Optism™

For almost 60 years, there was a symbiotic relationship between consumers and marketers over the amount of advertising flashed on TV screens, radio and newspapers. Consumers got free or subsidized content and marketers got huge market shares in order to push their wares. The slow decline of these traditional media outlets, caused by the advent of the Internet, DVRs, satellite radio and mobile phones, has marketers scrambling for new ways to target audiences on these new platforms.

No where are the stakes bigger than mobile and mobile location. Mobile already has the highest penetration of consumers and most people have them with them 24/7. We know that consumers are highly protective of their phones and feel that mobile ads are an invasion of their personal space.

Marketers are seeking the mobile Holy Grail; the oft-repeated scenario of a consumer walking by a Starbucks while their phone beeps to alert them to a Starbucks coupon.

Meanwhile, an opposing force is gaining power. Consumers are busy declining mobile app tracking when they download new apps and turning off their existing apps which have their location.

Consumers are now more aware of how marketers are tracking them and their location.

Over at Mobilegroove, mobile rock star Joy Liuzzo tackles the concept of location awareness in her article entitled, Location Data Use & Misuse; How Marketers Must Approach Mobile Sentient Consumers. Ms. Liuzzo defines “mobile sentient” as consumers who are “aware of precisely how public their private device and behavior has become and the extent to which third-parties have visibility into it.”

There is strong evidence that marketers have become more daring in their exploitation of a mobile user’s rights and that consumers have become increasingly fed up with the practice. Ms. Liuzzo mentions a number of mobile privacy lawsuits; including a class action lawsuit against Path, Twitter, Apple, Facebook, Yelp, Foursquare, Gowalla, LinkedIn, Rovio (Angry Birds), Chillingo and Electronic Arts filed in March in a court in Texas. It was found that these companies were routinely accessing a user’s mobile address book and transferring it to their servers – without the user’s knowledge or permission. Not disclosing this practice to the user was a violation of their rights. Meanwhile in New Jersey, the Attorney General filed a lawsuit last month against an educational game maker who was collecting information from children and transferring it to a 3^rd party company. In a Harris Interactive survey commissioned by TRUSTe, 42% of US smartphone users identify “mobile privacy” and “security” as top concerns, while 94% identify online privacy as an important issue.

The danger for marketers is that making repeated privacy violations will result in consumers turning off location access for all apps. This would be unfortunate, denying the marketer the opportunity to deliver relevant, opted-in offers in real-time (something only mobile can do) and reducing the potential value to the consumers.

Conclusion

Marketers should be honest with your audience about the data they collect and only track the data they really need. Companies should clearly state their privacy policy in language that is easy for users to understand. Obviously, these two opposing forces need more education on the topic, so there can be work towards defining generally acceptable levels of privacy for consumers while providing marketers data so they can deliver true value. The Mobile Marketing Association has published a set of privacy policy guidelines for mobile apps to addresses the core privacy issues and data processes of many mobile applications. It’s worth a read if you want to maintain long term engagement with your customers and especially earn their trust.

LevelUp, the mobile payments division of SCVNGR, sent a cannonball shot last week across the bow of mobile payments and credit card companies by waiving credit card processing fees for retailers during mobile payment transactions. This could be a highly disruptive moment for the traditional payments industry by potentially reducing the $50 billion dollars that credit card companies currently charge retailers and providing retailers new opportunities via mobile payments to deliver added value to consumers. So far, other mobile payments players like Google Wallet, Square, PayPal, ISIS, Inuit, VeriFone and Dwolla have not followed LevelUp’s lead.

How Does LevelUp Work?

LevelUp's mobile payment app for the iPhone and Android has already been downloaded by 200,000 users. Once consumers download the app, they register, add their credit card information and choose their target city. The company has a roster of 3,000+ retailers in 30 US Markets (New York, Boston, Chicago, etc.) and is hinting at an overseas expansion. LevelUp charges 35 cents for each dollar discount the retailer provides consumers in the marketing campaign. A consumer purchases goods and services, paying for them by flashing a QR code from the LevelUp mobile app. The consumer can also add a tip to the mobile payment.

For example, a pizza parlor can offer a consumer a $2 discount, so the $10 pizza can be purchased for $8. The campaign cost the pizza parlor $2.70 ($2.00 + (2.00 x 35%)) and LevelUp gets 70 cents. This is similar to a Groupon for the retailer, but the cost is much less and is highly targeted. LevelUp also offers customer loyalty campaigns for the same cost, where existing customers receive a discount once one spends a certain amount of money, i.e. 10% off after you spend $50.

How Does LevelUp Do This?

Interchange is the service that payment companies provide to retailers to process payment transactions. The service typically costs between 1.5% and 3% per transaction. Seth Priebatsch, CEO of SCVNGR calls LevelUp's new feature, “Interchange Zero”, which eliminates the interchange fee. Until last week, LevelUp was charging retailers 2% per transaction. Mr. Priebatsch said LevelUp was able do this because the interchange rates his company pays are “astonishingly low” and because his technology uses algorithms that move money through networks more efficiently. In addition, LevelUp has special relationships with many banking institutions. Mr. Priebatsch hopes that other mobile payment companies will follow suit and 0% interchange becomes the norm not the exception. He says, “The long-term effect is that people will do what we’ve done — find a way to make money in this space that offers value beyond moving money,” he said. “We need to give the business something above and beyond just the ability to accept payments.”

Conclusion

For retailers, LevelUp allows them to run highly targeted marketing campaigns based on location and preferences. LevelUp analyzes the activity of consumers which will allow it to provide retailers with consumers who are more likely to accept the campaign. While LevelUp does not ask for preferences during sign-up, one would expect more opt-in options which would allow LevelUp to direct even more targeted campaigns for retailers. For consumers, they will get lower prices as the transactions fees are reduced and retailers could potentially pass the savings along. We applaud LevelUp for changing the paradigm and focusing on providing value to consumers.

Digital Moms in the US are an increasingly important demographic for marketers. Mothers are accumulating more wealth and making more shopping choices and using more technology than the average person. Digital moms are more likely to be owners of smartphones and more likely to consult others when making purchase decisions.

How should mobile marketers tap into this important segment?

Here are a number of mobile stats that can help marketers effectively market to digital moms.

Moms have money. An article from Asking Smarter Questions provides some key statistics about both women and mothers. Moms represent a $2.4 trillion market in the US. By 2028, the average American woman is expected to earn more than the average American male. Women are earning, spending, and influencing spending at a greater rate than ever before, accounting for $7 trillion in consumer and business spending in the US. Women are making more than 85% of all consumer purchases, including more than 50% of traditional male products, such as  cars, power tools and consumer electronics.

Moms are socially connected via mobile. In a study by NM Incite, at least half of moms use social media via mobile devices, compared to 37% of the online population. In an article from Asking Smarter Questions, 64% of moms ask other mothers for advice before they purchase a new product and 63% of all mothers surveyed consider other moms the most credible experts when they have questions. Additionally, 92% pass along information about deals or finds to others. Moms are using Facebook and Pinterest to share tips, product recommendations and shopping deals with their friends.

Moms are savvy and connected shoppers. Moms are 70% more likely to download online coupons from retail marketing websites and 65% more likely to download coupons from a manufacturer’s website than the average person. Additionally, 92% of moms pass along information about shopping deals or finds to others. 55% of moms who use social media daily said they made their purchase because of a recommendation from a personal review blog. Almost 20 million online moms will read blogs and 1 in 3 bloggers are moms. 77% of mom bloggers will only write about products or brands whose reputations they approve of, and another 14% will write about brands or products they boycott.

Moms are demanding mobile users. Nielsen says that some 54% of American moms are using smartphones: considering that the US population just tipped 50 percent for smartphone ownership that means mothers are more likely to be smart phone owners. Additionally, moms are about twice as likely to own either a smartphone or a tablet compared to other women.

Moms have a love/hate relationship with technology. In a Yahoo and Starcom MediaVest Group study, 71% of moms said that technology was part of family together time, while 52% said that technology was a distraction.

Not all digital moms are the same. Advertising Agency MWW surveyed 1,000 moms to better understand their use of digital and social media. They found five digital mom archetypes; Mobilizers (Younger, hyper-connected moms using mobile), Urban Originals (influential taste-makers), Practical Adopters (working moms who use technology to stay ahead), Casual Connectors (Older moms who use mobile technology to connect with their kids), Wallflowers (Younger moms who are consumers of media). Providing multiple means to connect with these subgroups is important.

Moms are more likely to shop online. Women account for 58% of all total online spending and 22% shop online at least once a day according to Asking Smarter Questions.

Moms are more likely to become a fan or follow a brand online. When using social media, moms are 38 percent more likely to become a fan of or follow a brand online, and moms who blog are more than twice as likely to follow brands and celebrities compared to the online average.

Conclusion

Digital Moms are mobile-equipped, multi-tasking, socially-connected, family-protecting, brand-loyal, savvy-shoppers. They are well informed consumers who share what they know with other mothers.  What are the keys to tapping into the digital mom juggernaut? Be relevant and authentic. Meet them online where they are. Provide moms with tools, lists and apps to help them manage their lives. Take the time to understand their needs, build their trust and deliver on your promises and you just might be lucky enough to have a new army of brand loyalists.