Thrifty consumers turning to their mobile devices

After all the talk, mobile marketing appears to be experiencing its long-awaited breakthrough year. While branded applications are leading the way in mobile marketing, many consumers are taking advantage of a new spin on a tried-and-true marketing tactic: mobile coupons.

Marketers are quickly turning to coupons to get the word out as well. Mobile coupon spending is expected to grow from $90 million in 2009 to $370 million this year, according to the 2010 U.S. Local Mobile Advertising and Promotions Forecast. That number is expected to hit $6.52 billion by 2014, ClickZ reports.

Printed internet coupons hold more of the coupon market than mobile ones, but the redeemed value of mobile coupons is 24 percent higher than internet coupons. Smartphones are driving the coupon market, thanks in large part to GPS capabilities that let marketers offer discounts to consumers who are in close proximity to a retail location.

M-learning takes novel approach

Findings of the Shuttleworth Foundation’s m4Lit (mobiles for literacy) pilot project, released this week, reveal there is real potential for engaging teens in reading and writing via their cellphones.

The m4Lit project, headed by Steve Vosloo, 21st century learning fellow for the Shuttleworth Foundation, aimed to gauge whether SA’s youth were interested in reading on their cellphones. It released an interactive m-novel called Kontax, featuring the adventures of a teenage graffiti crew, in September last year.

“In SA, teens don’t read and write enough, due in part to the fact that 51% of South African households don’t have a single leisure book, and only 7% of public schools in SA have functional libraries of any kind,” states the foundation.

Kontax appeared in a series of 21 chapters, of approximately 400 words each, in both English and isiXhosa. It was accessible on a mobisite and the popular cellphone platform MXit so teens could read Kontax on their phones, with prizes offered for the best comments and ideas for a sequel story.

Overall, 63 000 subscribers signed up to read the story, including 28 000 teens, aged from 11 to 18 years old. It’s estimated 7 200 teens read the whole story, according to the Shuttleworth Foundation, which says it will continue the project to explore the potential of mobiles for literacy.

Vosloo explains the idea for an m-novel arose because teenagers are not reading enough long texts. “Most digital reading is done on cellphones, but these are often just one-liners. So if teens are on the device already and it’s a viable distribution platform, it makes sense to get them reading longer texts on there.”

He believes Kontax was popular because it was relevant to teens’ lives and experiences. “We held story development workshops in Langa and Khayelitsha, and also gave them a platform for interacting with the story.”

Innovation generation

According to Vosloo, more innovative use is being made of existing technologies. “On one hand, people are building new systems and sites, but on the other they’re using available systems more innovatively.”

He cites the Dr Math live tutoring service as an example. “You, as a learner, can chat to Dr Math on MXit and ask any math question on any grade,” says Vosloo. “The tutor (a local university student) then goes through the question with you step by step, until you arrive at an answer.

“It’s a great example of using an existing infrastructure and commercial service as a learning tool.”

Another project is the ImfundoYami/ImfundoYethu platform, a collaborative initiative by Nokia, MXit and the Department of Education to deliver maths education to Grade 10 learners. The teacher can log onto a Web-based management system to send tests to learners and provide personal support. They can also monitor test results and determine how often learners have been using the system.

“So, instead of doing their homework on paper, students complete a multiple choice quiz, and the teacher can immediately see which questions have been answered and are right,” explains Vosloo.

He notes that learners have much higher access to phones than computers and even books. “Only around 10% of people in SA have access to a PC with Internet connection, while this percentage is much higher for mobile access, especially in urban areas.”

According to Vosloo, a cellphone is an effective learning tool, because it’s an intimate device. “It’s very personal and you carry it with you all the time. So, from an educational perspective, there are opportunities for contextual learning.

“If a learner goes on a field trip, they can take photos of soil erosion, for example, and information can be delivered to them based on their location.”

He adds that cellphones can be a powerful multimedia device, with the ability to record images and sound. “Mobile phones offer communication and interactivity capabilities which books don’t have, which also brings opportunities for collaborative group work.”

Digital difficulties

Vosloo hopes to see teenagers reading and writing more on phones, and an increase in interactive quizzes and curriculum-based tests on mobiles. “I really think, given the high uptake of cellphones in the country, and the immense potential for mobile, not enough is happening in this space.”

He says part of the problem is that adults don’t adapt to technology as fast as learners do, and that this can cause a bottleneck in teachers using mobile as a learning tool.

“Also, there’s a distraction factor around cellphones – if students are all pulling out their phones in class it could be disruptive.” He adds, however, that providing good, practical examples of ways for teachers to use cellphones in the classroom could help.

Other challenges include cost and access. ‘It’s not free and not everyone has access to a phone, or to airtime for accessing interactive learning materials. There are also issues like privacy and cyber bullying, which we don’t fully understand yet and which can be quite scary,” notes Vosloo.

He adds that in future, mobiles could be used not only in an educational context, but to provide support for teachers. “It could do more than just content delivery and take on an administrative and support role – which is a good way to get teachers onboard and using the technology more.”

BP now accepting gift cards as payment for fuel

Petroleum company BP on Friday said it would now be accepting almost all money tender - including gift cards - for the payment of fuel at most of its service stations.

The move comes in the wake of credit card payments for fuel sales not being accepted in South Africa by fuel retailers, because of the Merchant Service Fee they would have had to absorb.

But, BP has announced that it will contribute over 50 percent of the MSF associated with transactional credit and hybrid (such as cheque and gift) cards in order to accommodate its fuel retailers.

BP, the official fuel sponsor of the 2010 FIFA World Cup, said it was going out of its way to make paying for fuel easier for locals and foreign visitors expected during the Soccer World Cup season.

“For the first time in our country, motorists are now able to pay for fuel with any garage, fleet, debit, credit, cheque, charge card (such as American Express), and even Visa or MasterCard gift cards - at over 400 BP service stations nationally,” said BP South Africa’s Head of Marketing Programmes Joe Mahlo.

The Fuel Retailers Association (FRA) CEO Reggie Sibiya said to date, BP has been the only petroleum player to ease the strain on fuel retailers by subsidising costs associated with debit card fuel payments, and now too with credit and hybrid card fuel transactions.

Even though regulation on the use of cards at forecourts has become more relaxed over recent years, it has put tremendous financial strain on fuel retailers.

The latest move supports an earlier initiative by BP to support the majority of its fuel retail network and help government to more fully realise its objective in reducing cash-associated crime at service stations.

Since launching the portable payment debit card system initiative in 2007, BP has successfully removed more than R1 billion in cash from its forecourt network and has seen a considerable drop in cash-related robberies.

Other benefits of paying for fuel with a card include reduced forecourt congestion and fraud possibilities as the card is not taken away to be swiped at a central point, but is conveniently done right at the pump next to the car.

More than 400 BP service stations nationally already accept these cards to pay for fuel and the aim is to roll out this payment facility to the rest of BP’s network as soon as possible.

I-Net Bridge

The new world according to Dave Duarte

Never mind Raymond, the real truth is that everyone loves Dave Duarte. Rated as one of the Top 100 Most Influential Media and Advertising people in South Africa by Jeremy Maggs in “The Annual”, Duarte has just been appointed by advertising giant Ogilvy to integrate digital into the heart of the agency. This directive will realise the Ogilvy Digital Marketing Academy to ensure that Ogilvy “throbs with the pulse of social media”, as Duarte puts it.

What’s unique about Duarte is his ability to straddle two worlds. At UCT’s Graduate School of Business, he’s the director of two executive education programmes driven by the need to decode social media, called Nomadic Marketing and mobile Marketing. He’s also the brains behind the consulting intelligence collective Hiddlemind, public lead for Creative Commons South Africa and the co-founder of 27 dinners and Muti.

Duarte’s approach at the school of business is to use the space as pause for reflection and a place for engaging people who’ve excelled in business. “It’s about sharing epic successes and failures, not for delving into academia. As academics, what we should do is facilitate expert business perspective rather than lecturing or telling. Like good coaching, the answers come from the practitioners and from the critical necessity for business to innovate, not from dry academic tomes.”

Sharing is caring

What’s exciting is that this knowledge isn’t being harboured by the business elite, but shared with emerging communities of learning. Through Duarte’s role as Dean of the Digital Media Faculty at The Maharishi Institute of Management, best practice can be fed into the development of young minds previously denied access to social media smarts through bandwidth deprivation or economic circumstance. A Taddy Belcher inspired free university, the institute enables eager minds from impoverished communities to learn how to use social media to buoy start-ups, or how to create a viable business using social networks.

This is in line with Duarte’s belief that social media is a radically transformative technology that is forcing a whole new way of working or being an entrepreneur. His belief is that the real work is for businesses to come to terms with it. “This is the first time in history that we have a medium that enables many-to-many connections, and it makes no sense to ignore this enhancement in communication. This isn’t academes; it is fact. Think of it like this. If all our communication was face-to-face in the past, and then the telephone was invented and enabled remote speaking, wouldn’t it make sense to use the telephone? Social media is the same level of revolution or evolution.”

According to Duarte, globalisation is the bastard that’s causing all the problems by demanding that locals innovate, muck in and get to grips with the revolution. “Globalisation brings more players in the market, increases competition, and drives the need for innovation. Instead of operating in a limited pool, 2010 has hurtled South Africa into a global marketplace. 2010 has presented a rare moment for the world to see our value, to drive investment to this country and to create opportunities for growth. This will be an event that will radically disrupt the South African marketplace.”

And the world, of course, communicates through social media. Ford is already spending 25% of its marketing budget on social media, and is one of the few US car companies that didn’t need to be bailed out by the US government. When Ford launched the Fiesta in April 2009, it didn’t hand a bunch of new models to journalists, but took a hell of a gamble by getting 100 ordinary online ‘Joes’ to tweet, blog and Facebook the experience.

“What brands and companies are coming to terms with is that people are no longer consumers to manipulate. They are people who demand authentic conversations. That the best way to reach these people is to communicate through social media in experiments of mass collaboration.” Duarte says the current consumer mood is about trust, transparency, long-term relationships, choice and alternatives. “Choice makes manipulation difficult if not impossible. Then the declarative nature of social media means people are publishers, so brands and companies can get away with a lot less than they used to.”

Let’s collaborate

The biggest mistake companies are making is to view social networks as crisis response vehicles. “If you have a disaster and choose to be absent, consumers will work on assumptions, and populate social networks with these untruths. Then there’s the release of built-up rage and the perpetuation of the thought that companies don’t care. Being there quells the frustration. But social media shouldn’t be seen as a crisis response channel. It should rather be seen as a means for collaboration to break down the barriers between consumers and the company.” Duarte says the net affect of these conversations is the creation of a whole new way of working, where new levels of respect for people are put into place.

Then don’t be misled by thinking you can wait on the sidelines, because South Africa typically lags in terms of technology trends. Duarte says what business needs to consider is the 1/9/90 rule. “Only 1% of our community are active creators. Nine percent comment. And 90% are spectators. This means there is a small percentage of people who influence large online sectors. The power of social media lies with that top tranche of influencers, who have a lot of power concentrated in their hands. They are the advocates and influencers.”

The idea of advocates and influencers is nothing new in marketing, and the challenge in marketing now is for advertising managers and brand owners to understand how to influence the influencers. “It’s about understanding the influence. The top 10 trafficked sites in South Africa are all user-generated content and include Facebook, Google and Gumtree. Then what’s astounding is the power of Mxit, which is becoming a clear leader and is taking over from Google and Facebook in terms of local traffic.”

Internally, what’s crucial for business to understand is how social media is creating new pockets of influence in worlds of work. “People who wield the power within an organisation are not necessarily those who wield the most influence,” says Duarte, who cites Dr Karen Stephenson. A corporate anthropologist, Stephenson is recognised as a “leader in the growing field of social network business consultants”. In 2007, she was one of only three females recognised from a distinguished shortlist of 55 in Random House’s Guide to the Management Gurus.

“Stephenson’s work shows us that organised social media enables companies to identify and then influence key points of informal power. Within large organisations, these include social media role players who are ‘gatekeepers’ in that they control access to information or key points; ‘hubs’ who are the super connectors in businesses; and ‘pulse takers’ through whom one can get a strong sense of the general vibe or mood of an organisation.”

Back in power

Duarte maintains that if organisations are able to identify and influence these groups, then business will wield more authority, enjoy more credibility and retain some ’say so’ in informal structures of influence. “These are informal, unpaid roles. Giving these key groups access to information could help business in amplifying messages or identifying emerging power players or groups that could aid their cause.

“A lot of the social interaction that happens around work isn’t paid for; it isn’t about monetary rewards, rather it is all about status and social currency.” Duarte advocates giving these communities or individuals special insights and nurturing them to stimulate innovation and drive change, rather than just ignoring them.

“This is where technology maps onto the real. With social media you can map relationships, social growth, and social networks. This is a key trend emerging in the use of social media internally, and understanding the more human and social aspects of business,” says Duarte.

Who are the local business leaders when it comes to social media? Duarte says Old Mutual represents one establishment that ‘gets it’. “Old Mutual is engaging at a sincere level by getting some of the smartest minds to map out a systems approach that will drive organisational change through social media,” says Duarte. Think of it this way. Communication becomes increasingly difficult in a highly fragmented organisation, but social media offers new clues and paradigms for engagement.

“Old Mutual launched its new credit card with a major social media push. There was significant innovation in the way it communicated around the budget address in Parliament, which merged the use of Twitter with crowd sourcing. The result was a very engaging, collaborative and participative effort that repositioned financial planning as a lifestyle, not just insurance.”

Duarte says what’s different about social media in 2010 is that business is taking it seriously for the first time. “We’ve been talking social media for a while, and it’s been through the Gartner hype cycle, which speaks to hype, disillusionment, plateau and productivity. Yes, people are wary of technology fresh off a hype cycle, but they’ve watched pioneers riding the wave and getting benefit, and are now prepared to engage.” Social networks have arrived in the world of business by delivering real benefit.

IT Web March 2010

To the Naughty Corner!

First up we admit the whole Uni Time voucher issue has been a massive debacle. Big time.

For that we apologise. Now we’d like to make things better.

As we’ve done for the last few years, our intention was to give Uni students a quality offer in their first few weeks back by cutting out a 2 for 1 voucher and bringing it into us. But with the voucher going viral this has led to a lot of people innocently receiving an electronic version and trying to redeem it. This wasn’t part of the plan. And we’re sorry that you and our staff have been caught up in it.

As a small business, we didn’t think our staff & local suppliers would be able to cope with such huge numbers of vouchers coming through and we didn’t want to give you a bad Grill’d experience. But we should have bitten the bullet and given it our best shot.

You’ve since spoken loudly & clearly.

You want us to buck up and honour the voucher. So from now on that’s what we’ll do - at any Grill’d restaurant until 15th March, 2010. All day, every day. Please bring in a physical copy of the printed voucher or the original cut-out from the newspaper.

We’re not a big chain, so we can’t just ‘turn on’ an offer like this. As we speak we’re stocking the storeroom and herding the cows. We hope you’ll appreciate that our restaurants might be a tad busy over the next couple of weeks. We’ll be trying our hardest to still deliver the same burger and customer experience that you’ve come to expect from us.

Time to get out of the naughty corner and behind the Grill!

- Simon, Grill’d founder

Customer Acquisition Made Easy

Let’s say that you own a restaurant. Sarah has never been to your restaurant before, but she comes in one day for lunch because she is in the mood to try something new. She sees on your in-store poster that she can instantly receive 10% off her meal just by texting a special number code from her cell phone.

Sarah sends the text message and in seconds she is enrolled in your list and has a 10% off coupon that she will show her waiter or the cashier when she leaves.

Reminders are the gold

But as many restaurant owners know, without some prompting, there is only a 20% chance that Sarah will ever come back. It doesn’t matter how great the food is or how good the service was, the fact of the matter is that people are creatures of habit. Unless you can create a habit for Sarah to regularly visit your restaurant then her business will be lost forever. This is where mobile outshines traditional coupons and marketing methods…

It keeps on working

Now imagine being able to send Sarah a text message a week later for 10% off her lunch for today. You can send this message directly to her cell phone at exactly 11:30… the time when Sarah is thinking about where she wants to go eat lunch. OR you could send her the offer for 10% off her dinner meal for today… and you can send this message at exactly 5:00 when Sarah is leaving work and starting to think about dinner.

Sarah is back in your restaurant (probably with new customers that she will bring with her) and you are creating a habit of her and her friends to have lunch with you, or her and her family to have dinner in your restaurant.

AND the really amazing part is the sheer number of targeted customers that you can get to sign up every single day… It’s the snowball effect.

If you only get 10 customers or clients to sign up every day then at the end of 30 days you will have 300 customers on your list receiving notices and incentives to buy from you again and again.

And we’re sure that you can sign up 10 new customers everyday without even trying!

Game over for cellphone scratchcard culprits

There’s been a rather satisfying conclusion to the story of the scratchcard competitions, which were really just a means of hooking people up to a cellphone content subscription service.

To recap briefly: In July, Waspa - the Wireless Applications Service Providers Association, which regulates the industry - held an emergency meeting about a scratchcard competition which was inserted into several high profile magazines - some seven million of them in all.

By entering the competition in the hope of winning a holiday, a car or cash, many people unwittingly subscribed to a mobile content service which would add R210 to their cellphone bills every month.

Waspa ruled that the promotional material fell short of the requirement to “prominently and explicitly” identify the service as a subscription service.

“Consumers are unlikely to be making a request with the specific intention of subscribing to a service, but will most likely be intending merely to claim a prize or enter a competition,” the panellists said.

They also found the pricing information was not clearly and accurately conveyed and was thus “likely to mislead”.

The Wasp in question - Opera Interactive, delivering services such as ringtones, games, music and wallpaper supplied by Clarion Marketing - was ordered to stop the competition immediately; to stop charging those who were being billed for the subscription service after entering the competition, pending the formal review of the complaints, and to inform all “entrants” of the ruling and offer them a refund.

Waspa has since held formal adjudications about two Opera Interactive scratchcard insert campaigns, run in conjunction with different content providers, Clarion Marketing and Oxygen Marketing.

Despite protestations from the companies that there was no intention to deceive consumers or trick them into subscribing to their services, Waspa found they had transgressed the code in terms of transparency in several respects.

And because Opera Interactive has fallen foul of the code several times in the past, and been given lenient sanctions, this time the sanctions were tough.

In respect of the first complaint, Opera Interactive is to forfeit to Waspa R200 000, or all its revenue share relating to the subscriptions, less VAT and any refunds paid after the competition was stopped, which-ever is the greater.

Plus, Opera Interactive is to pay a fine of R400 000 to be collected from Clarion, or all of Clarion’s remaining profit share generated by the service, again minus VAT and any refunds, whichever is the greater.

In the second case, Opera Interactive was ordered to forfeit to Waspa R100 000; or all its after-deductions revenue share from the campaign, whichever is greater, plus the content provider is to pay Waspa a R200 000 fine or all its after deduction revenue share, whichever is greater.

The adjudication documents provide an intriguing insight how lucrative these cellphone content services are.

In response to Waspa’s emergency panel ruling in early July, Clarion Marketing states: “The current subscribers in respect of which Clarion has ceased billing constitutes 80 000 subscribers; the total loss of revenue to date as a result thereof being in excess of R1 000 000 …”

The final adjudications effectively wipe out all the profits all the players derived from these scratchcard inserts.

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