Few major brands are as sophisticated in their use of the mobile channel as Coca-Cola. To date the company has embraced a wide variety of activities and mechanisms, including apps, games, high-performing SMS campaigns, and even a music download store. At the other end of the spectrum, Coca-Cola has also reported successful mobile commerce trials involving mobile phones and specially equipped vending machines.

Coca-Cola is also one of the first to actively embrace branded apps. In December 2010 it joined with the GSMA to sponsor the Brand App Challenge, a competition in which mobile app developers created “brand apps” for a select group of global consumer brands, including Coca-Cola, with its Coca-Cola, Coke Zero and Diet Coke brands.

While Coke has been quick to jump into branded apps, some recent reports question whether applications can deliver positive results across the board.

A survey of 781 adults in the U.S. conducted by EffectiveUI on behalf of Harris Interactive found the vast majority (76 percent) of mobile app users felt that all brand name companies and organizations should have mobile apps to make shopping or interacting with them easier. However, 38 percent of mobile application users revealed they were not satisfied with most of the apps currently available from their favorite brands. What’s more, 69 percent reported that a brand name mobile app that is not useful, helpful or easy to use, results in a negative perception about the brand.

“Mobile applications are the sure fire way to extend a brand,” Rebecca Flavin, CEO of EffectiveUI, said in a statement. “It’s time for organizations to understand how to fully leverage the mobile channel and optimize a user-centered approach to drive adoption, as well as reinforce and drive brand loyalty.”

What is the business value of branded apps? Which marketing approaches deliver the best results? How has Coke harnessed mobile to encourage brand engagement and deliver effective (even location-linked) mobile advertising? We ask Tom Daly, Coca-Cola Group Manager, Global Connections.

Q: Coca-Cola is a mover in the mobile space. Your company is a premium member of Mobile Marketing Association (MMA) and active in promoting the benefits of the mobile channel. Why is mobile so central to your strategy?

A: You need to first understand how we see mobile. For us it’s all about idea of making mobile an “enabler of desire”. Essentially, our mobile strategy was written some 70+ years ago, way before the first cellular connection was ever made. Back then it was about putting our brands “within arms’ reach of desire”. That sentiment was expressed by Robert Woodruff, who was our chairman. That was the way we defined the company’s role as a brand marketer, and as a partner to the bottling companies that manufacture and distribute our brands and our retail partners who carry our brands.

Our task is to create desire for the brands that we create. We have a choice: we can make the mobile phone and enabler of desire, or we can make it a barrier to desire. We chose to make mobile an enabler.

Q: Desire is the end-game – making consumers want to and be able to connect with your brands. What are the recent mobile activities you have pursued to achieve this goal?

A: We use all the mobile mechanisms available. Take simple SMS. We use SMS in a campaign that allows consumers to earn free airtime. They just purchase a Coke and text the code on the packaging to receive free airtime or free text messages. Teenagers, in particular, love our brands and love their phones, so it’s a natural marriage, if you will. It’s a great opportunity to leverage consumer desire for Coca-Cola and mobile.

For the World Cup we did a great program where we let consumers express their feelings about the brands using mobile. Consumers could upload videos of how they celebrated the goals. So this is a great expression of people’s passion and energy for football, which is their same energy and passion they have about Coca-Cola. We connected the two using mobile videos.

Q: One of your most successful campaigns has been Gimme Credit, which received an award from the MMA for its effectiveness and exemplary use of mobile. What can you tell me about the campaign and the key learnings?

A: Yes, that’s the campaign I mentioned that gives consumers free airtime. We have rolled it out in multiple markets and it’s been successful everywhere we’ve tried it. As a company we are testing and learning what works not in one market; but in many markets. We’ve learned that there are certain things that consumers everywhere want and Gimme Credit is success because people want free airtime and rewards for their purchases.

We’ve done something like Gimme Credit in India, the U.K. and Germany, and we’ve done it in tests in the U.S. as well. The challenge – and the opportunity – is how to get scale. The next step is to get the scale of The Coca-Cola Company and the scale of mobile technology aligned so we can really start building bigger, more broadly accessible programs. That way, by the time we get to events like the London Olympics or the next World Cup, we will have the ability to deploy these mobile campaigns on a much larger scale and on a much more global level.

Q: Gimme Credit is universally accepted, universally appreciated. But brands still have to have a local focus. What are the tensions or challenges of being a global brand and maintaining a local focus?

A: The challenge is to develop powerful core ideas for a campaign and then to localize the “art” of execution, while scaling the “science”.  One way we accomplish that is to empower a country to take the lead for certain global initiatives. For example this year’s [2010] Festive campaign is a global campaign with the digital –including mobile – led by teams in Germany. Whether you celebrate Hanukkah, or Kwanza, or Christmas, or have just celebrated Ramadan – it’s all about family and bringing people together. Coca-Cola is a part of that experience, but there’s enough that is similar to create common experiences around the world and across digital and mobile campaigns.  Broadly speaking, that’s the territory of the “big idea”. From there, we find ways to scale while at the same time enabling maximum flexibility for localization.

Q: Staying with the global push for a moment, how do you manage these, to drive global mobile services and marketing innovation at Coca-Cola?

A: It’s a disciplined process, as you might imagine. The key is to keep a clear understanding of the roll out and who is doing what. So, we may have a single lead agency for mobile, a company that is doing work at the center. The work they do and the deliverables they are responsible for are clearly defined. There may be a transition to a local agency that has the latitude to take a hand- off related to certain core ideas and assets.

We have elements that can be reused across geographies. It’s back to the idea of scaling the science and localizing is the art. Underlying it all, from a technical point of view, are well documented standards and processes.

Q: You are sharply focused on mobile and it is listed as a line item in your budget, which is quite a statement. Could you quantify for me the opportunity in mobile for Coca-Cola?

A: I can certainly share are a couple of data points with you. We serve our products 1.6 billion times a day, which means that 1.6 billion servings of Coca Cola are poured every day.  There are five billion mobile subscribers worldwide. Do the math and there is a lot of opportunity to use mobile to reach these consumers. And again, when you think that our core strategy is about enabling desire for our brands, then there is also opportunity to use mobile to reach and retain many of the five billion consumers who have mobile and may not currently drink Coke, for example.

Mobile is a line item in the budget. Mobile is included because we know we need to manage and understand mobile. Most importantly, we can not treat mobile as a standalone activity. We know that mobile works best when incorporated in a larger marketing context. So, to help us understand the optimal mix, we’re keeping track of it along with other line items. I can’t share the precise trajectory, but it wouldn’t surprise anyone to know that mobile is growing.

Download the updated Netsize Guide 2010 to read the rest of this interview.

Drawing from a survey of 1,000+ mobile professionals and practitioners across 67 countries, the report concludes that credit card billing is by no means the way to reach a large and global audience.

The survey found that 85 percent of respondents indicated that operator billing is a key enabler, 39 percent also included credit cards in the mix. A me-too application storefront modeled on the Apple blueprint is not enough.

Payment methods with greatest growth of importance in next five years

The increasing importance of mobile billing schemes relative to credit cards concurs with the findings of Edgar Dunn & Company 2009 Global Payment Trends Survey.

Payment professionals indicated that contactless cards, remote mobile payments and, to a lesser extent, prepaid card products will gain the most importance in the coming 5 years. See chart 1.

In another study, Edgar Dunn & Company identified younger consumers (18 to 30 years old) as the most interested in such alternative payment products, followed by eBay sellers, convenience seekers, and users without access to credit. See chart 2.

Which customer segment is more receptive to alternative payment products

In its 2009 annual report eBay noted that in 2009, more
than $600 million worth of sales were transacted through its mobile applications.

The success of mobile payments relies on speed, convenience and trustworthiness. These are the key enablers “sine qua non”.

Merchants will not implement a new payment mechanism if implementation costs are high, consumer awareness is low and it carries risks of chargebacks, according to the same report.

The good news is that around the world the industry – meaning, mobile network operators, financial institutions, industry regulators and government bodies – are collaborating to ensure that mobile payments will be just that: upright, unfailing and ubiquitous, and a solid alternative to established online payment methods.

Payforit in the United Kingdom is a striking example of a payment method that has made the leap forward from a mobile web-only scheme to the Internet and mobile web at large – be it in the UK, for now.

Online stores and retailers, whether selling “just apps” or more, should look beyond the card.

Referenced reports:

Every month some 10 new application stores are opening up shop. To date at least 75 app stores are live globally, ranging in size from large (over 200,000 apps in store) to small (just a few hundreds of apps).

The big questions that app stores and app developers are currently facing is how to build a commercially successful business and what are the winning business models.

In its whitepaper “A World of Apps”, Juniper Research estimates the global market for apps to grow to $32 billion in 2015.

“Application Store Billing”, a report by Netsize published May 2010, analyses the wave of recent app store developments and shows providers will need to develop much more than a me-too application storefront modeled on the Apple blueprint.

The report, containing an overview of the top-52 application stores, is available as free download from www.netsize.com.

Mobile World Congress, Barcelona, February 15, 2010
Netsize, the leading communications and commerce enabler, today launch Netsize Direct Billing, the unique managed Direct Billing solution for Mobile Network Operators.

Direct Billing is a billing method that charges mobile payment amounts directly to the end user’s mobile phone subscription. It does not require intermediate WAP pages or premium SMS.

Netsize Direct Billing provides mobile operators with a direct billing solution that integrates seamlessly with their billing platform. It is provided as a fully managed service that minimizes the mobile operator’s time and resources that would be required to deploy a direct billing offer. In addition Netsize provide a direct billing API that enables third parties to launch mobile commerce services.

“As a relatively new billing method, Direct Billing delivers operators tremendous benefits for launching mobile commerce services, including ticketing and money transfer,” says Stanislas Chesnais, Chief Executive Officer, Netsize. “We estimate that operators would need a year to launch an in-house developed direct billing offer. Netsize Direct Billing shortens their time-to-market significantly to a few weeks, enabling the operator to catch the mobile commerce wave now.”

“Netsize Direct Billing is the first offer that springs from the Gemalto investment in Netsize,” says Jean-François Schreiber, Senior Vice President, Telecom Solutions and Services, Gemalto. “Gemalto’s worldwide presence enables Netsize to venture into new regions and provide operator groups with a common global platform.”

Netsize provide operator direct billing solutions to most of the large mobile device vendors for their application stores. Netsize is global leader for third party direct billing.

Netsize present Direct Billing at Mobile World Congress, Barcelona, Spain, 15-18 February 2010, at stand 2.G51 in Hall 2.

Netsize, a leading mobile commerce and communications enabler, today revealed the first results of the Mobile Trends Survey 2010. Drawing from an online survey of 1,000+ professionals and practitioners, the survey provides insights into key trends that top the industry agenda, including the advance of mobile applications stores, progress towards global mobile commerce and the pivotal importance of mobile as a means to bridge our virtual and physical worlds.

Using the occasion of M-Days – one of Europe’s biggest mobile industry events and exhibitions held in Munich, Germany – Netsize provided conference attendees, industry influencers and key bloggers a sneak peek into the controversial survey results, starting with respondents’ views on app store leaders and the enablers that give them and their offers the competitive edge.

According to the survey, the vast majority (87 percent) of respondents believe the Apple App Store will be the most successful app store in the mobile space. Google’s Android Market is a distant second (60 percent), followed by Nokia’s Ovi Store (30 percent) and RIM’s BlackBerry App World (27 percent). Surprisingly, applications stores run by mobile operators finished low in the list, indicating that platform providers and handset makers may well dominate the space for a time to come.

When asked to rate the unique selling proposition of application stores over other software distribution and sales channels, 65 percent of respondents put convenience (“everything in one place”) at the top of the list. This was followed by compatibility “software applications specific to the device”), choice (“a long tail of thousands of applications to choose from”), and ease of payment (“operator billing, for example”).

Netsize, provider of operator billing solutions to most of the large mobile device vendors for their application stores, released the application store survey findings to the stage for a lively discussion of the future of mobile and the role of software application stores during “Mobile Trends 2020, Mobile Research and App-Commerce: What Comes Next in Europe?” The M-Days session was led and moderated by Peggy Anne Salz, mobile thought leader and MSearchGroove Founder and Chief Analyst.

The complete mobile trends survey results – which cover topics related to mobile entertainment, mobile marketing, mobile commerce, mobile payments and mobile convergence – will be released as part of the Netsize Guide 2010, a comprehensive mobile industry analysis and almanac published by Netsize and written by MSearchGroove’s Salz. Netsize will launch the Netsize Guide 2010 on February 16, 2010 at Mobile World Congress in Barcelona, Spain.

Netsize Smart Application Billing enables Application Stores to use operator based billing to charge for application downloads and usage, and permits charging from the mobile application itself.

“Reaching the largest consumer audience and making it easy to buy content are the key success factors for Application Stores. With Smart Application Billing they reach 1.3 billion consumers globally, and consumers can conveniently purchase applications and application extensions via their mobile operator phone bill in both Pay per Use and Subscription business models,” says Stanislas Chesnais, Chairman and CEO, Netsize.

“Our Application Store customers observe an increase of their revenues by 400% as soon as they add operator based billing. Having an alternative for credit card billing clearly removes an obstacle in the purchasing process.” He adds, “On Application Store visits that use a mobile device over a Wi-Fi connection we record a 30% increase in payment transactions. It proves the business case for operator based billing as a successful internet payment method.”

Smart Application Billing uniquely combines three operator based billing methods: Direct Operator Billing, Premium SMS Messaging, and WAP Billing. Depending on the characteristics of the consumer’s network operator Smart Application Billing dynamically proposes the preferred billing method to the application. Direct Operator Billing and Premium Messaging allow the user to make the payment while remaining in the application. WAP Billing is used when the other methods are not available. The user makes the payment outside of the application on a mobile internet payment page.

Direct Operator Billing is the billing method where an installed application on a mobile handset initiates a billing transaction via Netsize directly to the user’s mobile network operator.

Netsize is the delivering operator billing solutions to some of the largest Application Stores. Sony Ericsson has chosen Netsize mPayment for PlayNow™ arena to cover multiple countries in Europe.