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Guest Article: Membership has its privileges

26-September-2011
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Guest Article: Membership has its privileges

The second decade of the 21st Century will almost certainly be remembered as the time when social media came into its own. The great attraction of the Internet has always been its interactivity, but only in the last few years has social activity become truly mature and pervasive on the Internet. People are now more connected than ever before, participating in conversations and communities of interest, where geographic location is no longer a major limitation.

This sense of community, this idea of membership, is fairly attractive to consumers. It appeals to notions of status, and coupled with a certain amount of special treatment, can be a useful marketing tool. Mix this together with the communications potential of a device like the mobile phone, and the result can be some very powerful leverage that works in both the consumer’s and marketer’s favour, a rare win-win situation.

One of the challenges marketers and advertisers face is the need to overcome a certain amount of consumer resistance. Today’s consumer has more choices than ever before, and is exposed to a ridiculous amount of media and information on a daily basis. The savvy consumer faces enough competing advertising material to be somewhat skeptical about claims put forward through those channels. In addition, because so many things are competing for the individual consumer’s attention, he or she can find it difficult to locate what they are interested in amongst the clutter.

Membership can be the mechanism used to let the consumer help themselves – and help marketers in the process. Out There Media has a different approach, one in which consumers themselves play a role in the marketing process. Instead of beginning from the somewhat adversarial traditional position where marketers have to overcome consumer resistance, Out There Media uses a process called opt-in marketing that is a quite revolutionary approach to the usual marketing problem.

Opt-in marketing is, as the name suggests, a scheme where consumers themselves choose to receive marketing material. This is done by Out There Media’s telco partners in Asia, who can offer their subscribers a chance to join the programme. These subscribers sign up, indicating their preferences and perhaps sharing some amount of personal information – all of which is done at the subscriber’s discretion. Membership in the programme entails receiving marketing material, but this material is carefully crafted and channeled in such a way as to ensure that members only receive relevant material that they are likely to be interested in. Advertisers using this channel can tailor-make campaigns to this ready audience, offering incentives, special deals, electronic coupons, and so on. In addition, telcos can reward members of the opt-in marketing programme with loyalty points, which can be exchanged for products or services.

This opt-in marketing programme, offered as a membership scheme, does a great deal for advertisers. It facilitates a great amount of demographic profiling, as well as allowing for more accurate targeting. Accurately channeling marketing material to customers that are most interested in it, or that are the most desirable target audience, makes the best use of advertising budgets. The entire programme uses the mobile platform (SMS, MMS) to deliver information directly to the consumers in question.

As of end of March 2011, Out There Media’s opt-in database in the region stood at 5 million, showing how much people want to be part of these groups. Not only are members rewarded with loyalty points, they have access to offers, promotions and specials before others, and in some cases, have exclusive special deals that only members can take advantage of. This makes membership even more desirable.

From the other angle, the results are even better. According to a whitepaper released by Out There Media earlier this year, the average conversion rate for opt-in marketing and advertising stands at 25.15 per cent, considerably higher than the rate for mobile display ads (in the low single digits), more than 20 times the response rate for direct marketing (1.38 per cent) and very much higher than web advertising (where a response rate of 0.08 per cent is considered a successful campaign response rate). In some cases, the rate of response to opt-in mobile advertising was as high as 50 per cent.

When offered membership, consumers were more willing to share large amounts of information. Many consumers were more willing to share information on their location (97 per cent) and interests (96 per cent) in order to receive better targeted advertising. Opt-in mobile advertising also reaches beyond the traditional demographic targeted by new media offerings, going beyond the 15-25 male range. In fact, 72 per cent of consumers are between the age of 20 and 39, with a fairly even split between the genders. Additionally, while the most actively engaged verticals were FMCG, beauty & fashion, finance and automotive, the method worked well across all verticals.

Opt-in marketing is powerful, because it taps into the very human need to belong to a larger community, as well as tapping into status and class markers by offering members substantial privileges and special treatment. By offering loyalty points and other incentives in return for consumer attention, plus using information provided to target marketing material more accurately, consumers are more likely to be engaged, more likely to try out or follow-up on products and services that appeal to them. Engaging consumers through the mobile channel is also powerful – the mobile phone is a device that is with consumers almost 24x7, making awareness levels much higher than other media. This is a real change to more traditional marketing methods, and as the results show, gets a far better customer response.

Opt-in marketing is part of a new way of thinking about marketing, where consumers themselves have more power than before, and participate actively in self-selecting what material goes to them. This in turn changes marketing material from an unwelcome intrusion into something of value to consumers. Opt-in marketing may become one of the key pillars of marketing, as consumers relish the opportunity to be part of these deal-making communities. Considering the higher rate of conversion and the more accurate targeting offered by opt-in marketing, it turns out that membership has its benefits, not just for members, but for marketers as well.

(Fabrizio Caruso is Vice President, Business Development & General Manager, Asia-Pacific, Out There Media.)

 

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