Building destination brands for D2C success

The big issue with Direct to Consumer mobile content retailing has been and continues to be the problem of getting enough consumers to find your service. Print and TV advertising are the most popular above the line marketing channels used world over. Some players with deep pockets managed to build pure play mobile media brands, mainly in Europe. Jamba/Jamster, Zingy and the Mob stand out here. However, a vast majority of players who saw D2C mobile retailing as a quick and easy way to make big bucks have met with varying degrees of failure. The high cost of customer acquisition, lack of ability to retain a customer without sneaky underhand “crazy frog” like methods, inability to differentiate and low margins due to too many players in the food chain, unsupportive operator policies have all been responsible for this.

I personally have been in involved in D2C services across several geographies for different types of mobile content and themes. Above the line marketing, integrated with movie releases or TV shows campaigns, or standalone print and TV campaigns, have not really set the cash registers jangling. Even with better messaging, targeted ads, clever merchandizing (value bundles, etc), the response has only marginally increased. Even Europe, with all the D2C hype I’ve heard over the years, seems to be operator portal dominated in reality, more so for mobile games.

So with the wisdom of failure backing me, a few ideas are beginning to emerge about how the mobile D2C space will evolve:

1. Merely running a short term ad campaign on the TV or in a magazine and expecting thousands of people to buy your stuff will simply not happen. Nobody remembers a shortcode even 5 minutes after they’ve seen or read the ad, leave alone the keyword or URL.

It really is about a long haul brand building campaign. Isolated mobile only strategies are unlikely to succeeed. Media brands need to build “destinations” with mobile content strategies integrated with overall digital media plans and provide the consumer access to multiple consumption channels. These “destinations” are more likely to be integrated web and mobile brands rather than stand alone mobile brands.

2. Big media companies with deep pockets have the best chances. The mom and pop content kiosks and the medium sized short term players may make their pennies, but can hardly expect to survive in the long run.
A News Corp and Viacom through their multiple media destinations or an MSN and Yahoo through their strong web destination brands are more likely to be the mobile D2C dominators rather than the first generation players like the Mob or Zingy. Evidence that the world is moving towards this comes from the recent NewsCorp acquisition of Jamster.

4. In India, Indiatimes got the dynamics right from the beginning. Their shortcode 8888 is probably the only genuine mobile “destination brand” in India. Web and print properties have been exploited brilliantly to create an integrated destination for mobile content. Yahoo mobile in India is trying to get there and should, given their deep pockets and captive web user base.

In a recent meeting I had with the world’s biggest game publisher, they emphasized that their strategy for D2C was to build “destinations” for mobile content around two of their biggest game franchise brands. The discussion we had validated my own thoughts on D2C.

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About Deepak
Venture Capital and M&A advisor, Entrepreneur, Startup enthusiast..

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