opinion


Driving force

BMW has a reputation for implementing some of the most advanced technology in the automotive industry but also breaks new ground in marketing

Premium motoring brand BMW was one of the first companies to pull the mobile channel into its marketing mix. Here the firm’s head of digital media, who is personally responsible for many of the firm’s marketing innovations, talks to telecoms.com about why mobile works for BMW and how.

German auto manufacturer BMW has a reputation for developing and implementing some of the most advanced technology in the automotive industry. And just as it has teams dedicated to innovation in motoring, so it strives, according to Marc Mielau, the BMW Group’s head of digital media, to break new ground in its marketing strategy. Chief among the innovations here is the developing use of the mobile channel.

BMW has been using mobile in its marketing mix for more than five years, Mielau says, and it first turned to the medium in a bid to stimulate awareness and extend its reach at the youngest end of its addressable market. In 2004 BMW launched a new small car, the 1 Series, in a bid to gain traction in a new demographic. “It was the ‘youngest’ car in the BMW portfolio,” Mielau says, and it offered his team, “a big chance to conquer young people through the mobile channel.”

In some markets BMW launched a handset in conjunction with Nokia that came with preloaded 1 Series content. In others the firm made available a downloadable racing game featuring the new car, which could be configured in different colours and with different wheels. “It enabled people to get a feeling for the car,” Mielau says. “The 1 Series looked like a BMW from the front but, unusually for a BMW, it had a hatchback. So the game was configured to show the car from behind. It was important that people could see the back of the car. We got 75,000 downloads which—at that time—was an amazing success,” he says.

Over the following five years, BMW has greatly expanded the range of ways in which it is able to exploit the mobile channel. But straight advertising is not one of them. “Our philosophy is that we’re more interested in delivering value to the customer,” Mielau says, “and advertising is not value.” While advertising has progressed inexorably from print, through radio and television to the internet, he says, the migration to mobile is not necessarily a logical one. He talks of the “unique capabilities” of mobile—specifically location-awareness and situational usage—and how these will enable his firm to “show people that we’re serious when we talk about customer orientation.”

So the BMW mobile marketing strategy is based on what Mielau calls the ‘save time/kill time paradigm’. People appreciate objects or applications that save them time when they’re busy, or help them pass it when they have it in surplus, the thinking runs. And if customers perceive content as useful, the marketing is likely to be all the more persuasive.

In this way, BMW can use mobile to a variety of ends; to build loyalty among existing customers, to grow awareness in new market segments or to drive after-sales revenues. The most successful mobile campaign the firm has ever carried out, Mielau reveals, stimulated a sales response—that’s to say a purchase—from more than 30 per cent of recipients.

By German law, everyone who buys a new car between May and September has to have fitted winter tyres by the end of November, when the winter snows usually start to fall. Mielau’s team took a sample of customers for whom they had mobile phone data and sent them an MMS featuring an image of their specific car, remind them that they needed to fit winter tyres. Customers also had the opportunity to download an application that allowed them to configure different tyres and rims with their car model to see which ones they wanted. They could then click to call a dealer to make an order or send an SMS asking the dealer to call them.

“We saved time for our customers there by managing the whole process,” says Mielau. “We sent the MMS out just as the snow started, which is better than a mailing, which is always two weeks too early, or two weeks too late. After the winter season we matched the data and found that 30 per cent of people who got the MMS then purchased the tyre through the message. Most of them would have purchased one anyway but we made it much more convenient. We wanted to roll this out to more of our customers but we didn’t have enough mobile data from customers. So the CRM department is currently working to build that data up.”

BMW targets the handsets most likely owned by its target demographic

BMW targets the mobile handsets most likely owned by its target demographic

On the awareness side a recent campaign was based on a television advert for the BMW Z4 that sees the car being driven round a massive canvas, spreading coloured paint to create an abstract image. While this was a straight advert on television, the BMW marketing philosophy dictated that it could not be given the same treatment in the mobile channel. So it became a game; a game that was downloaded one million times in four weeks, Mielau reveals.

Advancements in handset technology are key to the increased use of mobile as a marketing channel for big brands and—as so often seems to be the case now—the iPhone is credited with opening up a new world of possibility. BMW is a premium brand and so one would expect that its mobile marketing strategy would be directed towards consumers of other premium brands; namely those who own and use higher-end smartphones. Mielau points out that the firm simply cannot deliver its marketing content to all available handsets. Rather it aims to find the 20 per cent of models that are most likely to be owned by its target demographic and optimises its content for those handsets.

Nonetheless, Mielau is adamant that the mobile channel can be useful in the market mix for any brand, regardless of its place on the value scale from budget up to premium. Returning to his core theme he says: “You could be a not-for-profit organisation, you could be a low-cost supermarket or you could be a premium brand. So long as you treat the mobile channel as a service channel rather than an advertising channel, you can add lots of value.”

More to the point the mobile channel is comparatively cheap to use. It is for this reason, he reveals, that the question he is most frequently asked by people interested in his mobile strategy—what proportion of his marketing budget does he allocate to mobile—does not necessarily provide an accurate split of the mix.

“The online channel overall is much cheaper and more efficient than the classic channel,” he says, “because you don’t have the high media spends. You can do more with less. So when you take the portion of the money you spend on the mobile channel, it’s very low—maybe one or two per cent at most. But because of the value that it delivers, it’s absolutely fine when you spend a low amount of money on it,” he says. Taken as a portion of overall marketing format, he says, mobile is increasing due to its efficiency.

The example he gives relates to sales literature for the firm’s cars. Prospective buyers can pick up hard copy brochures in dealerships or be sent them in the post. But if a car in a showroom has a bar code that can be scanned with a mobile, audio visual content can be streamed or downloaded to the handset that gives  a far richer demonstration of the technology that the car contains. And, as he says, “I do not need much money to do that.”

Mielau also doesn’t appear to believe that BMW particularly needs the mobile operators. His reasoning is familiar; working in partnership with an operator may reap certain rewards but reach—one of the fundamentals of established marketing and advertising strategies—is seriously hindered by exclusivity. “The operators are definitely interested in working with us,” Mielau says, “but we don’t want to limit the potential of our applications. So the operator business is not really a focus for us, although it can be interesting when they’re able to deliver more than just demographic data.”

That BMW will continue to innovate in its core business of automotive technology cannot be in question. It will be interesting to see if it continues to apply the same philosophy to its use of mobile marketing.

Check back this week for related features on Lufthansa and the BBC


One comment

  1. iPhone App Developer 02/10/2009 @ 10:58 am

    “You could be a not-for-profit organisation, you could be a low-cost supermarket or you could be a premium brand. So long as you treat the mobile channel as a service channel rather than an advertising channel, you can add lots of value.”
    Some of the wisest words I’ve heard said about mobile marketing.

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