Nearly 1 in 4 U.S consumers use mobile LBS – even more impressive, 63% of iPhone owners use it at least once a week. This surge in mobile location services has led brands like Domino’s and American Eagle Outfitters to stand up and take notice.

Domino’s has partnered with Izea’s WeReward (available at more than 15MM businesses) in order to propel discovery of specific locations, to build a deeper relationship with loyal customers, and to make the brand viral. Users find a location or business and check-in via the WeReward app. Upon check-in they are sent directions on how to earn points. All points are worth .01₵ and can be turned into cash via PayPal. In Domino’s case, users earn points by taking a picture of their Domino’s pizza box, making sure the receipt is visible. The app is also integrated into Facebook, Twitter, Foursquare, Yelp, Google and Citysearch, so users can also unlock badges and share their experiences. The goal is to provide an incentive that’s fun and profitable for the user, but it benefits all parties because the advertiser can set their own price, giving them flexibility while decreasing risk.

Shopkick is equally as compelling for retailers – users open the Shopkick app and simply walk into a store! Their unique technology ‘communicates’ with consumer’s phones recognizing their presence, so there’s no ‘fake check-ins.’ Users immediately get ‘kickbucks’ just for walking in the store, but they can earn more for taking further in-store actions such as trying on clothes or scanning the barcodes on specific articles of clothing. The app, in conjunction with the retailer, also offers special discounts and deals. ‘Kickbucks’ can be turned in for Facebook credits, gift certificates or users can even donate the money they’ve earned to their favorite causes.

We will see more and more retailers jumping on the mobile LBS bandwagon, but it seems as though applications like WeReward and Shopkick have developed win-win programs for consumers and brands alike. They drive in-store traffic and sales conversations while creating a ‘coolness’ factor for users who are ‘in the know’!

So here are five recent dynamics that every marketing professional needs to stay on top of:

• Apple announces big news
  • The launch of the iPhone 4, iOS 4 and the iAd platform are all intertwined and add up to significant news for Apple and the mobile industry. The iPhone 4, available June 24, will not be revolutionary, but is absolutely a significant step in Apple’s evolution, and its key benefit will allow marketers to add rich media and video – at scale– in their mobile marketing communication. The new iOS software allows consumers to interact with brands in a deep and meaningful way without ever leaving an app. As a result, the ad itself will now be as important (if not more important) as a branded application.
  • The new iAd platform also caught marketers by surprise as many scoffed when Steve Jobs said that the starting price to play was $1mm. But after less than two months, Apple tallied $60mm in advertising commitments from intrepid brands like Target, Geico, Nissan, Citibank and Disney to name just a few. The Nissan Leaf communication is particularly compelling and true to Steve Job’s vision, the new ad platform allows brands to tell cohesive and powerful stories. The iAds will start to roll out on 7/1.

• The mobile wars continue to get volatile
  • The Google purchase of AdMob and Apple purchase of Quattro was just the opening salvo in the battle between these two Silicon Valley behemoths in the small but fast growing mobile ad market. Google blasted Apple last Thursday for imposing new rules on developers that bar rivals from selling ads inside the iPhone and iPad. Apple recently amended their rules to prohibit developers from sharing data from  iPhone apps with some companies and thus preventing AdMob from targeting ads giving their iAd platform a huge advantage.

• 4G becomes a reality
  • With the launch of the Sprint HTC Evo the next wave of mobile computing has emerged and make no mistake about it, this is a big deal. 4G mobile will be as important for brands and consumers as the shift from dial up to broadband. 4G will be 10x faster than 3G and there were actual lines at Sprint stores for the Evo as Sprint underestimated demand for the new phone. The Evo represents the most phones sold in one day in Sprint history. More than anything else, 4G will be a catalyst for video consumption on smartphones.

• M-Commerce starting to gain traction
  • As more consumers browse and shop via mobile devices and mobile geo apps like Foursquare and Gowalla continue to increase in scale, M-commerce will accelerate and big marketers like Home Depot, Lilly Pulitzer, Armani and 1-800-Flowers are finally starting to pay attention to its potential. Shoppers will order $2.2B in merchandise from mobile this year up over $1B from last year and as a result about 30% of retailers now have mobile commerce web sites.

• AT&T eliminates unlimited data plan
  • Many marketers and app developers are extremely nervous that just as the mobile market is poised to take off AT&T’s new “pay as you use” model will put a major crimp in consumers’ appetite for rich mobile content. Only time will tell, but if consumers start to think about “how big a file is” and if it’s worth it to download, the nascent but growing medium will be hindered.

In the span of three short weeks mobile has grabbed the headlines in the majority of marketing press and I have a feeling that this is just the beginning. Although the platform garners less than a $1B (estimated $593MM in 2010) in ad spend, the sky is the limit for a platform that combines interaction, emotion and personalization. Any big trends that should be added to the above?

Mullen’s mediahub has just added to the seemingly insane number of mobile apps with the launch of “Expedition Timberland,” a branded app for the iPhone/iTouch (went live on 9/10) and for the Blackberry Curve, Storm, Bold and Pearl  (goes live on 9/21). We got into the branded mobile app game with eyes wide open. We know that:

• There are more than 100,000 mobile apps currently in circulation
• <1% have long-term usage
• Only approximately 20% of consumers go back to an app after an initial download and usage

Sounds like a lot of trees falling in the forest with no one listening. Well, Timberland is all about sustainability so we tried to give them an app that will last.

While other outdoor brands have dabbled in the app space, we built something that connects casual city-dwelling lifestyles with a passion for the outdoors. “Expedition Timberland” (developed with Ansible) has city guides for hiking, biking, secret spots for relaxing and the best city views. There’s a game called “Timber Trail;” a music component; a gear section; a WAP site with a full product catalog, click-to-call functionality and store locators.

So we built a cool app. That’s not enough. Did I mention there are 66,000 apps out there? Just because you build it, doesn’t mean they will come. Loyalty in mobile is extremely fleeting. If you’re going to do it, you have to build a compelling and engaging experience. You have to give the consumer a voice in shaping the experience. And, most importantly, you have to promote it. To that end, Timberland is putting significant money into mobile media support including ads on Quattro and Jump-Tap, as well as in-store point-of-purchase advertising, dedicated email, direct mail and support on timberland.com.

The customized app is launching in six cities – NYC, LA, Chicago, Boston, Minneapolis and Denver. We’re letting people vote on which cities it rolls into next.

And how will we measure success? Downloads, time spent with the application, unique and repeat users, use over time, measurement of mobile media (CTRs etc), AppStore ratings, and click to call usages (sales). We’ll be using Pinch Media for iPhone analytics.

We’re hoping to crack the code on breakthrough branded apps. Please download it and tell us what you think.

So how do you get started? There are several things marketers need to think about when they enter this space. The first is to decide whether you are going to go the core gaming route or the casual gaming route. Both are huge, but reach entirely different audiences. Core games are predominantly men 12-35 and casual gamers – most played on a PC or Mac vs. console – are women over 40. For this piece, I am going to focus on core gaming and there are three main console platforms and three main advertising opportunities.

Platforms

• Xbox 360: Microsoft’s gaming platform, 11.6 mm units sold in the US, 17 mm Xbox live accounts, ads sold through Massive gaming, Project Natal coming out later this year to take on Wii
• Playstation 3: Sony’s gaming platform, 5.7 mm sold in US, Blu-Ray is a key feature, ads sold through IGA and Double Fusion
• Wii: Nintendo’s gaming platform, 19 mm units sold, more casual game play, only static in-game opportunities
• Other platforms include hand-helds and the two major devices are Nintendo DS and PSP

Advertising opportunities

• Static in-game advertising: The strength of in-game ads are that they are hard coded into the game which allows for deeper integration and your brand lives in perpetuity. The con is that there is a fairly long lead time (8-12 months) and the cost will most likely be north of $200K as an entry point.
• Dynamic in-game advertising: The greatest strengths are flexibility, cost, speed to market and the most advanced ad platform is Massive which is aligned with Microsoft. As soon as an Xbox owner connects his console to the web, Massive dynamically serves ads that cover up generic brands and ads will appear on billboards, vending machines and at sports venues. Massive offers over 60 titles and marketers can target by creative, time & day and geography. Dynamic in-game advertising is a great way to jump into the gaming market.
• Advergaming: The benefit is simple, imagine someone paying to get your ads. This is exactly what Burger King did when they launched three Xbox games for $3.99. BK created Big Bumpin, PocketBike Racer and Sneak King and sold millions of copies.  However, this strategy is not for the faint of heart as the lead time is somewhere around 18 months and the price tag is in the seven figures.

In conclusion, gaming may or not may be right for your brand, but it is a great opportunity to stand out, connect with your audience and most importantly, become part of their everyday life – because gaming isn’t just a medium, it’s a lifestyle.

Three Key Steps:

1.     Determine how much of your audience is using mobile beyond voice

• If your audience is using their phone to primarily dial a seven digit number, you don’t need to me to tell you mobile advertising is not right for your brand. A good guide is to adhere to a recent Insight Express study where they divided the mobile population into three groups:
  • Mobile Pioneers (15%): the smart phone power users have three core characteristics: the first sub segment is they tend to be young (18-34) and skew male and the second sub segment is they have high household incomes. As an example, the iPhone has a 200 index with those making more than $100K+. Lastly, they tend to live in major metropolitan markets.
  • Mobile Wannabes (25%): starting to buy smart phones and if the Pioneers provide traction, the Wannabes provide scale.
  • Mobile Traditionalists (65%): 2/3 are over 35

If your brand has confirmed that your target is using mobile beyond voice, now you’re ready to advance to steps two and three…

2.       Determine which device/carrier your audience is using

• The executive is on the Blackberry, moms may be using the Palm Treo and if your target has a high ethnic concentration, look at T-Mobile’s Android. And always consider the iPhone platform as their users have the most voracious appetite of data vis-a-vis all other smart phones.

3.  Interpret the role of your brand in the medium

• The key to mobile is creating a wonderful and delightful experience. Take advantage of the channels inherent strengths and tailor the experience around the mobility of the phone. Starbucks is doing a great job helping their ardent fans find the nearest Starbucks with their own app (Bucksme) and marketing on the Where mobile app. We have recently launched an app for Stanley and are building several others for some of our major clients.

So there you are, if your target are young men or white collar & affluent, get started. The last thing you want to do is let your competitive set beat you to the punch in this emerging and powerful medium.

What do you think? Are there any other important rules to think about before the process begins?