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One-Stop Mobile Marketing is a Strong Investor Story, but Consumer Brands Need to be More Thoughtful

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The following is a guest post by Dorrian Porter, CEO of Mozes, via Mobile Marketing Watch

On Thursday, Augme announced that it acquiring Hipcricket two weeks following their acquisition of another mobile marketing company Jagtag. Augme states that they purchased Hipcricket to become the, “preeminent end-to-end mobile marketing solution provider” for consumer brands, agencies, pharmaceutical, health, and media companies. They’ll join the ranks of at least a dozen providers who in the space that state that this as their main objective.

Combined with Hipcricket, Augme claims it will clear about $16 million in fiscal 2012, nearly tripling revenue on a quarterly basis. The company is publicly traded on the OTC Bulletin Board and investors appear to be placing incredible promise on the end-to-end mobile marketing story. The market capitalization of the company is reportedly $235 million, representing a whopping 15 x the go-forward revenue story.

For over a dozen years, the year of “mobile marketing” has been just around the corner. Could Augme investors be right? Will 2012 will be the one and the “end-to-end” solution the answer? They might be as shareholders, but I’m skeptical that brands and agencies, who will ultimately define the success of our industry, should buy into the one-stop shop story.

The first wave of mobile marketing has been centered on third screen advertising, where Google established a stronghold with its acquisition of industry leader Admob. Larger players including Apple and AT&T are taking great interest in the space. Independent networks like Millennial Media and Mojiva have raised significant cash and are experiencing solid revenue upticks. I’ve observed that companies who are trying to be both the “mobile advertising” platform and the “mobile marketing” platform don’t do a very good job of delivering on either.

If you go back just a year or two, companies like Quattro (acquired by Apple), mQube (acquired by Verisign) and Enpocket (acquired by Nokia) were positioned as one-stop shop mobile marketing platforms. In the end, they were purchased by larger companies for pretty big prices (all over $200 million). But, in all cases, they were purchased for just one specific use: mQube for its messaging, and both Quattro and Enpocket were purchased for their ad networks. The result: Verisign sold the messaging business and now both ad networks are struggling under their new non-advertising oriented owners.

Even worse, brand customers who bought into the one-stop shop story were left with unimpressive, and in some cases, unsupported solutions for the other pieces of mobile marketing platform that they had purchased. While we still see a considerable amount of requests for “one-stop mobile marketing platforms” from the market, smarter brands and agencies have begun to segment their mobile marketing strategy across a few key areas and making their mobile vendor selections based on best-in-class performance. These areas are (1) mobile website building; (2) smart phone applications; (3) mobile engagement and messaging; (4) mobile analytics; and (5) mobile advertising.

“Traditional” digital agencies and digital platforms are competing and winning in these “mobile marketing” segments, which is not surprising. Ultimately, a brand typically wants their analytics for online and mobile housed in one platform and interactive agencies are proving that they can build equally compelling iPhone apps as they can traditional websites. While I can see the case for a pure play mobile or “third screen” advertising play, the odds are that the major online players will own that space.

So while the “one-stop-shop” mobile marketing story sounds good on its surface, and a potentially convenient path for marketers, licensing the one-stop platform will ultimately make it more difficult for brands and agencies to meet their larger goals. Brand marketers who understand that mobile now affects all aspects of digital and traditional marketing, recognize the need to slice and dice their mobile tactics across a broader mix of mobile and digital players.

Mobile marketing has to show innovation far beyond the format. The industry is starting to see real momentum and results delivered by best-in-class mobile marketing solutions based on unique areas such as location, interactivity with print, radio, tv and events, and the phone’s role as a personal assistant in the physical world. As the mobile marketing industry continues to mature, you can expect to see even more focus in these areas from providers and less talk about a one-stop shop. Whether investors can continue to reap the rewards of this simpler one-stop story remains to be seen.

About Mozes, Inc.

Mozes is the leader in mobile engagement around passion points like music, sports, entertainment, and causes. Our flagship mobile marketing platform, Mozes Connect, helps marketers to activate audiences at events, and other entertainment experiences, to engage consumers with interactive mobile campaigns, collect data, connect to social networks, and establish long-term relationships. Mozes customers include Ford, Virgin Mobile USA, the Country Music Association, the Portland Trailblazers, and Rock the Vote.”  The company was founded in 2005 and is headquartered in Palo Alto, California. Visit us atwww.mozes.com and follow us on Twitter @mozesinc.

Written by Kees Winkel

August 6, 2011 at 18:20

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