Like cloud computing, mobile marketing is hot and will only get hotter – meaning investors should take a closer look at mobile marketing stocks like Motricity (NASDAQ: MOTR), Velti Plc (NASDAQ: VELT), MDC Partners (NASDAQ: MDCA), Augme Technologies (OTC: AUGT) and CommerceTel Corporation (OTC: MFON).
What is Mobile Marketing?
Mobile marketing can best be described as the use of any piece of mobile technology for the purposes of marketing communication. Given that mobile phone penetration rates in many countries are fast approaching the 100% level, just consider some of the following mobile marketing facts and statistics:
- According to the Digital Marketing Blog, an SMS message will (on average) be read within four minutes – meaning that SMS messages are considered to be a highly convertible form of advertising and marketing.
- In fact, a former Target executive at the Mobile Marketing Forum 2011 said the company saw 250,000 consumer engagements and a total engagement rate of 18% after running a mobile circular campaign for the back-to-school season. Moreover, roughly 60,000 consumers were spending over a minute with Target’s content and more than 22% signed up to receive SMS deals on their mobile phones for later in-store redemption.
- However, it should also be noted that in a Harris Interactive study, nearly half of the US adult population stated that they have clicked on mobile app ads by mistake.
- Nevertheless and according ABI Research estimates, mobile marketing and advertising will grow at a compound annual rate of over 40% through 2015. In addition, another ABI Research study predicts that the number of SMS messages sent from 4.2 billion subscribers globally in 2011 will hit the 7 trillion level.
- A recent article in the Mobile Marketer noted that mobile advertising currently represents roughly 15% of online advertising but its expected to represent 64% of all digital ads in 2015. In addition, mobile ad spend was predicted to grow from $743 million in 2010 to $4.4 billion in 2015.
In other words, any company with the technological capability to master and exploit opportunities to reach consumers via mobile marketing will have a huge advantage over its competitors.
Who Are Some Key Mobile Marketing Players?
A number of companies have entered the mobile marketing market or provide mobile marketing related products or services. Hence, investors interested in the mobile marketing space should check out the following companies:
Motricity (NASDAQ: MOTR). Bellevue (Washington) based Motricity is a provider of hosted or managed service offerings, including mobile Web portals, storefronts, messaging, and billing support and settlement to enable wireless carriers to deliver customized, carrier-branded mobile data services to their wireless subscribers. However, investors in Motricity will need to keep a close eye on the company’s cash position which rose from $3 million back up to the $17.7 million level during 3Q2011. Specifically, Motricity completed term loan financing of $20 million and this financing was extended through June 14, 2012. And while Motricity’s management believes that it has sufficient capital to fund the company, they are reviewing their financing options – which may include conventional longer-term financing along with a rights offering. Otherwise and on Friday, Motricity fell 4.32% to $1.33 (MOTR has a 52 week trading range of $1.19 to $31.39 a share) for a market cap of $61.50 million.
Velti Plc (NASDAQ: VELT). Dublin (Ireland) based Velti Plc is a global provider of mobile marketing and advertising solutions that enable brands, advertising agencies, mobile operators and media companies to implement campaigns through customers’ mobile devices. Specifically, Velti Plc is considered to be the world's largest mobile marketing company based on its revenue ($100 million in gross billings and more than $20 million in net revenues for 2010), customers, consumer reach and technology holdings. Last week, Velti Plc announced the $20 million acquisition of Mobile Interactive Group - the UK's largest mobile marketing company which also has a global partnership with Skype plus has Facebook Preferred Developer Consultant status and has launched a mobile / broadcast interactive platform. On Friday, Velti Plc fell 3.41% to $8.51 (VELT has a 52 week trading range $6.11 to $20.00 a share) for a market cap of $525 million.
MDC Partners (NASDAQ: MDCA). Toronto (Canada) based MDC Partners is a provider of marketing communications services, including interactive and mobile marketing, to customers globally through operating units in the USA, Canada, Europe and the Caribbean. Over the past few years, MDC Partners has been rapidly growing thanks to its emphasis on digital advertising while its online campaigns in particular have created plenty of industry buzz – helping the company to grab clients from competing agencies. Moreover and over the past two years, insiders at MDC Partners have been buying the stock – a good sign that they have confidence in both the company and its strategy. On Friday, MDC Partners rose 0.44% to $13.81 (MDCA has a 52 week trading range of $12.62 to $20.99 a share) for a market cap of $415 million.
Augme Technologies (OTC: AUGT). New York City based Augme Technologies provides interactive marketing platforms that enable marketers and advertising agencies to integrate brands, promotions, video and other digital content through the Internet and mobile communications. Last week, Augme Technologies announced the closing of a public offering of 9,400,000 shares at a price of $2.15 per share. Augme Technologies plans to use the proceeds of the offering to fund organic expansion as well as pay off a promissory note of $1 million issued and possibly pay up to $2 million in tax liability coverage (or the company may issue more shares to pay off this tax liability). Otherwise, investors should also note that Augme Technologies has patented its end-to-end mobile marketing platform and has recently strengthened it IP portfolio with two additional patents. On Friday, Augme Technologies fell 1.14% to $1.74 (AUGT has a 52 week trading range of $1.43 to $4.77 a share) for a market cap of $145 million.
CommerceTel Corporation (OTC: MFON). San Diego based CommerceTel Corporation is a provider of proprietary mobile marketing technology that enables brands and enterprises to engage consumers via their mobile phones. Out of all mobile marketing players, CommerceTel Corporation is a stock to watch closely as its existing customers already include CNN, Disney, Sony Pictures, AT&T, Verizon, USA Network, the Golf Channel, NBC Universal and numerous professional sports franchises.
CommerceTel Corporation is also focused on the security aspects of mobile marketing as adequate security will be critical for the success and growth of the industry. In fact, CommerceTel Corporation has recently obtained a patent for an invention that exploits the capabilities of smart phones to authenticate the identity of a user and this will give the company a foothold in the global cyber security market which is forecasted by Global Industry Analysts to grow to an $80 billion industry by 2017. CommerceTel Corporation is also developing working prototypes that incorporate its invention to provide identification and authentication solutions for the banking, healthcare and gaming industries with commercial applications of these prototypes set to be launched by early 2012.
Otherwise and last week, investors should note that CommerceTel Corporation reported a 3Q2011 revenue surge of 231% over the same period last year and a 52% sequential revenue increase. Finally and on Friday, CommerceTel Corporation fell 10.71% to $1.25 a share (MFON has a 52 week trading range of $0.37 to $4.25 a share) for a market cap of $31.5 million.
The Bottom Line About Mobile Marketing Stocks
With mobile penetration rates approaching the 100% level in many places, mobile marketing stocks like stocks like Motricity (MOTR), Velti Plc (VELT), MDC Partners (MDCA), Augme Technologies (AUGT) and CommerceTel Corporation (MFON) are poised for takeoff.
