James Martin of E-Commerce Guide has published an informative article on the huge rewards (and the potential pitfalls) of mobile marketing. The article is worth a full read, but if you're short on time, we've pulled out some highlights for you. FYI: Martin identifies two types of mobile marketing--Opt-In SMS and Mobile Banner Ads.

Opt-in SMS (Short Message Service) campaigns, in which a consumer provides a business with his or her cell phone number in exchange for special offers or alerts delivered via text message, is one option. For example, a cosmetics retailer on eBay may send SMS alerts to customers, reminding them when it's time to reorder and offering a 15 percent discount coupon if they buy now.
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Though still primarily used by large corporations, mobile marketing is increasingly attracting interest from small e-tailers and retailers, said Strother. "The mobile phone is a very personal device. People take it with them everywhere they go — especially people 35 and under. So you can easily develop a one-to-one relationship with your customers through their mobile phones." Messages sent to a mobile phone are much more likely to be read than e-mail sent to a PC, which may get routed to a spam folder, Strother adds.

The result: Mobile marketing can be more effective than other forms of marketing, said Bob Gold, CEO of Gold Mobile, a mobile marketing solutions company. Because mobile campaigns are highly targeted and opt-in, Gold said consumers typically redeem 5 to 20 percent of coupons delivered to their cell phones, compared to only 1 to 3 percent of coupons received through direct mail or e-mail.

Mobile marketing also helps e-tailers gather valuable data, such as cell phone numbers, on consumers who are interested in their products or services. "Once you get your customers to opt in (to receive an offer or alert via text message), you can capture them in your database and use that information later for loyalty marketing and customer retention," Gold said.

And some common mistakes to avoid?

For a mobile marketing campaign to succeed, Gold said, you must first understand your customers. For example, are your customers heavy text message users? Do they frequently use their cell phones to find products and services? If not, a mobile campaign may not be an effective strategy for your marketing efforts. If you do decide to go mobile, every mobile marketing campaign should be opt-in, Gold adds.

Head over to E-Commerce Guide to read the rest of the piece.