a personalized experience for each customer and by engaging them with relevant, useful and entertaining content. The following chapters further explain the three methods and the tools necessary to implement them.

The third chapter defines the importance of maintaining a close relationship with customers by communicating with them through their mobile devices. In a constantly connected and always-­‐on generation, it could be assumed that it is easier to reach customers because they are always there listening to brands’ messages. On the contrary though, it has become more difficult to catch their attention as the accessibility of technology, the overwhelming amounts of content and the development of social media distract them. However, when reaching customers at the right time, when they are willing to listen can yield great results among which purchase and ultimately loyalty.

Mobile marketing offers brands the opportunity to reach their customers at the right time and in the right moment, communicating their message in the right content and therefore increasing its relevance which can lead to increased loyalty in the long-­‐term.

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The fourth chapter explains targeting as a tool to create a more personalized experience for each customer. Targeting has always been a significant factor in transmitting the right message to the right people. However, in the digital age, its importance has grown commensurately with the tools made available. Mobile retargeting can further increase customer loyalty due to the personal nature of the devices and their constant usage.

These devices can thus offer very detailed information about its user, which can be used for creating individualized recommendations. If these recommendations are delivered at a convenient time, when customers are most willing to respond these can lead to action, purchase and ultimately an increase in loyalty.

The final chapter describes customers’ need to shuffle between devices while looking to accomplish a task. This phenomenon is defined as multiscreening and has become increasingly popular among users mainly because of the ubiquity of the mobile devices, but also because of the need to stay connected. The first screen is the television and is considered to be the device that triggers multiscreening. Brands can use mobile multiscreening to increase loyalty by synchronizing the content on mobile devices to the one on the first screen. When users are engaged and willing to take action, multiscreening can enhance their experience across all devices and can bring them one step closer to being loyal to the respective brand.

The Mobile Marketing Association supports the idea that “once used to describe any form of marketing that made use of a moving (mobile) medium (things like moving billboards, road shows and other transportable outdoor advertising), today it refers to a completely different form of advertising: reaching out to connect and interact with

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customers through their mobile electronic device of choice” (Ryan & Jones, 2012).

Mobile marketing has thus evolved from being an optional tool that marketers can use to enhance their campaigns to a necessary medium that can increase their customer loyalty base not only due to the pervasiveness of the devices but also because of customers’ willingness to respond on these devices.

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Chapter 1: The World Has Become Increasingly Mobile Mobile devices have slowly, but surely become an extension of people’s lives. Phones, tablets, phablets, laptops, smart watches, PDAs and countless gadgets in between are starting to blur the line between what mobile is and what consumers think it is. These devices are used for many purposes. Consumers use them to communicate; to socialize via social networks; to consume media through videos, newspapers, blogs etc.; to be entertained by games and apps. Because consumers spend so much time on mobile devices, marketers have spotted an opportunity to get closer to their customers. That being said, because customers are constantly on their mobile devices, marketers need to bring their brands to consumers through these mediums. Thus, mobile marketing has emerged as a practice, which becomes more and more relevant today as people are becoming increasingly connected.

Mobile Devices Developments Peter Vesterbacka from Rovio claims that “mobile is about people and people are mobile” (cited by Ryan & Jones, 2012). With the development of cell phones, laptops and personal tablets, the world has become more mobile and people more dependent on their devices. Imagining a day without these gadgets seems like an impossible mission, however, there was a time when the world could do without them. Before the 1980s there were no laptops, no mobile phones and certainly no tablets. The first portable computer was released in 1981 and was called the Osbourne 1. It weighed 24 pounds and it cost $1,759. Since then, the notion of portable computers became more popular first with business people and then with the general public. In 1989, NEC

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UltraLite was released and became the first notebook-­‐style computer, which truly had a portable feature, as it weighted less than 5 pounds.

In the 1990s mobile phones had limited features, were heavy and bulky, while portable computers were extremely expensive. Therefore, the Portable Digital Assistant (PDA) was placed between these two types of devices and was distinguished as “a handheld organizer used to store contact information, manage calendars, communicate by e-­‐mail, and handle documents and spreadsheets, usually in communication with the user’s personal computer” (Encyclopedia Britannica, 2013). These devices gained momentum in the 1990s with companies like Apple and Microsoft launching versions of PDAs, but decreased in popularity due to the later developments of mobile phones.

Even though research and development have greatly impacted the development of portable laptops and tablets, cell phones are the ones driving the mobile sector due to consumers’ willingness to adopt these devices. The first mobile phone was launched to the general public in 1983 by Martin Cooper and was entitled Motorola DynaTAC. He envisioned the cell phone as “something that would represent an individual so you could assign a number not to a place, not to a desk, not to a home, but to a person” (BBC, 2013). The phone worked on the first generation analog cellular network (1G) and was accessible only to business people. Since then, many more phones were developed among which the Nokia 1011, first to use GSM network (2G) in 1992; Motorola StarTAC with the innovative flip design in 1996; Nokia 5110 with the popular game Snake in 1998. Among the first smartphones developed was Motorola MPx200 in 2002, which had Windows OS system with features such as email, instant messages and apps.

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However, the smartphone device really took off with the launch of Apple’s iPhone 2G in 2007. At the time, the device’s touchscreen, user-­‐friendly interface, Internet connectivity and applications made it an instant success.

Ever since, many more smartphones have been developed, and have become more complex and entertaining. They come in different shapes and sizes, designed by a multitude of companies and operated by few systems. Apple’s iPhones are operated by iOS; Samsung, Sony, LG, Motorola and some HTC phones are operated by Android -­‐ an open source system developed by Google that is popular with developers and handset makers; Nokia, Asus and some HTC phones are operated by Windows Mobile operating system; RIM Blackberry has its own operating system, the Blackberry OS. To sum up, there are a multitude of options both for companies manufacturing smartphones (in terms of design and functionality) as well as for customers when buying.

Mobile Devices Adoption Considering the steady growth of mobile in even the poorest parts of the world, it is fair to say that everyone, everywhere will soon be a mobile customer (Wharton, University of Pennsylvania, 2012). Users’ willingness to adopt mobile devices is astounding and is growing year by year. These facts are supported by the results of research studies undertaken by companies such as eMarketer and Gartner. In order to best judge the degree of mobile devices adoption, the number of users, sales and average time spent on mobile devices have been investigated.

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Mobile Device Users Worldwide According to eMarketer mobile phones penetration in 2013 was 61.1% of the global population (including smartphones with 20.2% of global population), while tablets acquired 23.7% of the global population (2014). Even though mobile adoption (both phones and tablets) is predicted to be slowing, new users in developing regions such as Asia-­‐Pacific, the Middle East and Africa will continue driving the growth.

Mobile Devices Sales Worldwide According to studies done by Gartner sales of mobile phones have reached 968 million units while tablets reached 195.4 million units, both in 2013 (2014). Smartphones sales represented 53.6% of overall mobile phone sales in 2013, while first time buyers and low-­‐end smaller screens have enabled the growth of the tablet market (Gartner, 2014).

US Users’ Average Time Spent On Mobile Devices In a research done by Gartner, in 2014 users from the US spent 2 hour and 51 minutes every day on their mobile devices, an increase of 4.1% from 2013 (Gartner, 2014). The study reveals that “the shift from desktop to mobile, whether smartphone of tablet, is happening across a variety of activities, including social networking and digital video viewing. And tablets are key to the trend.”

There is no doubt, thus, that consumers spend a great deal of time using mobile devices, invest in them and cannot live without them. However, the purpose of these devices has changed during the past years. Mobile phones were used for making phone calls, however, nowadays “the fact that mobile phones can make calls is increasingly less

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relevant” (Pasqua & Elkin, 2012). Tablets were used to keep appointments and schedules, while nowadays they are more used for creative and entertaining purposes.

Mobile devices have evolved into entertainment tools, which are used in order to communicate with friends and families, to play games, to take pictures, to socialize, to study, to read, to watch TV etc. Due to the varied purposes that these devices have, they have become widely used and needed and thus the market has grown significantly.

Quirk eMarketing Agency (2013) summarizes some of the advantages that make a smartphone so special to its users: •

It is personal. “While computers still present a personal connection to the Internet, they are not as personal a device as the mobile phone.” (Quirk eMarketing, 2013).

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It is always carried. Laptops and tablets are portable, but are not carried everywhere, as are mobile phones.

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It is always on and connected.

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It has a built-­‐in payments system: the SIM card. Billing is easily handled through the user’s mobile network and through banking and payment app, which can turn the mobile phone into an electronic wallet.

Tablets have their own particularities that customers found useful and are described by Australian telecommunication company WhistleOut (2011) as:

•

Lightweight and portable compared to a portable computer

•

Easy web browsing

•

Suitable for business and education

•

Fun to use

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Mobile Marketing There is no doubt that the society is going through a major change in not only the way users consume technology, but also in the way they perceive it. Authors Becker and Arnold (2010) recognize that “the mobile device is increasingly becoming a cornerstone of our mobilized society” and during the last few years has become “the most personal, targeted and relevant marketing channel available.”

Henceforth, “as mobile devices have become more universal, their appeal as a marketing vehicle has grown commensurately” (Elkin & Pasqua, 2012). In other words, as the current society becomes more mobile and consumers spend more time on their devices, marketers become more interested to draw their attention through these devices. This is how mobile marketing emerged as a practice, from marketers’ need to connect with their audiences through the mediums they use most commonly, now known to be mobile.

The Mobile Marketing Association defines mobile marketing as “a set of practices that enables organizations to communicate and engage with their audience in an interactive and relevant manner through any mobile device or network” (cited by Ryan & Jones, 2012).

Mobile marketing is a vital means of communication for all companies whose users are mobile. And according to a study done by Smart Insights, there are several opportunities that arise from mobile interactions (2014).

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Firstly, mobile devices are always connected. Phones have network access constantly, which means that customers can be reached via calls and messages at all times.

Smartphones and tablets have Internet connections through Wi-­‐Fi or 3G/4G, which make email, social media, apps and even browsing opportunities for brands to interact with their customers.

Secondly, because mobile devices are so personal, they allow marketers to create personalized experiences for each user. By analysing the user’s journey on their mobile devices, personal recommendations can be attributed and the rate of conversion can be increased.

Thirdly, mobile marketing offers marketers the possibility to target very narrowly the market for each of their products. This is an extension of the point above, as only through analysing the user’s journey can marketers devise a personalized strategy for each target segment.

Lastly, mobile marketing is far more interactive than any other type of marketing because it can incorporate both the digital and the real world. Pasqua and Elkin (2012) support that “smartphones, tablets and other mobile devices give us a richer, more meaningful array of contextual information than the desktop ever could” and that is what users respond to well.

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Chapter 2: Mobile Marketing for Customer Loyalty Loyalty is the preference that customers develop for a brand after a positive experience.

It consists of both a feeling of satisfaction and a need to tell other people about the experience. Any company wants to instil loyalty into their customers because it brings great benefits. Mobile marketing is the practice that can be used to retain customers and increase their loyalty through a more effective communication build upon engagement and personalized experiences.

What is Customer Loyalty?

In their book Customer Loyalty: A guide for time travellers, authors Robinson and Etherington (2006) define customer loyalty from the consumers’ point of view as “an emotional and attitude-­‐based preference resulting in the behaviour of spontaneous personal recommendation and/or purchase.”

According to Kotler (1984), from the company’s perspective customer loyalty represents “an underlying objective for strategic marketing planning” (cited by Dick & Basu, 1994) and an important basis for developing a sustainable competitive advantage – an advantage that can be realized through marketing efforts.

Customer loyalty is a preference developed by customers for a specific product, service or even brand that is achieved through a multitude of activities deployed by companies with the objective to achieve sustainable competitive advantage.

Loyalty is the hardest thing to achieve for a brand and the ultimate goal in the

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decision journey. According to McKinsey (2009) a customer goes through various stages in their journey towards loyalty, first by becoming aware, getting familiar, considering the different options, purchasing and finally being loyal. Only if the experience post-­‐sale is satisfactory, will the customer become a fan.

Figure 1: McKinsey Consumer Decision Journey (Court et al, 2009)

However, according to Robinson and Etherington (2006), “customer loyalty must be seen as clearly distinct from customer satisfaction, which is a predominantly rational and less emotional frame of mind. Loyalty is different from repurchase intent because repurchase may be based merely on inertia. The key factor is the element of personal recommendation. In other words, the willingness to stake one’s reputation on the future performance of an organization is really the distinguishing feature of the truly loyal customer.” When customers are satisfied with their experience with a brand, they tend to recommend it to their friends or families, who can be potential customers for the brand. The trust and belief that the brand will perform well determine customers to share recommendations and ultimately instil loyalty.

When customers choose not to be loyal, Robinson and Etherington (2006) argue that is

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one of three possible reasons. Firstly, the belief that there is something better on the market can drive customers away easily. Secondly, customers can choose not to be loyal because the specific brand does not fulfil their needs and wants, thus does not satisfy them. Lastly, when customers feel the brand does not care for them they decide to leave.

Why is Loyalty Important for Brands?

Customer loyalty is indeed the hardest to achieve in the consumer’s decision journey, and it is also the most precious award that brands can wish for because of a number of reasons: achieving it takes great efforts, loyal customers recommend the brand to potential customers, it is the path to repurchase, satisfaction is no longer enough, and loyal customers cost less that new customers.

Robinson and Etherington (2006) stress that “winning customers and keeping them coming back are the most hard-­‐fought elements of modern business.” Loyalty is so precious because brands make great efforts and invest time and money to achieved it, when one bad experience can take it all away.

Loyalty provides the brand with supporters that will recommend the products to their friends and family. An empirical study conducted by researchers Rini Setiowati and Andradea Putri (2012), proved that there are links between customer loyalty and recommendations: “customer loyalty showed a good vale of significance toward customer recommendation.”

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Moreover, loyalty is a crucial influencer of re-­‐purchase. In the Journal of Services Marketing, a study by Andreas Eisingerich and Simon Bell (2007) established the effect of loyalty on repurchasing intentions. The results indicated that customer loyalty positively affected repurchase intentions and was a significant, direct determinant of repurchasing.

In addition, satisfaction is not enough. Robinson and Etehrington (2006) argue that “customers today don’t leave because they are dissatisfied, but more because they are not overwhelmingly satisfied and have other choices.” In the book Building Customer Loyalty, Joana Brandi (2013) also encourages that “today’s customers have high expectations. When those expectations aren’t met, customers don’t think twice about moving their business elsewhere.” Furthermore, “that customer now expect to be highly satisfied is the norm, and any business wishing to secure a stronger bond with their customers must do a great deal more than satisfy. Instead, they must secure an emotional or attitudinal preference or attachment via the customers’ feelings” (Robinson & Etherington, 2006).

Lastly, it is much cheaper for brands to keep existing customers than to acquire new ones. In support of this statement the Cross-­‐Channel Marketing Report 2013 conducted

by Econsultancy shows that 70% of participants agree that “it is cheaper to retain than acquire a customer”. Moreover, the Chartered Institute of Marketing (2014) published industry leaders’ opinions on customer loyalty and all of them agreed that a new customer could cost businesses at least 3 times more than a loyal customer.

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How Can Mobile Marketing Increase Customer Loyalty?

Robinson and Etehrington (2006) argue that “when customers feel they are dealing with the right company or organization for their needs, they don’t want to change. In fact, they want to be loyal. It’s because customers tell us that staying with a supplier that meets their needs and cares about them makes their lives easier.” Mobile devices are also means that have made customers’ lives easier through their convenience. Brands have the ability to interact with them whenever they are willing to engage, and is a way to satisfy their need for entertainment, news, socializing and so on. Therefore, by engaging customers on their mobile devices, brands have the possibility to instil loyalty.

Mobile devices have indeed facilitated many activities for customers and opportunities for brands, but they have also triggered a behavioural change, which affects customers’ attitude towards brands, and thus their willingness to be loyal. Mobile has made customers more interested in consuming media, yet resistant to advertising and less acceptant of what brands have to say. Therefore, it becomes a challenge for brands to reinforce their message, communicate with their customers and keep them coming back. However, customer relationship and communication through mobile can be much more effective because mobile devices are very personal, and when personalized, the information can have a much greater impact.

In an article for Forbes (2012), Matt Howland supports the idea above by arguing that loyalty communication is three times more efficient than traditional communications methods. He continues by saying that when applying the same level of engagement to mobile marketing campaigns, the combination between mobile and loyalty can attract

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more customers, which can allow brands to target them more effectively through the information obtained. The key idea in Howland’s argument is that mobile makes it easier for brands to communicate with their customers, attract them and convert them into loyal fans. Furthermore, loyalty can bring further communication opportunities that solidify the feeling of belonging and trust. Howland (2012) concludes: “ultimately, mobile gives us the opportunity to rethink engagement, redefine the experience, and rediscover the relationship with customers. However, when entering the mobile game, it is key to remember that loyalty marketing is centred around building trust.”

Mobile marketing can thus become a valuable tool for brands because it offers a more efficient way to communicate with customers, engage with them, and offer them a more personalized experience. By integrating these in their mobile marketing campaigns, brands can instil trust and belonging to their customers, which can grow into feelings of satisfaction and loyalty.

In order to effectively communicate with customers, brands need to establish a connection with them, which on mobile devices happens when these are connected to the Internet. Customers’ willingness and need to be constantly connected has transformed the current generation into ‘an always-­‐on generation’, and has also altered the way in which people interact.

The current generation is not only always connected, but also multi-­‐tasking. The audience uses multiple screens at the same time for different reasons, phenomenon defined in recent years as multiscreening. Recognizing the synergy between mobile

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devices, such as smartphones and tablets, and traditional devices, like television, will help brands better market their products in the most engaging way, at the right time, when customers are willing to listen.

Mobile also allows more personalized experiences, which are possible through retargeting. By keeping track of the customers’ journey on their devices, brands can better analyse and predict their behaviour in order to make better recommendations for the future. Mobile makes retargeting in general much more effective due to the nature of smartphones and tablets. Because these are personal to each user the information is distinct for each one, making the experience extremely individualized.

However, mobile retargeting is the ultimate tool for creating a personalized experience because it can gather information from all devices, smartphones, tablets and laptops, and create unique recommendations for each customer.

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Chapter 3: The Always Connected Generation Many owners of smartphones and tablets will agree that their devices would not be worth as much if it weren’t for their ability to connect to the Internet. The possibility to be online via Wi-­‐Fi or 3G/4G is what makes mobile devices so precious. Without the connection, there would not be a possibility to search, communicate, share pictures, videos or text, even play certain games that need Internet connection.

Internet connection is widely and constantly used by people nowadays, and is as much part of their life as coffee is. Therefore, it comes very difficult to believe that only 25 years ago, there was no Internet at all. The World Wide Web is the mind child of British scientist Tim Berners-­‐Lee, who thought about connecting multiple computers while at Switzerland’s CERN nuclear research laboratory in the 1990s. According to an article by Cade Metz in Wired Magazine (2012) “the world can’t agree on when the Internet was created. But the web originated with one man. In March 1989, Tim Berners-­‐Lee submitted a proposal to his boss at CERN for a new kind of ‘information management’ system.” From there and with the help of other CERN researchers, the Hypertext Transfer Protocol – HTTP, the basis for the WWW was created. The most important decision that Tim Berners-­‐Lee took was to make his creation open, so “that anyone could use the technology at no charge. This allowed the web to spread, but it also allowed it to evolve in ways few could have foreseen” (Metz, 2012).

According to the Internet Society (2012), “the Internet is at once a world-­‐wide broadcasting capability, a mechanism for information dissemination, and a medium for collaboration and interaction between individuals and their computers without regard

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for geographic location.” Paired with devices that are constantly in use and very personal, Internet becomes the source of competitive advantage for many businesses that want to successfully market their products. Ryan and Jones (2012) argue that the immediate access to information and services anywhere, anytime and by anyone as well as the variety of uses that mobile devices have, are the key differentiators that influence users. Their inextricable impact can “alter user perception, expectation and ultimately the potential utility of the marketing message.”

Why is a Mobile Internet Connection Important for Brands?

According to an infographic from Microsoft Tag (2011), the mobile Internet is growing fast and by 2014 it is predicted to take over desktop Internet usage. The general availability of the Internet connection allows users to be even more engaged with the content delivered on their mobile devices, as these are constantly in use. Therefore, with almost 1.5 billion mobile Internet users worldwide (a growth of 3 million from 2012), it is safe to say that mobile Internet brings marketing opportunities that brands have never had before (Digital Buzz Blog, 2013; TechCrunch, 2013).

As a result, mobile Internet becomes so important for brands because of three main reasons: the ubiquity of connected mobile devices, the personal relationship that users have with their devices which marketers have access to, and the possibility to adjust mobile campaigns by analysing engagement.

According to Pasqua and Elkin (2012) the key factor that influences the increasing time that people spend on their mobile devices is the ability to access the Internet. It is not

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only that the Internet makes mobile devices so personal, so precious and so indispensable, but it is also the means through which marketers can enter this space with a message which has a much more effective impact. Due to this personal nature of the device, Ryan and Jones explain that marketers need to be careful not to exceed the privacy limitations: “when you reach out to a person’s mobile, you essentially reach into their personal space. There’s something immediate and intimate about it. That’s a powerful combination for the marketer, but it’s one that comes with a lot of responsibility” (2012). And because it comes with much responsibility, brands need to understand their customers and their online journey. Only then, will marketers be able to transmit a message that will reach their audience. For example, major social media apps such as Facebook, Twitter or Pinterest allow users to decide when and if they want to receive push notifications, in order to protect users’ privacy.

An infographic on mobile usage and activities delivered by Super Monitoring (2013) shows that “50% of the average global mobile web users now use mobile as either their primary or exclusive means of going online.” Moreover, their activities while online are split as seen in the Figure 2: Users’ Mobile Activities and Usage below. With 80% of time on mobile is spent in apps, the activities more predominant are gaming, web browsing and social interaction.

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Figure 2: Users’ Mobile Activities and Usage (SuperMonitoring, 2013)

Engaging with the customer has become much more accessible for brands because the customers are always connected. Pasqua and Elkin (2012) argue that “it is this always-­‐ on, always-­‐with-­‐you aspect of mobile that makes it ideal for building a stronger, more mutually beneficial relationship with customers”. Now it is just a matter of the right time and the right medium – be it device or activity (browser, games, social media).

Pasqua and Elkin (2012) continue explaining that even though all things considered point to mobile as a successful tool in marketing campaigns, “it is about more than the numbers: it’s about getting and staying connected, wherever, whenever, that is where the transformative potential of mobile technology lies – in bringing information to people who need it.”

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Lastly, mobile campaigns can be tracked, analysed and optimised according to real-­‐time user engagement. Its real-­‐time accessibility brings more accurate and current statistics, which offer further possibilities of adjustments, and potentially improve the performance of the mobile marketing campaigns. These adjustments include time management (what is the best time to reach your audience), choosing device (tablets are more used in the weekends while phones are mostly used during the week) or optimizing advertising (both in-­‐app, as well as in social media and browsers).

How Can Mobile Internet Be Used by Brands to Increase Loyalty?

Mobile Internet is one of the means through which brands can deliver marketing campaigns in order to increase customer loyalty. With so many means of communication it has become difficult to establish a relationship with consumers.

Therefore, a unified campaign across different channels is necessary in order to reach different customers on their preferred device as well as maintain consistency.

Mobile Game Marketing As shown in Figure 2: Users’ Mobile Activities and Usage, mobile gaming is the top activity that users engage in on their mobile devices. Research director at Gartner, Brian Balau (2013), claims in their study Worldwide Video Game Market that the mobile gaming category has the greatest potential for growth because of the entertainment value that it gives to users. He goes on to say that contributors to this growth are the increasing sales of mobile devices worldwide and users’ desire to play these games. The same study suggests that “mobile games are the fastest-­‐growing segment of the market,

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with revenue set to nearly double between 2013 and 2015 from $13.2 billion to $22 billion” (Gartner, 2013).

Due to the development of the mobile game industry, as well as users’ increased interest, it is only natural that marketers turned their attention to this rapidly expanding market. Therefore, mobile game marketing appeared, which is a practice through which marketing campaigns are delivered by advertising in a mobile game or by creating a specific mobile game app. By conducting these types of mobile marketing activities, brands can communicate different messages to very targeted audiences (known through the demographics of the specific mobile game) at times when users are responsive. For instance, Figure 3: Advertising in Popular Game 2048 features an advertising banner in mobile game, 2048, which appears during the users’ playing time.

Figure 3: Advertising in Popular Game 2048

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Social Media Marketing Social networking is the second most popular activity that users engage in while on mobile devices. As discussed by Pasqua and Elkin (2012), “when it comes to communication on mobile devices, social networks are fast emerging as a vital platform, not only for the peer-­‐to-­‐peer communication but for communication between consumer and brands as well”. Apps like Facebook, Twitter, Linkedin, Pinterest, Instagram and YouTube are used by brands in order to communicate with their customers, advertise, promote, offer prizes and even customer support. Table 1: Social Media Customer Base and Usage below offers the most recent statistics about the social media customer base. Facebook has the highest number of users and an average time spent every month of 15 hours and 33 minutes per user. YouTube is the second most populous social site online, with its engaging video content. Instagram and Pinterest are also very popular due to their entertaining nature, while Linkedin is the tool professionals use to represent them online.

Table 1: Social Media Customer Base and Usage (Envision Media 2013; eMarketer, 2014; Smith, 2014)

Platform

Users

Mobile

Average time one person

Users

spends per month

Facebook

1.31 billion

680 million 15 hours 33 minutes

Twitter

241 million

184 million

2 hours 50 minutes

LinkedIn

277 million

113 million

17 minutes

Pinterest

70 million

52.2 million 1 hour 17 minutes

Instagram

200 million

200 million

4 hours 23 minutes

YouTube

1 billion

400 million

5 hours

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Social media generally attracts companies because their customers are present as well.

For instance, during the blackout at the 2013 Super Bowl, Oreo was the quickest to see the opportunity. When the audience had nothing else to do on a dark stadium than check social media, Oreo tweeted the image in Figure 4: Oreo Super Bowl Tweet with the text: “Power out? No problem.” (Twitter, 2014). The tweet gathered great attention, and went viral on the Internet, making Oreo the star of the Super Bowl.

Figure 4: Oreo Super Bowl Tweet

Web Browsing Surfing the web is also one of the popular pastimes of mobile users. According to Forrester Research (2013), 89% of consumers use a search engine on their mobile devices. Net Market Share (2014) shows the share of search engine in the Figure 5: Mobile Search Engine Market Share. Google is in the lead (90.95%), followed by Yahoo (5.32%) and Bing (2.48%).

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Figure 5: Mobile Search Engine Market Share (NetMarketShare, 2014)

Web browsing activity is one of the reasons why it is crucial for brands to have responsive websites – sites that are optimized for the devices available to users today.

Customers will look for brands’ websites on their mobile devices and if these are inconvenient and non-­‐responsive on their devices, they will eventually give up, not on the device, but on the business (Indvik, 2012). Louis Gump, CEO of LSN Mobile argues that “companies should devise an approach to mobile that optimizes the mobile experience first, and then tie that mobile experience back to other platforms” (Khazzoom, 2014). Also, Lyndon Cerejo (2012) points out that companies should take into account the features that users expect on their mobile devices such as: small screens, device features, constraints in usage and connectivity, and the constantly changing mobile context.

For example, it can be observed in Image 6: Importance of Mobile Website Optimization that Skyscanner has a mobile optimized, while Opodo uses the desktop version. Even though the information is readable on both websites, it is clearly evident that the non-­‐optimized website is more difficult to follow and understand, which means that customers will not spend time trying, but will leave.

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Image 6: Importance of Mobile W ebsite O ptimization

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Chapter 4: Targeting For a More Personalized Experience According to a study published in the Journal of Personality and Social Psychology in 2012, millennials are more generation me than generation we, with “most of the study’s data pointing toward more individualism and less cohesion” (cited by Chau, 2012). It is thus obvious, that the current society has become more concentrated on the individual, with more and more people preoccupied about their personal experiences above anything else.

Individualism can thus be the reason why the mobile market has increased at this pace: because it has provided customers with devices that are so personal and which reflect their digital self. Therefore, a need for customization and personalization is probably more acute now than it has ever been before.

Targeting in a Digital World Ansari and Mela (2001) argue in their article for the Journal of Marketing Research that targeting and customization had always been an important aspect in planning a marketing campaign. By customizing the products and services as well as the interaction with customers, brands can attract their attention and increase their loyalty: “the customer loyalty that results from such personalization and targeting can translate into increased cash-­‐inflows and enhanced profitability.”

In the digital age, marketers have developed several ways to target the marketing message in order to manage customer relationships, either onsite or through external

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customization. Either of the methods is useful and can successfully retrieve site loyalty (Ansari & Mela, 2001).

Onsite customization is based on internal browsing data, which allows businesses to customize their website so that returning customers have personalized recommendations based on their previous browsing behaviour. According to Linden et al. and Dias et al., the recommendation system can increase sales through its specificity: the products highlighted to the customers are often the same ones that he/she browsed before leaving the site (cited by Lambrecht & Tucker, 2013). For instance, companies such as Amazon and EBay have recommendations systems as can be seen in Image 7: Ebay and Amazon Recommendation System.

Image 7: Ebay and Amazon Recommendation System

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On the other hand, external browsing data allows businesses to target their advertisement better to consumers who fit a particular profile (Lambrecht & Tucker, 2013). There are three main methods of external targeting: behavioural targeting, retargeting and dynamic retargeting. Depending on the stage of a marketing campaign, these methods can work separately and as a process.

Firstly, behavioural targeting is a strategy of engaging the right consumers with the right marketing material at the right time. Howard Beales (2010) supports this statement in a study conducted by the Network Advertising Initiative where he argues that the information gathered from users’ online browsing behaviour could be used to target advertisements to particular groups of customers that will be more likely to find the content interesting.

Secondly, generic retargeting is a marketing strategy that businesses use in order to reinforce specific messages to users who have already visited their website, but haven’t converted. Lambrecht and Tucker (2013) explain generic retargeting as a 4-­‐stage process: 1. The customer is exposed to the product by visiting the company website. The online journey is recorded and tracked by cookies.

2. The customer browses the Internet and lands on a website which has ads provided by an advertising network that offers retargeted advertising. Through the cookies, the ad network identifies the customer’s journey and can thus tailors their experience.

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3. Based on previous browsing, the ad content is delivered to contain information about the company website visited initially, rather than other websites.

4. If the customer makes a purchase on the initial website, then they will not be retargeted, unless they visit the website again.

Lastly, dynamic retargeting is a newer version of retargeting and works in the same way, the difference being the content of the ad. While with generic retargeting the ad network offers general company ads, with dynamic retargeting “the ad network additionally designs the ad to display the exact product the consumer had looked at before”. Dynamic retargeting “allows firms to target consumers who have previously been to the firm’s website, on their sites across the Internet, with content that is specific to the product the consumer previously viewed at the firm’s website” (Lambrecht & Tucker, 2013).

Mobile Retargeting Through mobile retargeting, marketers have the possibility to deliver more specific content to their customers, at the right place for them. With 1.5 billion mobile web users worldwide and a total of 2.4 billion Internet users, the possibility to reach customers are more diverse, more complex, but also very promising. In the Journal of Electronic Commerce Research, Bauer et al (2005), support the previous idea by arguing that it is not only the fact that global penetration of mobile devices is high that allows brands to reach their customers more easily, but also the fact that a mobile phone for instance is only used by one person: its owner. Therefore, these allow more targeted and ultimately effective marketing practices, which are not possible with other type of media.

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Mobile retargeting is the most up-­‐to-­‐date practice in mobile marketing, which has gained great momentum due to the increased usage of mobile Internet worldwide, as well as marketers’ need to deliver the right messages to users across devices. Kerri Smith (2014), Mobility Director at iProspect defines mobile retargeting as “a form of mobile targeted advertising delivered to consumers based on previous mobile Internet or app actions that did not result in a conversion.”

Implementation According to John McDermott on DigiDay (2013), Google, Facebook and Twitter are shaping up to be the biggest players in the mobile retargeting market. Twitter for instance, is currently working with partners in order to allow advertisers to target promoted tweets based on users’ Web activity outside of Twitter. McDermott explains that a user looking for flights to Fiji for example could be advertised hotels or services in Fiji through promoted tweets in the mobile app.

Moreover, Google is working to improve cookies in order to enable them to track users’ activity on mobile devices. According to Tim Peterson from Adage (2014), Google can offer mobile advertisers a hashed tag, which is a tracking identifier every users leaves after visiting the advertisers’ website. These hashed tags tie with the desktop cookies and track the browsing history from both desktop and mobile devices, thus offering a more comprehensive view of the customers’ online behaviour.

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On the 20th of February 2014, retargeting company AdRoll announced the launch of a new mobile retargeting offering that enables marketers to retarget customers across devices. AdRoll president, Adam (cited by Marvin, 2014), explains that by using their technology, advertisers are able to retarget users browsing on desktop for their products, by showing them ads on Facebook and Twitter mobile apps as well as on other sites, which are optimized for mobile devices.

How Can Mobile Retargeting Be Used to Increase Customer Loyalty?

Mobile retargeting can offer marketers more information about consumers’ behaviour across devices, which is invaluable for brands that want to effectively deliver their marketing campaign on different devices. The users’ attention is more easily obtained when the message is specially tailored for them, is useful, it comes at the right time and is consistent across channels. The scenario below is a representation of a customer’s purchase journey in the digital environment.

Scenario Customer X browses the Internet on the desktop to find information about Moscato wine and its characteristics. When commuting, the same customer searches on maps for different shops where he/she can buy Moscato wine in a specific area. Lastly, during the weekend, the same customer uses his/her tablet to browse social media and finds an ad about Moscato wine, which is on offer at a Sainsbury’s very close to his/her house.

Mobile retargeting has a special advantage compared to desktop retargeting because it is an incentive that users get when they are not necessarily looking to buy, but when they are looking for entertainment. Lembrecht and Tucker (2013) claim that

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“consumers who browse products online often leave the website without buying and do not return.” To reach out to these consumers, retargeted ads on mobile can be the step that makes the difference in the purchasing journey. Lembrecht and Tucker also mention retargeting specialist, Criteo (2010), which claim that personalized retargeted ads are much more effective than both standard banner ads and generic retargeted ads.

Criteo says that the best way to deliver these personalized ads is on a personal device that is constantly connected to the Internet and is always with their owners. A message especially tailored and personalized according to interest received on the most used device is what customers really appreciate because it means that they are special and brands care enough for them. This is what builds true loyalty and it can be effectively obtained through mobile retargeting.

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Chapter 5: The Multiscreening Experience A study conducted by Microsoft (2013) reveals that consumers are shifting between devices as well as combing them in new ways in order to multi-­‐task, enrich experiences, connect with others and accomplishing tasks. Moreover, the prevalence of mobile devices in consumers’ lives has created a desire to conduct the activities above in the most convenient way that can maximize the experience. These are the reasons why multiscreening has become a frequent activity for users and an increasingly important phenomenon for marketers. By employing personalized marketing activities across devices, brands can offer a richer experience to users, who will feel motivated to participate. When users get engaged, it is easier and more effective for brands to communicate their message and convert them into loyal customers.

The Multiscreening Phenomenon Pasqua and Elkin (2012) argue that a brand’s website needs to have several characteristics across devices in order to offer customers an enjoyable experience. The site has to be findable on search engines, and needs to provide useful, desirable, engaging and consistent content across on desktop, smartphones and tablet browsers.

The reason why there is a need for consistency across devices is because customers constantly shuffle between them. According to a Marketing in a Multiscreen World, a study conducted by Milward Brown (2014), “multiscreen users spend five hours daily consuming seven hours of screen media” moving from one device to another. A study done by Google confirms that users change between devices due to a change in context.

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Depending on where consumers are, what they want to accomplish and the time needed, they decide which device is most suitable for the job.

Why is Multiscreening Important for Brands?

Joline McGoldrick (2014), Research Director at Milward Brown explains in an article for Forbes that their study revealed the different reasons why users multiscreen. The starting point that triggers multiscreening is television. Most often TV audiences multiscreen for reasons unrelated to the first screen, but to fill time during breaks (43%), to catch up with friends (38%) and for background noise (36%). However, sometimes audiences multiscreen to get more information about the content on TV (21%), to discuss with friends what is on TV (14%) and to interact with what was happening on TV (13%).

Multiscreening is important for brands because it has become important to their customers. According to a (2012) conducted by Google, 90% of users today switch from one device to another in order to accomplish a task over time, while 98% of users move between devices the same day. Google classifies this behaviour as sequential multiscreening.

As can be seen from Figure 8: Top Activities Performed When Sequentially Screening below, the top activities performed when sequentially multiscreening between devices are browsing the Internet (81% of users), social networking (72% of users), shopping online (67% of users), searching for information (63% of users),

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managing finances (46% of users), planning a trip (43% of users) and watching online videos (43% of users).

Figure 8: Top Activities Performed When Sequentially Screening (Google, 2012)

Simultaneous multiscreening, on the other hand, happens when more than one device is used at the same time for related or unrelated activities. Google (2012) classifies simultaneous multiscreening in two categories: for unrelated activities, it becomes multitasking (78% of simultaneous multiscreening) and for related activities, it becomes complementary usage of simultaneous usage is multi-­‐tasking (22% of simultaneous multiscreening).

In addition, users use an average of three different screen combinations daily, with 81% of users having television and a smartphone, 66% of users having a laptop and a smartphone and 66% of users having a laptop and a tablet (Google, 2012). As can be seen from the statistics above and Figure 9: Smartphone: The Most Frequent Device Used When Multiscreening below, smartphones are the most frequent device used in simultaneous multiscreening. These are used with all the other devices, be it a

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television, a laptop or a tablet. It only reinforces the idea that among mobile devices, smartphones are the most personal and ubiquitous device that customers have and that marketers need to be aware of in the digital world.

Figure 9: Smartphone: The Most Frequent Device Used When Multiscreening (Google, 2012)

As can be seen in Figure 10: Top Activities While Simultaneously Multiscreening below, the top activities that users engage in when simultaneously multiscreening are emailing (60% of users), browsing the Internet (44% of users), social networking (42% of users), playing a game (25% of users), searching (23% of users), working on documents (15% of users) and watching videos (9% of users) (Google, 2012).

Figure 10: Top Activities While Simultaneously Multiscreening

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Mobile Multiscreening for Customer Loyalty Multiscreening offers the possibility for brands to further reach their customers across devices, create a personalized message and fully integrate the aspects of a marketing campaign that will create a powerful experience. Each device used in this experience will bring the customer closer to a purchase. However, most important is their attitude towards the campaign and their willingness to continue the journey with the brand to become a loyal customer.

There are several ways in which marketers can use multiscreening to increase customer loyalty. McGoldricks (2014) explains that multiscreening audiences engage in three types of activities, which are relevant to marketers: they shift, stack or mesh. Shifting seems to be the most common behaviour (59% of consumption), defined by non-­‐ simultaneous use of screens (or sequential multiscreening, as defined by Google in the previous section). Stacking comes second (29% of consumption) when users multiscreen for unrelated tasks (or multitasking when simultaneously multiscreening, as defined by Google in the previous section). Meshing is the activity of using a second screen to “enhance the media experience by researching, talking about or engaging in the content being viewed on the television screen: (or complementary usage of simultaneous multiscreening, as defined by Google in the previous section).

Milward Brown (2014) claim in their study that consumers engage with brands in a meaningful conversation only if brands understand the context and place their advertising accordingly, so that customers are most receptive. Indifferent of consumers’ activity, whether meshing, stacking or shifting, brands need to integrate themselves in

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their multiscreening habits. For example, many live TV shows such as The Voice, America’s Next Top Model or American Idol have incorporated social media into their routine. Throughout the shows, they ask audiences to tweet, like, share and comment on the activities happening on the television, knowing that their audience will most likely have a second screen available to interact.

That being said, the most opportunities for increasing customer loyalty come from meshing, as users are actively engaged and willing to follow up on the message seen on the first screen. McGoldricks (2014) explains that the habit of meshing can bring advertisers most return, as the audience is most interested to participate; and when they interact the experience of all screens is highly elevated. In addition, if users break the habit of staking, then marketers can also use it for increasing customer loyalty. This can happen only if “the first screen inspires a positive mind-­‐set, like curiosity or interest through compelling content. The opportunity must then follow a common usage path and provide content” (McGoldricks, 2014). Moreover, the study done by Google claims that since customers are sequentially using multiple devices, brands need to consider their experience above everything else. Therefore, saving their progress between devices, either shopping carts, signed in experiences or email progress can greatly contribute to their engagement as well as preference and loyalty. All these are opportunities that marketers can take advantage of when deploying a successful marketing campaign.

However, with the growth of mobile device usage and rapid adoption, “smartphones and tablets are well-­‐poised to become a multiscreen audience first screen” (McGoldrick,

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2014). Therefore, their role in the purchasing journey, as well as importance in increasing loyalty are not negligible. Google supports the idea that specific content viewed on a device triggers behaviour in consumers who are simultaneously multiscreening on other devices and this is why brands should not limit their advertising campaign results to the device initially used for searching. In support of this idea McGoldricks (2014) argues that each device is a tool, which can be utilized for different purposes in the marketing campaign. While smartphones retrieve the best results for calls to action, (like pools and sharing opinions), tablets are best for extending the TV experience with additional content and laptops are used mostly for more detailed research and purchase.

Therefore, marketers have the channels, the devices and the tools to properly communicate and engage the customer in order to offer a truly rich experience that will increase their loyalty. However, by understanding the customers, their behaviour and journey, brands can create a whole rounded experience across devices that flows logically and satisfies the consumers’ needs and wants (Econsultancy, 2014).

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Conclusion Mobile developments do not show signs of slowing down and are predicted to be disrupting the technology industry in the following years. Emerging economies and countries such as India and China will increasingly adopt smartphones and are predicted to drive the growth in this market, while tablets will solidify their status in consumers’ lives (MarketsAndMarkets, 2014).

As the technological landscape changes from year to year, devices are also changing the way in which customers perceive and interact with brands. By communicating, engaging and creating a personalized experience for users on mobile devices, brands can increase their feeling of trust, belonging and thus loyalty. Communicating with users can easily be done nowadays due to the ubiquity of the Internet connection on mobile devices. This connection, the popularity of smartphones and tablets, as well as users’ need and willingness to be connected have created an always-­‐on generation of avid content consumers. Through apps, web browsing and social media, brands can reach out to their customers and deliver a targeted message that enriches their experience.

Creating personalized experiences is highly important in a society focused on the individuals. Mobile retargeting allows marketers to use information about customers’ behaviours across devices in order to create richer experiences, as well as ensure purchase and increase loyalty. Even though in its infancy, mobile retargeting has the potential to become a major disruptive tool in the marketing industry because of its ability to track users’ purchasing funnel and reinforce the message along it, indifferent of the device utilized. Nevertheless, engaging customers has become more difficult, due to the multitude of disruptions from the online and offline environment. Yet, mobile

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devices offer the opportunity to involve users in highly integrative campaigns because of their habit of multiscreening, and of using multiple devices at the same time. By synchronizing the content on each of the screens utilized, marketers can find the right time when users are willing to engage and deliver their message more successfully.

Nonetheless, the pace at which the industry changes brings a new opportunity that is qualified by many as the future of mobile marketing and is entitled deep linking. Deep linking is a method through which apps are better linked to the online product pages so that they can be opened within the app. Steve Olenski discusses in an article for Forbes that “the reason this is so important is for the fact that it allows advertisers to simplify the mobile user experience.” In other words, by facilitating the transition from the app to the product page on mobile, the users can access the product more easily, and thus are more likely to buy it. Considering that 80% of the time spent on mobile is inside apps as well as the length of the purchasing funnel that customers go through on mobile, there seems to be a need to facilitate users’ experience, so that conversion happens at a faster rate.

SeatGeek, a web application that tracks tickets for concerts and sport events on the secondary ticket market uses deep linking to increase their in-­‐app buying rate by shortening the purchasing journey. Co-­‐founder of the company argues that deep linking shortens the conversion process in the purchasing funnel and increases in-­‐app buying.

Moreover, deep linking can have great benefits for brands and marketing professionals because it represents a method of reaching out to customers when they are willing to

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make a purchase. John Milinovich (2014), CEO of URX explains that deep linking makes a brand’s marketing more effective because it links apps to the content on the web. In doing that, brands create a more relevant and effective marketing campaign, which can convert more customers more easily. In addition, in an article for HasOffers, David Lee (2014), mobile developer at URX describes the usage of deep linking in the marketing industry as being versatile because marketers can use the apps to reach their audience through every channel: email, notifications, SMS, social media, web browser or retargeted ads.

Mobile deep linking becomes a useful tool not only for increasing conversion rate, but also for increasing customer loyalty. Sam Shank (2014), CEO of HotelTonight, the global leader in apps for booking last minute hotels, says that deep linking has allowed them to offer customers a richer mobile experience in app than on mobile web and it allows brands to develop a relationship with its customers that can increase their sense of loyalty.

Therefore, mobile deep linking is the method through which brands can optimize their users’ experience in-­‐app, increase their conversion rates as well as their customer loyalty. It is an integrative approach that considers the users at its core and which has gives results for the apps that have already used it, such as HotelTonight and SeatGeek.

Mobile marketing facilitates and optimizes customers’ experiences above everything else, by enabling brands to communicate, engage and create personalized messages that are transmitted to their targeted audiences at the right time on their preferred devices.

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Mobile Internet connection, multiscreening, mobile retargeting as well as the newer practice of mobile deep linking are all features of the versatile mobile generation, that if used properly in marketing campaigns can bring brands the ultimate prize, customer loyalty. Therefore, even though mobile marketing is established as an advantageous marketing practice as it has been explained throughout this thesis, it is safe to say that with time mobile will evolve from being a marketing medium to reach out to customer into being a strategy for business success.

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