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Mobile Marketing
SMS: Response-able Marketing
Attitudes in
mobile phone use in Australia confirm marketers should view mobiles as a channel for
customer response, rather than a delivery channel for marketing activities. "SMS is a
wonderful response mechanism but with 160 characters, it's really a terrible advertising
medium," says Niki Scevak, senior analyst, Jupiter Research, Australia.
A
new survey by Jupiter
Research (which shares the same parent as this publication) also suggests that people
are more interested in enhanced utility through their handsets rather than entertainment,
particularly in terms of communication.
"The
trend is all about communicating. In terms of commercial value, communication has
always been proven to be more valuable than content," explains Scevak.
"There's much more demand for applications that enable people to communicate with
each other, and for more enhanced, richer communication."
The
report finds that, despite Australia having one of the highest relative costs for sending
SMS, it also has one of the highest average user rates. Seven million people
(approximately half of Australia's mobile phone users) each send on average 44 messages
every month.
There
is also growing evidence of participation in marketing events. TV promotions lead the way,
with 21 percent saying they had entered a competition or voted via SMS (over the last 12
months) in response to a TV campaign, while 15 percent responded to food or drink
packaging, 5 percent to radio promotions and 4 percent to print promotions.
The
demand for communication over content is highlighted by interest in next-generation mobile
services. The most popular services users said they'd be interested in using were: photo
messaging (35 percent), accessing local information such as maps, restaurants and
transport timetables (32 percent) and sending e-cards (23 percent).
In
contrast, content such as various file downloads, video news and financial information
were all considered desirable by far less people.
The
revenue-share barrier
By
far and away the greatest amount of SMS activity in Australia is person-to-person. Of a
projected 4 billion messages that will be sent this year, 3.7 billion will be P-to-P. The
remainder are person-to-application (A-to-P), such as entry to competitions, and clearly
this is an area where considerable growth is possible.
The
vast majority of mobile users still don't use their phones for this activity. The report
shows 69 percent of users have not entered a competition or voted via SMS within the last
year at all, and Jupiter predicts A-to-P SMS usage will grow from 7 percent this year to
only 12 percent in 2008.
Scevak
believes this is because the market lacks promotions compelling enough for users to
respond to, which in turn relates to the lack of incentive the current revenue-share
structure provides to businesses: "If the telcos don't give incentive to media and
business clients to drive these services, they'll miss out."
"It's
easy to see that a smaller share of a larger pie is better than what we have now," he
argues.
Carriers
here typically share only 30-40 percent of A-to-P revenues, which at current SMS rates
means only a few cents per message. However, the report also says the introduction of
premium-rate SMS services will help shift the telcos' stance on these deals. Greater
pricing flexibility, and hence the opportunity for larger margins, will make driving
A-to-P services more attractive to all parties.
Scevak
believes Australia will follow arrangements in other markets, where telcos in Europe share
an estimated 50-70 percent of premium-rate revenues and as high as 70-80 percent in China:
"It really is inevitable that, over time, these revenue-share deals will change in
favour of the promoters."
And while he admits it still remains to be seen
whether Australians are ready to start paying premium-rate SMS charges, he again cites
experiences in more mature markets as a clear indication they will: "In Norway,
premium-rate SMS accounts for only 3 percent of the total messages sent, but 20 percent of
the value, so it's proven that people are comfortable using it." [link original]
SMS marketing could be patented A relative newcomer
to the telecommunications industry has a patent pending for its interactive promotional
text messaging product that will have far-reaching implications. Cool 123 is an up and
coming New Zealand-based research and development company that had filed for patent in New
Zealand and internationally for its real-time interactive promotional SMS product that
includes voting and polling.
“The exciting
thing about this patent is that it broke new ground by introducing SMS marketing,”
says Bryan Smith , Marketing Director for Pipers Patent Attorneys who are representing
Cool 123.
First introduced by
Cool 123 in 2000, the interactive text messaging product provides a platform with which
anyone who owns a mobile phone can interact with advertising and media campaigns. This
could include sending a keyword or code from a billboard, media advertisement or product
packaging to enter a competition, and then being able to receive a reply via a
‘sms-coupon’, ‘sms-voucher’, or ‘sms-tickets’ to their
mobile phone.
Although the
product has been utilised for the past two years, it has yet to be granted a patent but
once it is, it will have widespread global implications for the telecommunications
industry in the future.
As SMS based voting and polling has been in use in several
countries for the past few years, it is difficult to see how this patent could pass due
diligence. However, the workings of patent offices is a strange world, and if granted this
could have a serious impact on the growth of SMS and interactive television.
SMS Marketing: More Value 4 Ur $
BY DARRYL
NELSON (profile )
| June 04, 2003 Mobile marketing in Australia is still
primarily about SMS campaigns, yet some results are starting to underline its strategic
value. According to David Burden, CEO, Legion
Interactive , Coca-Cola's first "Summerdays" campaign in 2001 saw 2.4 million
valid entries, while a follow-up promotion produced a further 3.4 million entries.
Despite
multiple entry channels, a staggering 97 percent of those entries were received via SMS,
says Burden. "We're seeing a lot of activity around promotional campaigns, with SMS
as an entry channel for competitions," he adds.
With
such growing importance to marketing strategies, the Australian Direct Marketing
Association (ADMA) has made moves to include SMS in
its Code of Practice, and will be launching the initiative at the Pan Pacific conference this month.
All
members of the ADMA have agreed to an opt-in policy for SMS marketing lists, and the
organization will be adding a 'Do Not SMS' register to its website. It already provides Do
Not Mail and Do Not Call registers, allowing consumers to expressly opt out of receiving
such marketing activities.
"We
want the mobile market to be buoyant and for consumers not to worry about mobile marketing
spam. The mobile phone is a very personal device, so it should be like that,"
explains Burden, who is also a director of the ADMA.
Because
it's still primarily SMS-based, Burden argues mobile marketing is very much a component of
a mixed marketing strategy, and not yet mature enough to run as a standalone campaign.
"SMS is still only 160 characters, so it's not really very compelling. It needs to be
supported through other channels," he says.
He
does see that this will change to some degree with the emerging technologies of MMS and 3G
networks, which will make content compelling enough to run standalone mobile marketing.
However, he adds this is unlikely to be until 2006 at the earliest: "Until we get
penetration of these types of devices, there wont be a massive uptake of standalone mobile
campaigns."
Consequently,
the use of mobile marketing remains restricted to a few key areas and players. As well as
part of major brand promotions, such as with Coca-Cola, SMS is also being used in
conjunction with outdoor media.
Burden
cites the case of St George Bank, which has been successfully running promotions at AFL
and NRL matches. Billboards within the stadia invite participation via SMS from the
watching fans: "It's really the only mechanism that enables them to respond without
leaving their seat," adds Burden.
Perhaps
the greatest success is being seen among media businesses, which are using it for
increased interaction with audiences. SMS is having a particularly significant effect with
TV networks. A survey in Europe by Strand Consult reportedly found that premium-rate
mobile TV-voting services generated more than EU85m (A$152m) in revenue in 2002.
However, Burden points out that
Australia traditionally lags Europe by about 12-18 months, and many SMS campaigns here
have run at a loss: "We've just launched premium-rate SMS services here, with Big
Brother 3, so they're very new to Australia. The ability to generate revenues from these
kinds of service is still viable, but most currently are not."
"For the TV networks, giving the
viewer another reason to watch the channel is what they're most interested in," he
says. Nevertheless, he adds that many TV executives are starting to look at the SMS
response rates and wonder whether interactive TV services are not already here.
Niki Scevak, senior analyst, Jupiter
Research (that shares the same parent as this publication), concurs, explaining that the
phenomenon appears to be making huge investments in interactive TV infrastructure somewhat
redundant: "There's already massive mobile penetration, and with premium rate SMS,
there's now a revenue stream. It's really such a simple and elegant response
mechanism." [link original]