How to Budget Your Mobile Efforts

By Michael Becker

Said on the Web

"Was 2010 The Year of Mobile? We know the last 3 years have been dubbed the "year of the mobile (internet)" — but for mobile commerce, maybe 2010 really was it. Or, at least it made significant strides."
Linda Bustos, Get Elastic Ecommerce Blog, Jan. 12

"Choose to integrate, choose to innovate. Not many have the resources to do both."
Tweeted by @minethatdata, Jan. 12

"Maybe engagement isn't critical to getting into the inbox, but it's increasingly important to making it into the "important/must-read part."
Chad White, Retail Email Blog, Jan. 7

"While ecommerce is growing rapidly the fact of the matter is most of your site visitors have never bought from you. Building confidence in these visitors  is key."
Rishi Rawat, Better Retail blog, Jan. 3

"Understanding the concept of social graphs will not only enhance your proficiency with social media marketing today, it will also help you foresee emerging trends. This will significantly help you be fully prepared when new web technologies are launched."
Jeff Korhan, Social Media Explorer blog, Jan. 7

Q: "What would you consider a good budget for a mobile launch? Our company is working right now on its 2011 planning, and we're aggressively moving on our mobile efforts — making our sites mobile internet usage friendly. We're looking at launching an application similar to Facebook and Yelp, but need to understand the cost behind the marketing." — Alicia Ward, director of marketing and content,  NaturallyCurly.com and CurlStylist.com

A: There are multiple factors to consider when budgeting your mobile efforts:

Up-Front Costs
There are four up-front cost centers. They include the following:

The training of the people who will develop and execute your campaign.
Mobile marketing platform and application licenses, whose fees range between a few hundred to a few thousand dollars per month. Expect to pay a one-time account setup and training fee, too.
Connection aggregator fees apply if you build your own application logic and connect directly to a connection/messaging aggregator, which is a company that provides application players with messaging connectivity to mobile carriers. A connection aggregator bind costs thousands of dollars per month, and doesn't include any extra application logic if you're building it yourself or sourcing it from a third party. On the plus side, connection aggregator fees are typically included in the mobile marketing application provider platform fees. This is an added benefit of working with an application provider over going it alone.
Common short code (CSC) leases are required for campaigns that use SMS or MMS. In the U.S., each CSC lease runs $500 to $1,000/month. It's possible to rent a CSC from an application provider or connection aggregator, but the fee will probably be about the same.

Variable Costs
Regardless of whether the bid is a flat fee or has a cost breakdown, a campaign's variable costs typically include the following:

program strategy development, which is all of the activities required to conceive and lay out your campaign;
creative concept development, which spans all design activities;
content licensing and/or content creation;
mobile marketing application/platform fees for hosting and reporting;
tactical execution, including creative, program certifications (as needed), technical implementation and testing on mobile marketing application platform providers, legal costs (e.g., for conducting a sweepstakes), and any custom, nonrecurring software development upgrades needed to tailor the application(s) to your specific campaign  requirements;
transactional items, including messaging traffic, page views, advertising page views/clickthroughs, content downloads, IVR minutes, content royalties and images recognized;
carrier-specific charges, which could include uplifts on SMS text messages or tariffs on promotional content downloads; and
any campaign promotions in traditional media and retail channels.

Michael Becker is the North America managing director for the Mobile Marketing Association. Michael can be reached at michael.becker@mmaglobal.com.