Derek Handley wants a word in your ear

New Zealand’s mobile-phone marketers are getting international traction—but they’re held back at home.

New Zealand’s mobile-phone marketers are getting international traction—but they’re held back at home

Magazine layout

Derek Handley photographed by Amanda Friedman

Eight years ago nothing much was happening in mobile gadgets: the cutting edge was a ringtone with a tune. But there were those who could see past the unprepossessing mobile landscape.

“The Internet was taking off but you could see that mobile was going to be much more powerful as a one-to-one device, because it could be everywhere,” says Derek Handley, co-founder of The Hyperfactory. “Now, mobile is the remote control to people’s lives.” These days The Hyperfactory claims to be the most awarded mobile marketing company on the planet, with an awards cabinet that includes gongs from the AdWeek Buzz Awards, OMMA Awards, Mobile Marketing Association and the Asia Pacific Digital Media Awards.

The company’s international HQ remains in Auckland but it has a growing empire, with offices in New York, LA, Chicago, Shanghai, Hong Kong and Hyderabad. It seems hard to imagine what sort of ‘next step’ there could be for a company that has the trust—and advertising dollars—of global brands like Coca-Cola, adidas, Vodafone and Toyota, but late in 2007 The Hyperfactory made its move. With the backing of seriously influential investors including 42 Below’s Geoff Ross and Rich Frank, former chairman of Walt Disney Studios and Paramount Studios, the company launched a mobile entertainment division to support record labels, film and TV studios and media companies.

The use of mobile in the entertainment industry has so far revolved around selling content but its marketing potential has been largely ignored, says Handley. “As a marketing mechanism, mobile has huge power for TV. If you want to promote your new show you might have a little site where your audience can check the schedule and download the previews. For music similarly there’s huge power for marketing and revenue generation, such as ‘mobile fan clubs’—keeping in touch with favourite bands, getting them to send you videos of what they just did a couple of hours ago and texting you where they just were.”

Although the desire to pay for content hasn’t always matched the voracious appetite for mobile goodies, Handley says brand-supported content is the way forward. “So we’ve got all the Cokes and brands of this world, now we’re going to connect them up with entertainment. We can bridge the gap and provide entertainment content for brands who want to be associated with it and we can provide the entertainment companies with brands who can help pay for it.”

Run The Red co-founder Ben Northrop agrees that brand-sponsored content is high on consumer wish lists, but says many brands—and the agencies that work with them—are only now realising the power of mobile marketing.

The statistics back him up. Despite big brand buy-in and the obvious charms of a ubiquitous, permission-based, one-to-one communication channel, mobile marketing has yet to make a real dent in the global advertising spend, commanding less than one percent of the US$1 trillion pool.

From its Wellington and Auckland offices, Run The Red has created mobile campaigns for the likes of Telecom, BP, Fairfax and Optus, attracting tens of thousands of users and hundreds of thousands of text messages, but the real buy-in from agencies and brands has come only in the last six months. “It’s gone from a nice-to-have gimmick to part of their overall strategy,” says Northrop.

The biggest issue stifling creativity in mobile campaigns and services is New Zealand’s excessive data rates

Part of the shift, he says, is because mobile marketing can be measured. “It’s the medium that can keep the others honest. A simple call to action, like an SMS code in a print or TV campaign, will tell advertisers whether they are getting any buy-in and because it’s real-time they have the opportunity to fine-tune campaigns if they’re not working.”

But in New Zealand, there’s a hitch. Despite advertisers showing their appreciation for what mobile marketing can do, Northrop says the local market is being held back by the cost of connecting. “The biggest issue stifling creativity around mobile campaigns and services in New Zealand is the excessive mobile data rates. On top of that, New Zealand’s relatively small population doesn’t offer the same economies of scale and there are lower revenue shares too, which means the set-up and license fees for campaigns have to be higher to make up for it.

“The upshot is that local clients don’t make use of the potential of mobile Internet. We aren’t seeing off-net mobile sites being developed and MMS [multimedia messaging service] messages can’t be sent to a short code yet either.”

Working with Sydney agency Mark, Run The Red recently created a ‘Fame or Shame’ campaign for Optus Australia which saw participants sending photos to a short code which were then uploaded to a central site and given ratings by other participants. Mark’s managing director, David Whittle, says the project is a fine example of a campaign successfully meeting the challenge facing the advertising industry—the need to create media to communicate an idea, rather than simply buying media.

For Optus, the campaign encouraged customers to make use of its MMS service, increasing data revenues and attracting thousands of entries and more than 180,000 votes—but, Northrop says, it won’t be replicated in New Zealand until data rates and MMS issues are resolved.

“We need to see capped mobile data plans if we want to replicate Internet experiences on mobile.”

Still, he’s predicting good things based on the “global momentum” around mobile marketing. Run The Red has just opened a new office in Brazil and signed an agreement with the mobile advertising division of Nokia to act as the New Zealand reseller.

“Some people are still getting their heads around what can be done with mobile, but when you think about it, it’s one medium with three billion users.” Enough said.

Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).