Watch a video of several people reacting to their designs being displayed on the billboard:

The great part about this campaign is the excitement that it generates.  People want to participate is this mobile marketing campaign because it’s a 2-way form of communication.  It allows people to participate in the process and buy-in to the message that Nike is trying to get out to consumers.

The creativity in campaigns such as this will be the key to being successful with mobile marketing. In fact, a recent study shows that consumers’ distaste for mobile marketing is continuing to grow.  The study, conducted by BIGResearch, shows that:

• 67 percent don’t like text ads (vs. 64 percent last year)
• 60 percent don’t like voicemail ads (up from 57 percent) 
• 60 percent don’t like video ads (up from 56 percent
• 52 percent say mobile advertising is an invasion of privacy (up from 50 percent)

This isn’t necessarily bad news for companies looking to use mobile marketing.  But what it does mean is that companies need to make sure they are being creative and offering something of value or entertainment to consumers.  As consumers are bombarded with advertisements, simply sending a text ad is no longer going to be effective.

RainedOut began in 2004 and since then the company has built a following of more than 2,000 leagues and groups, from the Boy Scouts to local sports teams.  The service is free for the groups, and it allows group leaders to send 160 character messages out to a list of subscribers.  Parents, players, and fans are encouraged to subscribe in order to receive the team’s announcements.

Within the past few months, RainedOut made a strategic decision to capitalize on its captive audience of sports enthusiasts.  Each message now contains a 20 character identification of a sponsor. National organizations, such as Five Guys, have signed on to have their name displayed at the bottom of the team’s announcement.

One of the main benefits for companies who partner with RainedOut is the open rate of the messages. 95% of subscribers open the messages from RainedOut within 4 minutes.  Companies can also take advantage of situation-based advertising, which means that a day changing event has given consumers a new opportunity to spend time and money.  

So far, RainedOut only has a few sponsors, but this advertising opportunity seems to have a lot of growth potential for companies looking to target sports enthusiasts.  There are hundreds of thousands of subscribers to RainedOut, the open rate is extremely high, and by including the sponsorship at the bottom of the message, the advertisement is non-invasive.

Starbucks mobile app

Starbucks has been a leader in the mobile marketing industry, being one of the first companies to offer mobile coupons via text messaging.  Mobile marketing seems to be a natural fit for Starbucks’ fast-paced customers.  Their mobile payment system is a way to speed up line times, provide convenience to customers, and improve the overall customer experience. 

Although mobile payment has yet to become mainstream in the U.S., it is already common in Asia, Europe, and South America.  A study released by Research and Markets found that “mobile payment users worldwide are projected to increase from 81.3 million in 2009 to nearly 490 million by the end of 2014.”  

If mobile payment is predicted to become mainstream, smaller retailers who are unable to invest resources into developing applications will need an alternative solution.  That solution lies in companies such as Bling Nation, a mobile payment company that works to connect banks, retailers, and customers.  The system works through an RFID tag that is attached to the back of a mobile phone.  At checkout, customers tap their phone on a Bling-enabled device which triggers a debit from their checking account.

Bling Nation’s business model is designed to offer benefits to all three of these constituents:

• For consumers, it offers an easy and convenient way to pay for purchases.  It is also deemed to be highly secure as the tag does not store any personal information, and a pin is required for transactions guarding against fraud if the phone is lost or stolen.  Another core benefit for consumers is that it is compatible with any mobile phone.
• For businesses, it offers a way to attract new customers by providing an easy and convenient way to pay.  It also cuts processing fees in half compared to the fees of credit card companies.  
• For banks, it helps to differentiate services from competitors, reduces fraud, and provides faster transaction processing.

It is difficult to tell if a system such as this will become mainstream.  Although it would certainly be a convenient way to pay, in order to use the service your bank must offer it, as well as businesses where you shop.  This model is clearly one that exhibits network externalities.  As more consumers join the network, more businesses will want to offer the payment service, and vice versa.  As a consumer, the more businesses that accept mobile payment, the more convenient it will be.

According to a survey by the Mobile Marketing Association, 92% of adults have a mobile phone and 19% use their phones for banking.  This number is expected to grow to 22% by the end of 2010.  The chart below shows how the gap between mobile banking and online banking is expected to decrease over the next few years.

Mobile banking is being led by the biggest banks including Citigroup, Wells Fargo, JPMorgan Chase, and Bank of America. A handful of other banks have recently begun to offer mobile features.  There are three main strategies that banks are pursuing:

1.) SMS, or text messaging, is the most universal strategy.  Almost every cell phone is capable of sending and receiving text messages, allowing banks to offer SMS services to a wide range of customers. This is the service that my bank, M&T, is currently offering.  The process is to simply text ‘BAL’ to an access code and in return they will text the balance of your account. Texting ‘HIST’ allows you to view your recent banking transactions.  The downside of SMS services is that the functionality is extremely limited. It is also considered to be the least secure of the mobile banking strategies because information is stored on the mobile phone.  The MMA predicts that SMS banking will show little to no growth in 2010.

2.) Mobile web offers a step up from SMS banking by offering greater security and functionality.  The key with mobile web is that the bank needs to  optimize its site in order to create a positive web experience for customers.  Banks typically create a separate site that only offers the most important transaction features.  Performance is also critical since mobile web pages typically take longer to load than regular internet connections.

Bank of America's mobile web site

3.)  Mobile applications are by far the most user-friendly strategy.  Mobile application developers have more control over the user experience and how information is displayed on the mobile phone.  This is also the most costly option as it involves creating applications that are device specific.  It is thought that mobile applications are the most secure option; however, there has recently been an increase in fraudulent applications offered for download.  Banks should make their mobile applications available for download directly through their web site so that customers know they are downloading a legitimate application.

Chase mobile app

The key to mobile banking is to offer a positive user experience.  The tolerance level for bad experiences is lower with financial services than it is with other industries. Customers need a feeling of security in order to engage in mobile banking.  If it takes three attempts to get a transaction to go through or if a user doesn’t receive a confirmation text, they will most likely give up on using the service because they may feel their information is at risk.

This scenario could be made possible by a technology called geo-fencing, which is essentially a virtual perimeter around a business or, in this case, a real estate property.  In Chris Thorman’s property management blog, he demonstrates how geo-fences would look with this map:

The idea is that when someone enters the boundary, and if they are subscribed to the alerts, they will receive a notification on their GPS-enabled phone.  Although the real estate industry has yet to begin using this technology, it’s clear that it would be a definite game-changer in the home buying process.  The convenience of receiving alerts instead of having to sort through online ads could be a draw for home buyers.  Plus there’s the added of convenience of already being in the neighborhood and not having to take entire days to drive around and look at homes.

Geo-fencing has traditionally been used to send alerts when a device exits a particular boundary.  Common uses include companies keeping track of their employees, parents keeping track of their children, or nursing homes keeping track of patients.  But recently, a company called Placecast introduced a program called ShopAlerts where customers can opt-in to receive notifications of sales and promotions for particular stores.   As customers enter a boundary near the store, they receive a message letting them know of a sale or promotion that is currently happening. The concept is that mobile marketing doesn’t have to be an intrusion; it can deliver something useful to customers at the right place and the right time.

In order to successfully integrate this technology, real estate companies would have to create a simple way for home buyers to specify their preferences.  They could set up an online form that could collect these preferences, have the user enter their mobile phone number, and then begin sending alerts.  The process is not only easy for the consumer, but it saves the company time too. 

As mobile marketing becomes more popular, and consumers become more protective of their privacy, tailored notifications will most likely prove to be the most sustainable form of mobile marketing.  If consumers have opted-in and specified their preferences, they won’t see these messages as intrusions. Geo-fencing for the real estate industry would be beneficial to both the consumer and the agencies.

The campaign raised nearly $10,000. It wasn’t quite the results the United Way hoped for, but it was a good start. And by the end of 2008, mobile giving had outpaced the first year of online giving, raising $500,000 compared to the $300,000 raised online in 1997, leading many to believe that mobile giving has a stronger potential than online giving.

Now, two years later, mobile giving has come a long way.  Haiti represented a huge turning point, with $50 million being raised via text message donations.  But more importantly, at $10 per text, this means that approximately 5 million people have now been introduced to text giving, realizing that it’s not only secure but it’s an incredibly simple way to donate.

It’s easy to see why so many nonprofits are anxious to cash in on the mobile giving revolution. More than 280 million Americans subscribe to a cell phone service, and text messaging is growing exponentially.  Currently 68% of 18-24 year-olds use text messaging, 37% of 35-44 year-olds and 14% of those over 65.  This represents a huge base of potential donors.

But not every nonprofit raises funds for natural disasters and emergency situations. Without the emotional appeal of an immediate crisis, nonprofits will have to be more strategic in their mobile giving campaigns in order to see results.  A recently launched campaign by Pathways to Housing demonstrates a perfect combination of technology and strategy.  

Although the results of the campaign aren’t in yet, there are several factors that would seem to point to success:

1. The campaign creates a feeling of immediate impact. I can see something happen when I send a text message, and while I’m in this frame of mind I receive another text asking me to donate.  By drawing on that feeling of urgency and immediacy, the campaign captures its audience in the moment in order to secure donations, not just awareness.

2.  The campaign has a strong emotional appeal.  Seeing a shivering homeless man projected virtually on the street is not something you see every day.  Although New Yorkers may be prone to seeing homeless people, this is a fresh way of capturing their attention and forcing them to understand the extent of the issue at hand.

3.  By taking place on the streets, the campaign draws a crowd.  When passersby see that others are interested in what’s going on, they will join in too.  That sense of community was one of the most important success factors in the Haiti campaign.  As people posted on their Facebook accounts that they had donated, others joined in. That feeling of ‘everyone’s doing it, so why shouldn’t I’ boosts credibility and makes people feel more comfortable with getting involved.

Simply having a text code and asking people to donate most likely is not going to draw the results that nonprofits hope to see. The numbers from Haiti are staggering and it can be tempting to want in on the action, but without a strategic campaign nonprofits may actually end up losing on the deal. It costs around $5,000 per year to maintain a text code and for smaller nonprofits it may be a challenge to raise that much.  The key will be developing strategic campaigns that stand out from the crowd and inspire people to take action.