Text messaging is taking off in the U.S. -- both with users and in the marketing mix.
The mobile phone is the first truly personal medium -- always held, always on -- and it opens up many new opportunities for marketers. Done correctly and responsibly, mobile marketing can drive a high level of response and consumer action while building brand recognition, loyalty and sales in a cost-effective manner. It is widely acknowledged that text messaging is a highly-efficient channel for TV voting, as has been witnessed in primetime reality TV programs.
However, this is just the beginning of mobile marketing’s role in the marketing mix, as mobile phone usage becomes more pervasive and brands seek new ways to reach the consumer on a personal level.
This impetus for mobile marketing has come from brands looking to exploit the benefits of tight, timely personal targeting. But it must also come from consumers themselves, realizing the value of the medium as it allows them to respond at will for more information, request a call, receive an alert, claim a voucher, enter a drawing or vote in a TV show.
Mobile marketing is a burgeoning marketing channel that will leverage the fast adoption of “short codes” by the general consumer market. Short codes offer a method of reaching individuals with relevant, targeted advertisements, information and offers. While text messaging is spreading like wildfire among consumers, short codes are still relatively new to those involved in the strategic and creative planning of campaigns. Account directors, planning directors and creative directors are just now learning how easy it is to deploy short codes and they are beginning to realize the associated benefits.
What are short codes?
Short Message Service (SMS) allows text messages of up to 160 characters to be sent and received across a service provider’s network via a mobile device. Multimedia Message Service (MMS) is a method of transmitting graphics, sound files, short text and even short videos over wireless networks. Together, their brevity and widespread use across service providers as a communications medium offer marketers an ideal mechanism to reach consumers.
Common short codes are shortened five-digit phone numbers assigned by wireless carriers. Rather than responding to a mobile marketing offer by texting back to a full 10-digit phone number, consumers can send their response via an easy to remember "short" code. They can be used in a variety of ways -- enabling users to "text" (to IM) for details, text for a call, text for a brochure, text to win, text for a voucher, text to collect points, text for a quote, test for a test drive and so on. By varying the short code or key word response given in each channel, text response is also an excellent way to assess media effectiveness. The personal nature of the mobile means it is an ideal vehicle for deepening consumer interest in an ongoing event or service.
Text messaging is such an efficient and easy way to communicate with customers, that the medium opens up many new ways to deliver service and develop loyalty. For airlines and hotels, there is value in delivering booking references and travel updates direct to a customer wherever he or she is. For event organizers, mobile ticketing and vouchers can enhance service and sales. For public sector and private companies -- hospitals, banks, retailers, government organizations and so on -- employee and customer alerts and reminders can improve communications and significantly reduce costs.
The cost of adding mobile to the marketing mix
The cost-per-contact in mobile marketing is a fraction of comparable costs in traditional marketing channels, such as direct mail and call centers. For example, the cost per contact for direct mail begins at $1 and can run into the tens of dollars, while SMS carries a cost per contact of only 15 cents.
In traditional marketing channels, such as television -- which includes a huge allowance for wastage -- Procter & Gamble sends Tide TV advertisements to the entire audience of 'Friends,' for example, but only a small percentage actually responds to the advertisement. The combination of mobile marketing’s predictive models and dynamic profiling ensure that P&G interacts only with the 10 percent of its customers actually interested in Tide. The cost savings associated with radically-lower wastage in mobile marketing are remarkable.
In addition to reducing wastage, the increased relevance of mobile marketing solutions increases response rates. Average response rates for campaigns reach beyond 15 percent --compared to less than 1 percent for traditional direct marketing campaigns.
Finally, the average cost of buying and sending a targeted SMS message is less than the cost of a stamp, and there are no production costs. So, there is great opportunity for delivering ROI that is superior to direct mail -- which incurs costs for list rental, postage, envelopes and printed letters or other enclosures.
Why hasn’t mobile marketing taken off until now?
Education. Some marketers still have misconceptions about the U.S. wireless infrastructure, and about text messaging. People think that various U.S. wireless service provider networks have difficulty connecting with each other. In addition, marketers haven’t realized until now how well SMS adoption is progressing.
But this perception is not reality.
Connectivity between U.S. service providers is excellent. Many Americans now rely on their mobile phones as a primary means of communication, and a huge number have stopped using landline phones altogether. This has propelled text messaging to new levels -- according to the Cellular Telecommunication Internet Association (CTIA), users sent 1.5 billion text messages in the United States in December 2003. That's more than the 1.4 billion sent that month in the U.K., where text messaging has been commonplace for quite some time. It’s clear that the United States is embracing text messaging the way the U.K. already has.
Like all new things, mobile marketing had its early adopters, and is now stepping up to a role as a mainstream marketing communications channel. It is coming together under the perfect storm of carrier infrastructure, pervasiveness of mobile devices, and a low cost of marketing execution. Now is a great time to add mobile campaigns to your overall marketing mix.
What about public concerns about mobile spam?
One thing is clear: text messaging opens the door for more timely, direct and spontaneous communication with customers. Provided the channel is well managed and not abused, marketers and consumers will benefit significantly from its use. Organizations such as the Mobile Marketing Association have set forth a code of conduct for marketers, to help prevent this medium from being riddled by mobile spam.
The principle behind consumer-driven mobile solutions is that mobile is an opt-in medium, where the interests and preferences of the consumer must be well-served to maintain communication. It is critical to focus on these preferences through profiling and analytics -- both to keep customers satisfied and to develop optimum ROI for marketers.
Considerable responsibility on the part of marketers, wireless service providers, agencies and users alike will ensure that mobile marketing is conducted in a manner that will benefit all. Above all, mobile marketing must be strictly opt-in and include source identification so that consumers can easily opt-out of individual programs.
How Todd TV used short codes to drive viewer participation
The United States has traditionally been seen as a follower when it comes to reality TV. However, FOX's Todd TV -- broadcast on FX Networks from January to March this year -- used mobile to engage the audience in a new way.
The show followed Todd, a self-confessed beach bum, as he looked for his place in the world. It gave control of his every move to the audience, who text-messaged in their opinions on what life decisions Todd should make next. Todd was then obliged to carry out the audience’s wishes -- with hilarious consequences.
FOX's pioneering use of mobile technologies meant that it could keep in touch with fans of Todd TV, even while they were away from the show. Before each broadcast, the production crew used an instant audience interaction tool to text questions to viewers' mobiles -- should Todd cut his hair, play volleyball or paint his apartment?
Within 5 minutes, the crew received instant poll results and Todd proceeded according to the wishes of the audience. This meant that viewers could return home to watch the show to see the impact of their decisions on Todd's life.
Another innovation of the show was a feature that enabled the audience to get inside Todd's mind. Opted-in viewers got texts from Todd, synchronized with the TV show. For example, Todd shared his personal thoughts about meeting his mother for dinner as it was happening on the show.
Todd TV has proved to be a living example of how text messaging can change the way TV is made, turning reality TV production on its head by enabling the collaboration of thousands of viewers who had actually become directors.
Considering all of the above, it won’t be long before brands of all types of marketers seek to use text response more broadly in their mix. And the marketers and agencies that understand the power of this personal medium will likely be the first to reap the rewards.
Jonathon Linner is CEO of Enpocket. His career spans two continents, three successful start-ups and a range of media, broadcasting and technology businesses. Before founding Enpocket, Linner was worldwide head of the Engage wireless business, and was a member of the pioneer team that developed the company's media analytics offering, AdKnowledge, in San Francisco.