Mobile marketing, ready to rise on the Romanian digital industry
Despite last year’s predictions, 2015 will not be the year of mobile marketing in Romania, say pundits. Still, the sector has been described as the “little star” of the digital industry. The innovations and the people are in place and the agencies are ready, players told BR, it only remains for the clients to have more courage, invest bigger
budgets and be ready to take the industry to a new level.
Mobile marketing professionals have started the year hoping that the specialists are right and that 2015 will be the year of mobile marketing in Romania. But has its time really come? Are advertisers investing bigger budgets and ready for innovative ideas in Romania as well as in CEE? “‘The year of mobile marketing in Romania’, I would say will be each of the next five years. Last year mobile marketing became a sort of ‘little star’ of advertising. Everybody is talking about mobile marketing and all marketing specialists know that it will play the most important role in the digital marketing of the future,” said Maia Novolan, general manager of Syscom Digital. Her team has just returned from the Mobile World Congress in Barcelona, the global industry’s most important annual event, professing confirmation of their beliefs: sooner or later a big part of life will become mobile, whether objects, actions or events.
Still, specialists told BR that Romania is unprepared for mobile marketing at consumer level, although for know-how and technology, the main players are more than qualified and ready to market their wares. Agencies are able to provide highlevel technology solutions and tools, similar to what can be found in well developed markets such as the USA and UK. “At nationwide scale, Romanian consumers need more time to become heavy users of mobile phones. Romania is moving in small steps, but fast. We have more and more marketing activities with mobile components and, more importantly, marketers set aside dedicated mobile marketing budgets, although still of a low value,” added Novolan. According to the most recent IAB Europe AdEx Benchmark including data about Romania, in 2013 the budget for mobile advertising was 0.7 percent of a total of about EUR 35 million spent online – still small beans compared to the figures for mobile usage in Romania. “I think the budget will at least double in 2015 since digital is on an overall increasing trend and we are talking about such a small amount,” said Bogdan Nitu, CEO at Webstyler. Dan Virtopeanu, managing partner at Breeze Mobile, predicts that this year will see continuous growth in local marketers’ intentions to explore mobile marketing. This trend will also bring a rise in the number of projects, but their volume and budget potential will remain behind online and still far below TV. “I don’t believe that 2015 will be the year of mobile marketing in Romania. 2015 will be the year in which smartphone penetration will pass 50 percent and, in doing so, will be the starting point for 2016 or 2017 to actually become that year,” Virtopeanu forecast.
Beyond the budgets
Exploring further, Nitu highlights that internet usage on smartphones now represents about a third of all internet usage in Romania and such a figure cannot be ignored. It is only natural that marketers think it is time to invest in mobile marketing. “The first thing every marketer should do is to create mobile-responsive versions of their web platforms. We are in 2015: a mobile version of a website is not a nice extra, but a must,” added Nitu. Every platform Webstyler created in 2014 was mobile responsive. The company is also responsible for the digital and mobile campaign for the first brand launched by people, Telekom. It was the most awarded mobile campaign at Internetics 2014, winning two mobile communication awards: for mobile campaigns and mobile apps. The app was downloaded by 26,000 people before the launch and thousands interacted with it during the show. 2014 was a year of accolades for Breeze Mobile as well, which won three awards along with The Geeks for the “Redescopera Romania” (Rediscover Romania) app (Gold and Silver at Mobilio, and second place at the Mobile Awards). The firm also received a Silver Mobilio for BlitzApp and a second place at the Mobile Awards for the “Orasul Meu” (My town) app. A special project that the agency flags up is the launch of Samsung Live Smart 365, alongside Starcom MediaVest and Leo Burnett Group.
Looking back at 2014, Kubis Interactive representatives say that most of their clients requested mobile version for all of their digital work and, in some cases, even developed the campaigns as a “mobile first”. Kubis created big “mobile ready” communities for Ursus and Dove and for international brands such as Radegast and Birell (Czech Republic). Moreover, the agency focused its efforts on services such as mobile advertising and performance media in order to deliver KPI and make mobile marketing relevant for its brands. The local mobile marketing market includes SMS campaigns, mobile display campaigns, app development and mobile websites. Public data are still thin on the ground. Still, based on his experience, Virtopeanu estimates the value of the Romanian mobile marketing at around EUR 10 million, adding that it could reach EUR 12 million this year. Novolan is a little more optimistic, saying that in 2014 the overall market was worth around EUR 15 million, and in 2015 could rise by at least 20 percent, to stand at EUR 18-20 million. “The value for 2014 was calculated by me based on some official public numbers, SMS volumes transacted via mobile operators’ networks and revenues made by companies from mobile activities. The values do not contain the revenues made by GSM operators from mobile internet traffic, which are clearly higher in 2014 than the total value of the other mobile activities,” said the Syscom Digital’s representative. In the last year, her company has developed complex digital platforms for desktop and mobile, combined with special innovative consumer activation tools, some of them quite unusual. L’Oreal, LG Electronics and Toneli Holding, three new clients gained in 2014, gave Syscom Digital the opportunity to deploy bigger projects and to exceed clients’ expectations, she says. The firm describes itself as no longer a 100 percent mobile agency, but a 360 degree digital company with expertise in consumer engagement. Dan Damian, managing partner at Ceva Design, admits that he believed the “year of mobile marketing” would have been in 2012, when he started to bet on the evolution of the market and develop mobile apps. “The growth was a lot slower than we anticipated, but we have clients that are early adopters and trend setters and they keep us optimistic. In 2014 we gained clients in many business fields, such as publishing (Cariere magazine), retail (Sun Plaza Mall) and food & drinks (Beraria H),” Damian added. “What I would have loved to see more in 2014 was mobile gaming: some mobile apps developed by strong companies and brands from this country, that would have been able to generate awareness and create a new type of bonding between the consumer and the brand,” said Stefan Iarca, country head at Possible. This year the agency has won a client in Singapore and launched a worldwide breakthrough mobile app called “Adventures of Poco Eco – Lost Sounds,” the first mobile app in the world marking the launch of a music album, says the company.
With the local mobile marketing sector still making baby steps compared to the rest of the advertising world, but with Romania’s reputation for early and fast adoption, pundits say trends in Europe and at global level will soon reach the country. “The general trend for digital marketing for the coming years will be a mix of mobile and online and matching offline to amplify customer relations and maximize the results, whatever they are: response rates, sales, likes, visits to a platform etc,” Novolan said. Romania must find a smart way to catch the attention of and interact with consumers in the digital environment (via their mobile phone, laptop or a digital device), persuading them to take action offline (in-store) or, vice versa, catch consumers offline (in a shop, at the shelf etc.) and persuade them to continue their experience in the digital world (on a site, social media platform or with the use of a digital device). “While mobile apps will deliver experiences especially from utility areas with a high degree of re-use, mobile sites have to migrate to more professional alternatives, from simple versions with adapted format for mobile (resizing) to dedicated mobile sites with highly responsive formats and mobile-dedicated structure and content, available on multiple browsers,” added Novolan. Virtopeanu sees three big new trends coming. First, more and more brands will copy or abandon Facebook mobile apps. More than 75 percent of the Romanians active on Facebook use mobile devices and can no longer be ignored. Second, advertisers will spend more money on mobile campaigns on Google and Facebook, which are performance oriented. “Unfortunately, when it comes to mobile, local publishers will grow more slowly,” predicted Virtopeanu. A third forecast is that mobile will start to be integrated more into communication campaigns, with crossmedia interactions. For example, this year, the award for best Marketing Campaign at Global Mobile Awards went to a campaign that generated mobile-TV, mobile-online and mobileoutdoor interactions. Also, at the Mobile World Congress in Barcelona this year, the concept of “programmatic buying” was circulating as a future hot topic which could achieve results in Romania in a couple of years. “The automation of all variables of a marketing strategy and their real-time adjustments could bring great results; maximization of reach is exactly what marketers want, but at the same time it may have some limitations as well,” argued the general manager of Syscom Digital. Mobile will have more and more impact on retail, say pundits. While companies often use SMS to bring their consumers to their location and to grow their sales, they could start to use mobile apps and mobile sites and focus more and more on innovation to improve their clients’ buying experience. “Location-based services and geo-localization may in the future become mainstream marketing activities for retailers. In some cases exploiting these features means investment in infrastructure. Video-mobile content will gain volume in the future, encouraged by the high-speed mobile internet and future developments. Video content is more qualitative, generates better experiences for consumers, allows visual engagement and is user-friendly,” said Novolan. The Webstyler CEO commented, “I think that from this year mobile will witness another revolution with the launch of Apple Pay, bringing together the largest payment companies. This will probably involve security issues, of which Romanians are very careful.” Nitu also believes that 2015 will bring some steps towards the “Internet of Things,” although in Romania this relates to early adopters. “This is a sign that if you haven’t drawn up your mobile strategy yet, it is time to start, as technologies evolve at lightning speed. Also, in Romania, mobile will be used a lot in trade marketing, as is already happening in more developed countries,” he said. Meanwhile, Vlad Popovici, managing director at Kubis Interactive, expects mobile advertising spend to increase and be better targeted, as mcommerce and mobile payments have a bigger impact on overall sales. “Wearables and smart things will help brands create interactive and innovative experiences for users. Mobile isn’t just one of the most important channels for marketers; it’s becoming the most important channel. Mobile usage continues to rise as consumers purchase more and more smartphones and use these devices to shop online, interact with brands and with each other,” Popovici added.
Clients seek integrated communication
As an embryonic market, customers are cautious about their investment budgets. Some are testing and evaluating the potential of the market but only a few are doing so on a regular basis. “Budgets are up on last year, and SMS communication remains the main volume generator and budget consumer,” said Virtopeanu. Today, clients are looking more and more at integrated communication, including mobile channels, say pundits, becoming more open, as the penetration of smartphones grew so much last year. “When it comes to budgets, we are in a similar situation to years ago when we were convincing clients to optimize their websites for all browsers. To launch an app means to design it at least for iOS and Android, if not even for Windows, and that means a bigger investment. On the other hand, we have to make continuous efforts to prove the results mobile marketing can bring to a business,” Nitu said. Commentators note that marketing managers are becoming more interested in relevant ways of bridging the online domain with offline media through innovative experiences, and mobile devices are the tools that might do that. “Whether the user interacts with the brand through gamification or there’s a rewarding mechanism in place through locationbased systems, brands can create relevant experiences for their fans. Budget-wise, mobile or innovative ideas account for some 8-10 percent of the marketing yearly budget,” said Popovici.
Free versus paid
In the last two years the average age of mobile app users has increased and every day more mature people become frequent users too. The young audience was and still is mainly focused on games and entertaining, while older people mostly use utility apps, e-commerce and travel apps. “Generally speaking, Romanian mobile app users are not that different from users in other countries, except maybe when it comes to costs. They look to download ‘easy-to-navigate’ applications which deliver the right content that they are looking for. Some research in the past showed that 80 percent of Romanian users prefer to download free applications,” Novolan said. Nothing has changed from that point of view lately: Romanians are still reluctant to pay for mobile apps. This is not solely related to mobile, but to content acquisition as a whole. Romanians are not used to paying for content; which is also why local payper- view systems are not yet working. “I think the core target is like this (in terms of tech and usage focus): they have an Android/ iOS phone with
“The year of mobile marketing in Romania will be each of the next five years. Everybody is talking about mobile marketing and all marketing specialists know that it will play the most important role in the digital marketing of the future,”
– Maia Novolan, general manager of Syscom Digital
a two-year subscription, with some data included. They usually use the internet in places where they have access to Wi-Fi (work, bars, restaurants, home) and data where they don’t (e.g. traffic). They mainly use the internet for Facebook and e-mail, they have a few utility apps, not so many from brands as there isn’t a large Romanian range of such apps. They may have installed one or two other than Facebook social network apps (e.g. Instagram, Tinder),” outlined Nitu. Although all smartphone users have at least one app, especially in the utilities or entertainment area, their profile depends on the platform they use. “iOS users are more focused on the utility of the app, while Android users show greater interest in games. Despite the lack of relevant data, I estimate that around 10 percent of smartphone users have paid for mobile applications,” Virtopeanu concluded. In very well developed countries, users search for a tool and when they find it, take it (with or without payment). Romanian users first look to find the tool for free, and only if they cannot will they pay for it. “This is probably one of the reasons why the Android operating system is penetrating our market faster than iOS. People buy Android smartphones because they can get free content from Google Play, while in the App Store of iOS, most of the desired content is licensed and chargeable,” noted Novolan. In order to attract Romanian consumers, mobile applications need to have a proven utility for the user (solving a problem) or be entertaining, usually through gamification. Popovici believes that mobile applications should be as cheap as possible – either free or with in-app purchases, where items or extra levels can be added for a small fee, but have a benefit. Costs should be between USD 0.99 and 1.99 (providing real value on the medium or long term). Industry insiders also urge companies to think clearly what the best solution is for the client and his or her business strategy. It is one thing to be a startup that relies a lot on the success of that mobile game and another thing to be a multinational company, where the mobile app or game is just a part of a bigger campaign. “We believe in the model of in-app purchases and we consider it a great business model. At the same time, I believe that a free service should stay free until a point. The aspects that bring a certain quality, plus in the consumer-brand relationship, a brand’s new fidelity measures, need to have a premium note. And to be premium, they need to be exclusive, which involves a purchase. The client needs to feel part of an elitist, special group. The key is in the end a ‘free-premium’ type of communication,” said Iarca. Novolan, on the other hand, believes that the Romanian user needs to be educated to feel ready and understand the value and necessity of a paid app. “The app market is growing fast; every day thousands of applications are launched or updated and this rhythm is too fast for the Romanian consumer. Basically, the supply is bigger than the demand. The users’ need is there for sure, but we also need more time to educate the consumer,” said Novolan.
“What i would have loved to see more in 2014 was mobile gaming: some mobile apps developed by strong companies and brands from this country, that would have been able to generate awareness and create a new type of bonding between the consumer and the brand,”
– Stefan Iarca, country head at Possible
Mobile marketing is about long-term planning
The local market is adapting to technological changes, but the rhythm is still slow at nationwide level, say players. Technological evolution is not easily embraced by the ordinary consumer and if marketers do not dare exploit this area more and “force” consumers to learn how to use it, it will take even longer. Pundits call for courage and a new way of thinking. “On the other hand we need to make a real ‘shift’ happen, from mainly desktop marketing to equally mobile and desktop marketing, as companies would like higher engagement, conversion and conversation with their customers in the near future,” Novolan said. However, in large urban areas, mobile is growing faster and marketers and agencies must understand it in depth, with its advantages and risks, in order not to blunder. The mobile phone has the power to bring advertisers much faster and closer to consumers than before, but marketers have to avoid being too intrusive. Otherwise they will scare consumers away and never get them back. Education is again a key issue that must be addressed, believe commentators. The Romanian mobile market is still home to marketers and agencies’ representatives that need to push themselves and lift the knowledge bar a little more. “They still don’t know or understand the opportunities offered by mobile apps or the broad experiences that can be reached by using them (clients and customers’ loyalisation, up-sell, cross-sell, recommendations from new clients, etc),” said Dan Damian, managing partner at Ceva Design. “Besides the fast growth of mobile internet usage, an important aspect is that marketers are open to investing in mobile marketing. But the biggest issue is the fact we are a market that is used to short-term investments, while mobile marketing is about long-term planning as investment in mobile is returned mainly on the long term. Also, marketers and agencies have to put more effort into understanding digital relationships and mobile utility,” added Nitu. Iarca is calling for more entertainment for the user. At the moment, communication is hidden under too many marketing layers and is not focused enough on the user, he believes. “Everybody says that the user has to be at the center of the communication, but unfortunately this is not happening. I would like to see more play for the consumer, new mechanisms that are not just about a click, a video, a form, etc. To see an engaging online and mobile strategy. To see a big media group writing about Romanian study cases and our market. We are still a country that doesn’t want to leave aside the common, traditional way of doing things,” Iarca added. Besides the lack of real entertainment, the main problem of the market, according to Popovici, is the lack of trust or proven ROI for mobile apps in the overall marketing mix. “This is because most of these apps are built, launched and then abandoned, with no media promotional budget to help them reach a critical mass of downloads or uses,” said Popovici.