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Mobile Marketing: Is Channel More Important Than The Product Itself?
Thoughts from Ogilvy’s Rory Sutherland

rory_200×250.gifI had the pleasure of talking with Ogilvy’s Rory Sutherland in his London office the other day. Rory is the Executive Creative Director and Vice-Chairman, OgilvyOne London as well as the Vice-Chairman, Ogilvy Group UK.

Talking with Rory is always as entertaining as it is enlightening – if you get a chance to see him at a conference, don’t miss it. In this interview, we talk about branded utility, location, and why the channel may in fact be more important than the product itself.

Q: First of all, thank you for taking the time to talk with us about mobile advertising.

Actually, I prefer the term mobile marketing. I think advertising is an unhelpful word, particularly in relation to the mobile device, because people tend to think of unasked for content, appearing at an irrelevant moment, with no contextual relevance. And that’s not what the mobile should be used for.

Q: How should brands be using mobile?

For the most part, the way to use the mobile is just the opposite of what we think of as advertising – it’s “asked-for” content, timely, relevant to context, possibly location-specific, and possibly personalized. This means the target audience, instead of being a “how many”, should be a “who”, a “when”, and a “where”.

People sometimes think I’m crazy when I say that, but for example take a look at Google. They just target people by ‘when’ – the moment you ask a question about “X”. So they are targeting a moment of need, not a person.

Q: How well does mobile fit with existing advertising practices?

rory_quote4.gifOne big problem the advertising industry has with mobile is that in general the advertising industry has been run on a CPM basis, where it defines an audience by their size, not by their purity. So the industry doesn’t distinguish between a vast lump of rock that may contain some gold compared to a nugget of pure 23 carat gold.

The point is that a self-selected mobile audience might be worth 1000 times more per person than a TV audience depending on the degree of specificity.

Q: What do you see as the strong points of mobile that we should be utilizing?

With a device like this, there is the opportunity to become extremely relevant, to such a point that your advertising no longer becomes advertising, and actually becomes indistinguishable from a service.

Q: Do you have some examples of this?
I think that Blyk is a great example. The way they approach advertising is such a democratic and conversational mode.

For example, instead of saying “Buy A Pizza!”, they might start the conversation by asking if you like pizza, then move on from there.

And when they do studies asking subscribers what they thought of the advertising they had received, many subscribers said they had not received any ads, just free content.

Q: There is currently a lot of experimentation into various mobile ad formats, which do you think have the strongest potential?

Branded Utility – this is a model that needs to be explored more.

rory_quote1.gifPeople tend to think of advertising as a form of entertainment with a brand attached. On television, when you had bought the audience’s 30 seconds of attention, you were actually interrupting them, and you had a certain obligation or indeed necessity to make the message amusing or pleasant to watch.

Equally, you might argue that your first obligation to earn your place on the mobile device is to be useful, to provide them with something that is genuinely beneficial.

So, the assumption that “with advertising you need to start with something funny”, is probably wrong when applied to the mobile device, and branded utility is something to be looked at.

Q: Lets talk about location, what’s your view about how it will play out?

rory_photo2.gifPeople on the move have very specific needs, which are quite often location specific. Now this may be utterly irrelevant for 80% of advertisers, but to 10% of advertisers, this may be the most important thing.

For example, if you can find a way to reach people that have just come out of a theater, or just driven 2 hours without a stop, that could be critical.

I’m also interested in location outside of the mobile phone context, such as in-car GPS as an advertising medium. For example, in 10 years will you still need to site your drive-through restaurant on the motorway, or will it be enough to pay to have it be flagged on the navigation systems and people will find it?

Q: The last time we talked, you made the interesting comment that people often “exercise channel preference before product preference.” Can you explain that further.

We should understand that the channel determines the audience and the behavior much more than the product proposition does in many ways.

I first noticed this many years ago when I was doing direct mail marketing. If we made the same exact offer to 10,000 people, but for 1/3 we said to reply by mail, 1/3 reply by phone, and 1/3 reply either, the results were strange. We would get for example a 5% return by phone, an 8% return by mail, and a 12 to 13% return by offering either!

Now to a classical economist this makes no sense, but what it really says is that people are more sensitive to the response channel than they are to whether they need the product or not.

Q: Are there other examples of this?


For example, young people in general don’t give to charity. But if you let them give by text message, they become quite generous.

Another observation I’ve made is seeing a McDonalds restaurant where there is a queue of 9 cars for the drive-through window, and the restaurant itself was empty. Logic would suggest that any of the cars at the back should just park and come in to get the food, but somehow it seems they have decided they want a drive-through almost more than they’ve decided they want a McDonalds.

rory_quote5.gifFinally, when Argos, the British retailer, implemeted some enhanced mobile services such as check and reserve and order by phone, they found that 50% of the business they brought in was incremental. That’s an extraordinary figure if you think about it.

Q: What do you take from all these examples?

In some ways, the activity itself, the product, is actually secondary to the user interface (experience) in determining who your audience is. In standard economics, this is a very strange thing.

Think about the effort that a company puts into its product. The fact is if you go and improve your product, no one may notice much, because most products are pretty good. No one’s pizza is really bad, but if they offer to deliver it, that’s news.

Q: How does this impact advertising?

I think a lot of companies look at their target audience, and then decide which channels to offer. They say: Our core demographic is “X”, what media and channels do our audience like to use, we’ll invest in those.

Arguably, changing the channel might completely change the target audience. I don’t think you can decide who your core is until you’ve offered every single channel of delivery.

Q: And what are the implications for mobile?

To me, the important thing for mobile is not saying “this is our target audience, they use mobile, therefore we must do this”. Rather it’s understanding how you can develop completely new product propositions, completely new uses for your core business, based on offering new channels like mobile.

In a sense, when you invent drive through, you are in effect putting a small hole in the side of your restaurant, and increasing by about 25% the number of people that want to eat with you. When you do mobile, its exactly the same. Suddenly people discover new applications for what you offer.

Q: Last question, can you tell us a little bit about the Ogilvy Innovation labs?

rory_photo3.gifAt Ogilvy, we know that mobile advertising and marketing will be very big, we know it’s important, we know it’s interesting. So Ogilvy’s aim is take the initiative and “prime-the-pump” for this market.

Otherwise, we feel there is the danger of a standoff in the industry – clients will say “we haven’t seen anything mobile that’s working” and the industry will say “well, you are not paying us to do anything”. So probably we need to pump prime the whole thing, or else we’ll end up in a big Catch-22.

As an example, we need great mobile advertising case studies to show clients. And this is a wonderful way to exploit that advantages of our international network – a great story from London or Singapore can prompt client activity in Prague.

We are setting up several labs – Singapore, Beijing, London, New York, perhaps others – and each will each have a special focus. We are still working out some of the fine points, but I’ll be happy to give you all the details when we’re ready to go.

Rory, thanks very much for your time and your thought-provoking viewpoints. And I’m sure we all look forward to seeing some interesting and exciting results from the Ogilvy Advertising labs in the near future.

You can also read Rory’s blog about various marketing and advertising topics here.

Also read the MobiAD post this week: Ogilvy UK Brings In Mobile Expertise


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