Context is What Defines Mobile Marketing

"Context" is one way of describing the advantages of mobile location as an attribute of mobile marketing that is quite distinct from PC marketing, which historically has been more anchored in fixed location devices.

Click the image for a larger view.

But context includes more elements than location. Context includes a consumer’s situation, attitudes, and preferences. Context should prove a primary underpinning for many developing mobile wallet services that aim to integrate offers, loyalty, rewards, in-store promotion and advertising or other marketing programs into mobile payment systems.

Incremental revenue from existing services. In the near term, benefits will lean toward being incremental, such as higher conversion rates on existing products or services. Brick-and-mortar retailers of electronics, for example, will convert more in-store shoppers into buyers.

Service industries such as banks or insurance companies might see higher satisfaction translate into more loyalty and
share of wallet. Brands will benefit from higher awareness and association with innovation, says Julie Ask, Forrester Research analyst.

In the near term, in other words, the upside will consist of retailer value flowing from more efficient targeting of marketing and promotional messages. That should lead to incrementally higher sales at brick and mortar locations. Aside from volume changes, retailers might also see higher profit margins on some products because the context and targeting allow more elastic pricing.

Over the longer term, the expectation is that entirely new digital services could develop, using richer knowledge of buyer preferences and history, experiences that are "more fun," with deeper customer engagement with products that are experienced as more personal.

Technology will play a role. Today, smart phones have GPS, accelerometers, gyroscopes, magnetometers, soon will have near field communications and high-resolution displays. All those tools can enhance contextual information. But more likely is on the way.

New sensors, possibly including arometers, microbolometers (essentially a camera that creates images using infrared wavelengths and heat), chemical sensors, and other sensing technology might be added to higher-end devices. Such devices might, with a user's consent, supply such information as a consumer’s altitude, speed, temperature, and presence of relative lightness or darkness, orientation to the north pole or gravity. Dual cameras have already appeared in phones enabling depth perception.

That means consumer packaged goods marketers could promote drinks based on the weather and time of day, for example, says Ask.