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Cost and ROI for Mobile Campaigns



Patrick J. Moorhead
Director of Emerging Media
Razorfish

September 18, 2009

Patrick Moorhead oversees R&D initiatives on behalf of Razorfish’s Advanced Marketing Solutions group. This division helps clients and staff understand and evaluate emerging media technologies, including mobile media. He offers cross-media consultations that identify the practical applications of using emerging media as a marketing vehicle.

Mr. Moorhead discusses the mechanics of mobile campaigns, the similarity between online and mobile metrics and the fundamentals of mobile ROI.

eMarketer: What do mobile campaigns cost?

“An eight-week campaign for mobile media...we’re probably talking about $250,000 to $300,000.”

Patrick Moorhead: An eight-week campaign for mobile media—which could be a combination of mobile display and text messaging—we’re probably talking about $250,000 to $300,000.

That investment offers substantial reach and will allow us to do pretty specific targeting at the device and content levels, and even a little bit of geo-targeting. It includes the data from the test and some very favorable rates on CPMs or CPC.

With that kind of an investment, I should be able to go back to the client and explain how mobile worked for them. We’ll be able to make some real decisions after that.

eMarketer: What kind of metrics and benchmarks should marketers expect?

Mr. Moorhead: Marketers want to know, how many acquisitions of consumer phone numbers or e-mails did a mobile campaign drive? How many messages did we deliver? How many page views did we get at the WAP page? What were the most popular products viewed at the WAP level? How many clicks did the mobile banners get?

A lot of these metrics look similar to the way that we measure online media, which is one of the neat corollaries between online and mobile.

One thing that is overlooked is that mobile kind of lives in the middle of the media ecosystem. It’s kind of a thread that stitches together an experience from online to TV to a billboard to a magazine to a preroll video online. We refer to mobile as the connective tissue in digital.

In order to plan and effectively capitalize on the technology inside a large organization, you’re bringing a group of people together who typically don’t spend a lot of time together. It could be someone in the e-commerce catalog business, a digital marketing person, a IT person and, potentially, even an outdoor media person.

These people never cross paths but because of the requirements of working in mobile, they now have to collaborate. I think a separate class of metrics is needed regardless of campaign performance—how did the organization perform around embracing the channel?

Even if the campaign tanks in terms of performance metrics, if the group resolves who owns, maintains and pays for the mobile marketing and media channel, that might be a better metric for success in the short term for organizations seeking to understand it.

eMarketer: What about ROI?

“I redefine ROI as return on innovation as opposed to return on investment.”

Mr. Moorhead: I redefine ROI as return on innovation as opposed to return on investment. Return on innovation is that organizational metric that assesses how well the organization embraced the channel.

Our online display campaigns typically have 0.01% to 0.09% click-through rates. If it’s well-planned and targeted, it’s not unrealistic for a mobile campaign to have a 1%, 2% or even 3% click-through rate depending on the creative messaging and the offer. In sponsored SMS campaigns, we’ve seen click-through rates on sponsored text links go as high as 9% and 10%.

For a retail client, for example, we’ve seen unique visitor traffic to the mobile Web experience equal the online page view traffic numbers. Essentially, we were able to drive a volume of traffic to the mobile Webpage that reached parity with the traffic that we drove to the online page.

What’s interesting about that is that the amount of money we spent in mobile to drive a parity number and page view traffic between online and mobile was 5% of what we spent online to achieve the same traffic.

The full version of this interview is available here, to eMarketer Total Access subscribers only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs.

Check out today’s other article, “Twitter Power Users Solidify Dominance.”

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