This white paper will help you understand the challenges and opportunities using mobile to create a one-to-one relationship with your customers.

1. An iLoop Mobile Whitepaper
Author: D’Arcy Salzmann
May 12, 2010
© iLoop Mobile 2010
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2. Introduction
With the arrival of digital marketing channels, the landscape of marketing has
changed forever regarding the way brands, publishers and virtually every other
type of company reach their target consumers and audiences. The most significant
change has been the advent of mobile marketing and the ability to interact with
consumers via the most personal and ubiquitous device ever—the mobile phone.
We hope this whitepaper provides useful information on how the mobile channel
can be used for promotional messaging and couponing, specifically in the way
precise, personal and contextual messages can enhance bottom-line marketing
objectives.
If you would like more information on mobile marketing campaigns using
SMS/MMS, mobile Internet sites, mobile-enabled Web sites and other advanced
mobile marketing technologies and strategies, please give us a call. We work with
Fortune 500 companies and companies of every size and industry, and would be
glad to discuss how can help you.
For more info visit our Website at www.iloopmobile.com or contact us directly:
Steven Gray | COO | iLoop Mobile Inc.
+1.714.801.2370. Skype: sgray12
Text message SGRAY to 20757 and get my business card on your phone. Try it for
free! www.txtcard.net
Connect with us
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3. Overview: The Evolution of Mobile Marketing
Mobile phones are pervasive. In the United States, nearly everybody has a mobile
phone. What’s more, mobile phones are personal devices, used extensively for a
variety for purposes and almost always within reach.
According to a study by market researcher Synovate, the U.S. has more than 286
million cell phone subscribers, 82% of whom never leave home without their
devices.
It’s no surprise, then, that applications and services for mobile phones have become
so popular. Between July 2008 and July 2009, users of mobile phones and electronic
devices in the U.S. sent more than 1.3 trillion text messages—almost double the 660
billion calls they made, according to CTIA (Cellular Telecommunications and
Internet Association).
The Pew Research Center, in a study released in December 2009, found that 68% of
cell phone owners older than 18 send text messages. Approximately 95% of 18-to-
24 year-olds send text messages. Even in older age ranges, texting is becoming
increasingly popular.
As of the third quarter of 2008, approximately 77% of U.S. wireless subscribers are
reported to have paid for text messaging either as part of a package or on a
transaction basis. The Nielsen Company estimates that text messaging is used
regularly by 57% of all mobile subscribers 13 and older. In any given month, U.S.
mobile subscribers engage in more text messaging than phone calls.
Given those numbers, it isn’t surprising that advertisers and marketers are seeking
to leverage text messaging for interactive engagement with consumers. In fact, SMS-
based marketing has established itself as one of the fastest-growing advertising
channels in the world today.
Forrester Research Inc. estimates that mobile marketing will become a $54 billion
industry by 2014. A Forrester survey indicated that 74% of marketers preferred to
use SMS messaging as a marketing tool, while 44% of consumers surveyed said they
would rather receive product information and other marketing messages through
SMS campaigns than via any other channel.
Early Successes in Short-Code Marketing
Short-code marketing involves text messages that incorporate a Common Short
Code (CSC), or short code. A short code is an abbreviated phone number used for
text (SMS) and multimedia (MMS) messaging.
According to Wikipedia, Canada’s Labatt Brewing Company in 2002 ran the first
cross-carrier SMS short-code marketing campaign in North America. Since then,
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4. mobile short codes have become increasingly popular as a new communication
channel for personal interaction with consumers.
Nielsen's report notes that so far, marketers have used short code marketing in a
range of ways, including simple information messaging, rewards programming,
couponing, and even direct SMS purchasing.
Nielsen cites the following examples of how SMS short-code messages have been
employed by brands and advertisers:
 Papa Johns, Domino’s Pizza, Chipotle and Pizza Hut allowed customers to
register ordering details online, then order pizzas from their mobile phones
via text message. Nielsen estimates that 552,000 AT&T and Verizon Wireless
subscribers texted with Domino’s Pizza, 279,000 texted with Pizza Hut and
182,000 texted with Papa John’s in Q3 2008
 Foot Locker sent special offers to its “VIP program” participants, with texts
going to approximately 306,000 AT&T and Verizon Wireless subscribers in
Q3 2008
 Subway’s FRESHBUZZ service allowed Subway customers to receive news
and promotions via text message. According to Nielsen, Subway sent
sandwich deals and other offers to 212,000 AT&T and Verizon Wireless
subscribers in Q3 2008
 Coca-Cola's My Coke Rewards program had engaged 1.1 million AT&T and
Verizon Wireless customers as of Q3 2008.
The following are a few examples of major brands and retailers who provide
marketing information through text and multimedia messaging: American Express,
Arby's, Best Buy, Citibank, CNN, Coke, E! Entertainment, HP Snapfish, Jiffy Lube,
Mandee, Paramount, Vans, Village Inn, Weather.com, Wells Fargo, and Western
Union.
Pitfalls of Broad-Based, One-Size-Fits-All SMS Marketing
Today, consumers look at every text message they receive almost immediately. For
marketers, that presents an immense opportunity, but it also entails a prohibition
against contaminating a rich marketing and communications channel.
That’s why the Mobile Marketing Association (MMA) established text-messaging
guidelines, monitored by the CTIA and wireless operators, to which all mobile
marketers must adhere. These guidelines were adopted to protect the consumer
from spam and unwanted messages, but also to provide consistency,
standardization, and to protect the integrity and overall value of SMS as a marketing
medium.
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5. As mentioned above, mobile phones are personal devices, so marketers must be
respectful of how they reach out to the consumer with marketing and promotions.
Broad, one-size-fits-all SMS marketing campaigns—uninformed by personalization,
relevance, and contextual immediacy—run the risk of alienating rather than
engaging the target audience.
Mobile marketing campaigns are far less effective when they fail to leverage the
personalization, precision, and relevance that are defining attributes of the mobile
medium. Consumers, for example, who opt in to a brand advertiser’s mobile
marketing campaign expect personalized messaging and promotional offers that
will speak directly to them. They want the communication to be personalized (based
on market segmentation and customer preferences), relevant (based on ZIP codes
and other geographic markers), and immediately actionable.
What consumers don’t want are mobile marketing campaigns that take an
impersonalized, shotgun approach, and that fail to speak to them directly. Such
campaigns run the risk of being perceived by the consumer as indifferent, irrelevant,
and even as a type of spam.
Consumers Wary of Mobile Marketing “Spam”
A recent study of college students by WPP Group’s Mindshare found that, even
though texting is preferred to face-to-face communication within the youth
demographic, approximately 76% of those surveyed said they do not like to receive
ads by text message. That opposition isn’t directed at the medium, but at how the
medium has been misused by unwary marketers.
Consumers in that demographic and others want dialogue first and foremost, and
they also want preapproval of advertisements sent to their mobile phones. For
advertisements to win that preapproval and trust, they have to offer value, which is
predicated on “smart” attributes of personalization, relevance, and immediacy.
Ensuring that Mobile Marketing Fulfills Its Potential
The problem is, how do marketers ensure that mobile marketing is personal,
relevant, targeted, and timely?
Thankfully, advertisers and marketers can use innovative new approaches and
technologies to ensure the consumer appeal and full effectiveness of mobile
marketing campaigns. Indeed, advertisers now are well placed to deliver value
whenever and wherever consumers can benefit from an interaction or transaction.
Such value can be delivered by ensuring that the marketing message is one an
audience is eager to hear. But how can that be done?
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6. Defining Smart Alerts and the Customer Lifecycle—and Why They Matter
The best approach is to ensure that mobile marketing communications, such as
alerts, are smart. What’s a smart alert? They are customized messages based on
relevant intelligence. They are targeted based on, for example:
 who the customer is
 what’s happening around the customer (contextual relevance)
 where the customer is (geographic location)
 how the customer has responded to offers in the past (database records)
Perhaps more important, once a relationship between the brand and consumer is
established, smart alerts can be integrated into the entire customer lifecycle:
 initial customer acquisition and to establish brand affinity
 two-way relationship building and conversion
 cross selling and upselling
 improving customer satisfaction and brand loyalty
In short, smart mobile alerts and smart mobile coupons are effective, immediate,
interactive, direct response marketing conduits. The Yankee Group estimates that
even mobile coupons can deliver redemption rates of 10% versus 1.2% for paper-
based coupons. The potential for smart mobile coupons is much greater.
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7. Market researcher Aberdeen Group determined that Money Mailer, an iLoop Mobile
Platform customer, employed mobile coupons to help one of its clients, a fast-food
restaurant, achieve more than a $20-to-$1 ROI with an integrated mail/mobile
campaign. The redemption rate on the mobile messages averaged a staggering 17%.
Because they are more relevant, the initial opt-in rate is expected to be higher, but
perhaps more important is the ability to continue to deliver relevant messages
during the customer lifecycle, translating into a lower opt-out ratio over time.
Smart alerts and coupons address the convergent interests of consumers and
marketers. Customers have opted in to receive the alerts and coupons, so they’re
amenable to receiving them and won’t regard them as spam.
Meanwhile, brands and advertisers tap the alerts and coupons to capitalize on time-
sensitive marketing opportunities. Carefully targeted and data driven, smart alerts
and coupons increase customer acquisition and conversion while also bolstering
brand loyalty. They take SMS marketing way beyond the simple, one-size-fits-all
approach.
Industry observers, including Nielsen and others, agree that the likelihood of
consumer purchases increases if the marketing message is targeted (based on
careful market segmentation), personalized, and offers point-of-need relevance. As
such, SMS coupons should map real-time information and profile history of direct
relevance to the customer.
Providing Mutual Value for Customer and Brand/Advertiser
As mentioned earlier, smart alerts and coupons are effective as marketing channels
because they deliver value to both customers and advertisers.
Benefits to consumers include:
 Opt-in nature confirms that consumers want to be engaged
 Immediate, direct response to promotions gives customers what they want,
when they want it (such as when a given product or service is first available)
 Personal convenience derived from consumers being able to act instantly on
relevant, compelling calls to action
Similarly, brands and marketers also benefit:
 Real-time, news and information driven alerts increase customer acquisition,
conversion, and loyalty
 A leap beyond “one size fits all ” SMS promotions confers brand and message
differentiation
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8.  Segmentation, personalization, and point-of-need relevance increases
likelihood of purchase
 Time and place relevance increases likelihood of purchase
 Valuable consumer data is captured for analysis and fine-tuning of future
campaigns
iLoop Mobile Platform: Delivering on the Promise of Smart Mobile Marketing
With its patent-pending Situation Relevance Engine, the iLoop Mobile Platform
advances the art of SMS marketing and reconciles the interests of consumers and
advertisers.
It does so by providing smart coupons that address the following customer criteria:
1) Physical location
2) Weather conditions
3) Redemption history (what previous campaigns a given customer has
responded to)
4) Purchase behavior and preference (which products and services customers
want to be informed about, and how and when they want to be notified of
actionable opportunities)
5) External events and information triggers (news and other developments that
might be immediately relevant to the circumstances and value proposition)
6) Any other relevant data source (whether provided by the advertiser/brand
or the consumer’s social networks)
Along those lines, the iLoop Mobile Platform has several advanced capabilities,
including the following:
 CRM Database Integration—Automatically delivers coupons relevant to a
customer’s profile data and history
 Coupon Management—Handles quota, validation, distribution timing,
expiration and redemption code management
 POS Integration—Integrates with in-store systems and coupon clearing
houses such as Infinian, Inmar, and others
 Dynamic Targeting—Targets individual consumers and groups of
consumers using any number of criteria or profile triggers
 Redemption Codes—Deliver unique redemption codes or SMS messages
with a URL link to WAP-based coupons
 2D Barcodes—WAP coupons can include standard or 2D barcodes for
point-of-sale retail redemption
 Consumer Behavior—Intelligent coupon database stores customer
behavior and campaign trends for subsequent targeted delivery or
campaigns
 Analytics Dashboard—Detailed, segmented results reporting.
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9. The iLoop Mobile Platform provides a comprehensive solution for mobile campaign
creation, management, and analytics. Platform features include advanced mobile
campaign reporting and analytics, SMS alerts with CRM targeted messaging,
expanded APIs, multi-byte characters for all international languages and viral
marketing applications. The licensed SaaS self-serve platform, along with the
Campaign Packages, are designed to help companies achieve significantly increased
ROI in mobile marketing, surpassing the performance of marketing channels like
email, print, Web ads and other traditional marketing channels.
How the Solution Works
How do smart coupons work in practice? The following chart illustrates one
example.
In the illustration above, a consumer sends an opt-in message to receive a coupon
from a brand or advertiser. The database receives the keyword opt-in message,
correlates relevant data relating to relevant criteria, and generates a personalized
coupon, either in the form of a contextually relevant SMS-only coupon or an SMS
message with a link to a WAP page that features multiple coupons and a barcode for
point-of-sale redemption.
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10. In all, it’s a personalized, targeted approach that provides convenience for the
consumer and flexible fulfillment options for the advertiser, brand, or retailer.
A marketing campaign would work similarly, as the following illustration
demonstrates:
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11. In the above example, an opt-in promotion prompts subscribers in New York City to
send a keyword via an SMS message. The keyword is received by the database and
referenced against all the relevant criteria, including weather. With 90-degree
temperatures producing sweltering heat in the New York area, the database—
responding to current conditions—intelligently chooses to send a coupon for a
discount on a summer skirt rather than one for a discount on a fall sweater. An SMS
coupon (basic SMS or enhanced WAP/barcode) is then sent to the consumer’s cell
phone. The consumer then redeems the electronic coupon for a discount in a retail
outlet.
Additional Campaign Scenarios
The creative possibilities for one-off promotions or campaigns are practically
endless.
Consider the example of how weather can be used as actionable criteria. During a
particularly oppressive heat wave in Houston, air-conditioned AMC movie theaters
could offer mobile coupons on two-for-one or three-for-two admission prices.
Similarly, a Starbucks in Seattle could offer latte specials during a cold spell.
Automotive dealerships might extend specials on snow tires in advance of winter
storms in the Northeastern states.
Data other than weather conditions can drive promotions, of course. Market data,
such as a surge in the Dow Jones industrial average, could trigger notifications from
Charles Schwab along with coupons offering complimentary investment advice at
local Schwab offices.
Back-office systems, such as inventory, could also drive smart coupons. Land’s End,
for example, uses business rules to clear out end-of-season inventory by offering
smart coupons that proffer “daily deals.” All inventory is assigned a promotion start
date and valid regional code. Sweaters and boots might be promoted in the North
and Northwest, for instance, with shorts marketed in Southeast and Southwest. Such
campaigns are monitored in real time and discontinued when stock is sold out. The
process is fully automated.
Using inventory-based mechanisms similar to those employed by Land’s End
combined with news-based criteria, the NFL or another major professional sports
league could offer opt-in coupons for discounts on jerseys of players who retire or
are traded. Presuming considerable inventory of a given jersey, the NFL could apply
a sharp discount and issue smart coupons to opt-in subscribers regarding sales of a
traded player’s former jersey.
News-based sports marketing also might occur at Foot Locker. If an athlete
associated with a certain shoe brand or tennis racket wins a competition or
tournament, Foot Locker could send out smart coupons regarding sales of gear
worn or endorsed by the victor.
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12. Immediacy, Interactivity, and Location Bring New Power to Mobile Marketing
A myriad of other examples, leveraging the extensive reach and inherent
intelligence of the platform, are possible. What’s important, however, is that all of
the above examples represent new advertising and direct marketing scenarios
unleashed by the interactivity and immediacy of smart SMS alerts and coupons. In
this new world, advertisers and brands aren’t limited by technical constraints. They
can take campaigns to the limits of their creativity and imagination.
One new area with tremendous potential is geo-fencing, a messaging mechanism
triggered whenever an opt-in subscriber enters or leaves a specific location. Called
Geographic Messaging Service (GMS), this nascent area is emerging as a powerful
addition to the mobile marketing arsenal.
A sample application of geo-fencing in action might involve a consumer who opts in
to a push messaging service for a restaurant chain or other retail brand, which
might link content to the user in a specific geographic setting, such as a one-mile
radius around New York’s Times Square. A personalized message featuring the
content—either a coupon for a special offer or a notification of a store event
occurring that day—would be sent to the opt-in subscriber when he or she enters
the predefined geographic area, which could include suburban malls as well as
urban centers.
The iLoop Mobile Platform makes it possible to deliver a complete campaign,
whether planned well in advance or executed extemporaneously as a result of
changing circumstances (such as an oversupply of inventory), real-time events
(weather patterns or relevant news), and, as discussed above, customer location. In
fact, a valuable aspect of smart alerts and coupons is that they can be invoked
opportunistically, as events unfold, to capitalize on situations that offer mutual
benefits to consumers and advertisers alike.
Moreover, the analytics capabilities of the platform give brands and advertisers the
post-campaign intelligence to customize subsequent marketing efforts for optimal
results. The dynamic interactivity of smart alerts and coupons gives advertisers a
wealth of ongoing insight into consumer behavior and preferences, facilitating
incremental improvements in later campaign effectiveness.
Proven ROI
The ROI from such campaigns can be compelling. The Aberdeen Group found that
Money Mailer, which has used the iLoop Mobile Platform to run more than a
thousand mobile marketing campaigns, has helped its clients achieve a 3.5-to-1
uplift in consumer response to the paper coupons, with between 2–11% opt-in rates
and 8–20% redemption rates across many campaigns. Those results have been
garnered by simply including a text messaging call-to- action on print
advertisements.
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13. What’s more, Money Mailer has found that typical print mailings with a mobile call
to action result in hundreds of new database acquisitions for small local businesses.
In just a few weeks, one local restaurant built a database for regular SMS messaging
that included more than 900 customers.
Summary: Mobile Marketing and the Continuous Customer Relationship
The widespread proliferation of mobile phones and the popularity of SMS
messaging set the stage for the first wave of SMS marketing based on short code
messaging. While many advertisers have been successful with broad SMS marketing
campaigns, new innovations enable smart SMS alerts and coupons that bring
personalization, relevance, immediacy, and value to mobile marketing initiatives.
Savvy advertisers and brands are seeking to develop closer, more personal
relationships with their customers. The formula for success must involve delivering
more value to customers as a trusted source of relevant, timely, and targeted
transactional information.
Mobile smart alerts and coupons give consumers unprecedented opportunities to
benefit from bargains and deals that they would not have enjoyed otherwise. At the
same time, they give advertisers and brands a direct, interactive channel to their
most passionate and loyal customers, affording opportunities to capitalize on
changing variables (inventory volumes, weather, external events, etc.) to realize
increased revenue and profitability. Additionally, advertisers strengthen their bonds
with customers, continually enhancing interactive relationships that confer mutual
benefits.
About iLoop Mobile
iLoop Mobile is a premier mobile marketing solutions provider to the world’s
largest enables brands, media companies, agencies, and retailers. iLoop Mobile's
marketing platform allows customers to quickly and independently create and
manage campaigns worldwide using an intuitive, self-service, Web-based package.
Customers can also take advantage of iLoop Mobile's extensive experience in
developing and launching mobile campaigns using the company's managed services,
which provide turnkey marketing programs for messaging, mobile Web, mobile-
enabled broadband websites and mobile coupons. All customers have access to
iLoop Mobile's powerful mobile Web and messaging analytics, enabling detailed
analysis of their mobile marketing activities. Founded in 2004, iLoop Mobile is
headquartered in San Jose, California, with offices in Krakow, Poland.
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