Mobile Marketing Budgeting: A Look at Mobile Marketing Cost Centers and Timeline

Trying to figure out how to cost out a mobile marketing program and how long it is going to take from start to finish to launch it can be a challenge.  This post is intended to help you with understanding where the key cost centers are in setting up and running a mobile marketing program.  It will also give you a sense of how much time you should budget to get a program launched.

Choosing your approach

When considering costs and schedules for your mobile marketing programs, you first need  to take into account which strategic approach you plan on employing to get the job done.  Are you going to 1) take the agency approach and have someone build and run your campaigns for you in an adhoc/one-off project based model, or 2) are you going to go to the opposite of the spectrum and do everything (strategy, creative, execution, technology build out, etc.) yourself, or 3) will you take a hybrid approach and find a middle group between these two poles.

Once you’ve chosen your approach you can figure out which costs elements you need to concern yourself directly with.

Understanding the costs

If you’re going to run adhoc programs, then you can simply treat all your mobile marketing programs as variable cost; that is, you have no upfront investments and you simply pay for the services as you use them.  However, if you’re going to invest in running mobile marketing programs yourself (i.e. in a do-it-yourself or hybrid model), you’ll want to  consider the upfront investments you’ll need to make to support  your initiatives.

Below you’ll find a high-level overview of the cost drivers for both upfront mobile marketing program investments and program variable fees.
Upfront Mobile Marketing Investment Cost Centers

There are four cost centers you’ll want to estimate when considering your upfront investments to setup your mobile marketing infrastructure; that is, if you’re considering using a do-it-yourself or hybrid approach to launching mobile marketing programs for and within your business.

• Strategy and resource, you’ll want to estimate the costs for your team, their training and the development and maintenance of your strategy.
• Mobile marking platform and application licenses, you’ll want to plan for the fees you’ll pay to obtain, gain access to, the application logic that will power your mobile marketing programs (like the iLoop Mobile mFinity Platform).  On average, depending on the functionality you license, mobile marketing application fees will range between some few hundreds of dollars~to a handful of thousands of dollars/month.  In addition to monthly fees, for access to a mobile marketing application platform  you should plan on paying initial, one-time, account setup and training fees as well.
• Connection aggregator fees will apply if you decide to go it alone and build out your own application logic and connect directly to a connection/messaging aggregator.  Connection aggregators are  companies that provide application players with messaging connectivity to mobile carriers.  A connection aggregator bind will cost you some thousands of dollars per month. You have to pay for any application logic extra by building it yourself or sourcing it from a third-party.  Note, the connection aggregator fees are typically included in the mobile marketing application provider platform fess (like iLoop Mobile’s). This is an added  benefit of working with an application provider over going it alone.
• Common Short Code leases,  if you’re going to run any text messaging mobile marketing programs you must lease one ore more common short codes (nearly every mobile marketing program–at least the good ones–use a short code as a core piece to the program).  You need to do this ahead of time (that is why it is listed in the upfront investment section) because it takes anywhere from 8~12 weeks to get a short code activated and certified for use and 4~6 weeks to get a new campaign certified on an already activated code.  You don’t need to get certification if the code has already been certified for a specific type of mobile marketing campaign.  You only need to do so  for new campaigns or if the campaign user flow changes.  To this end, short codes are a valuable asset to be nurtured.  In the United States, short code leases cost $500~$1,000/month and they are billed quarterly.  You may be able to rent a short code from your application provider or connection aggregator; however, they’ll probably charge you a similar fee.

Variable Mobile Marketing Program Cost Centers

Depending on who you’re working with you may be quoted a single number for your entire mobile marketing program, e.g. $25,000 + the traditional media and retail promotion and advertising fees, or you may get a breakdown of the variable costs. The following provides a list of the cost elements in the typical mobile marketing program.

• Program strategy development, all the activities needed to conceive of your campaign and layout the plan
• Creative concept development, all the design activities associated with your campaign
• Content licensing and/or creation, licensing fees or design fees for any content you may use for the campaign, e.g. images, ringtones, videos, news feeds, etc.
• Mobile marketing application/platform, the fees (that is if you’re not already licensing a platform or haven’t built it yourself) you’ll pay for hosting and reporting on you campaign during the entire period of your campaign
• Tactical execution of a program, including creative, program certifications (as needed), technical implementation on mobile marking application platform providers, legal costs (e.g. if you’re running a sweepstakes program, for example) and any custom non-recurring software development that may be needed to tailor the application(s) to your specific campaign requirements.
• Transactional items, messaging traffic (SMS, MMS, Email), Internet and mobile Internet page views, advertising page views/click throughs, content downloads, IVR Minutes, content royalties, images recognized, etc.
• Carrier specific charges, you’ll also want to double check if there are any carrier specific charges, for example uplifts on text messages or tariffs on promotional content downloads.
• Traditional media and retail channels, the fees for promoting the program in any traditional media channels

Here’s a hint, you can often reuse portions of the strategy, creative and any custom software and content development in one program for future programs.  If you keep this in mind, you can end up saving yourself quite a bit of money and time down the road as you role out new and derivative programs based on what you’ve already done in the past.

Getting to know the timelines

As for getting a mobile marketing program launched, while technically you can do it in a matter of minutes if you have the right application provider, you should realistically plan for it to take  12~15 weeks to get a new, typical, campaign launched.  The timeline will vary primarily due to  the management of short code activation and carrier certification requirements.  If you’re borrowing a code from an application provider that already has a program certified then the timelines can be much faster.  See the figure below for a typical launch schedule.

Concluding remarks

Mobile marketing is a fantastic practice that can be used to generate intimate, informative, entertaining two-way interactions with a person.  Mobile marketing programs have been show to have better brand recall, 3%, 6%, 9%, 20% and higher response rates depending on the nature of the program and the target audience.  It is a valuable practice, one that you can master, and very cost effectively–which is important especially given today’s financial times. Know is where to look.

Learn how to minimize the costs and maximize the value of your mobile marketing programs and you’ll be on your way to significantly contributing to your businesses bottom line through your use of mobile marketing.