Got the message?
- Article 2 of 6
- Database Marketing, December 2002
With more and more mobile numbers becoming available to marketers, Robert Buckley finds that the latest handset technology still has a long way to go to beat SMS as a marketing medium.
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Flytxt’s Pamir Gelenbe says that return and loyalty are the areas where SMS is being used most powerfully. “It should be much more for retention than creating contacts. Mobile is fairly personal and not the best medium for acquisition.”
What many users have learnt from experience is that applying strategies from other channels to an SMS campaign almost always backfires. Farmer says that SMS campaigns should be thought of as “like the start of a relationship with a new boyfriend or girlfriend. You don't rush headlong into things. You want something that is going to be of long term value and you have to decide if that's something you want to do.” A mobile phone is something very personal to its user and should be treated with respect by marketers, he argues.
Ben Johnson, managing director of Satsuma Solutions, a technology company that provides consultancy services for mobile and Internet campaigns, says that SMS needs to be used cleverly and needs to be targeted accurately to work. “The quality of lists is key. If you are going to target cold, it’s far more preferable to do it with an opt-in list where people have chosen to receive messages. Most [rental] lists are still variable though so most of our clients are working with their own data still.”
“At the moment, it’s consumer pull rather than push,” believes Will Brown, CTO of Telecom One, which provides the infrastructure for mobile services and marketing campaigns. Rather than initiating contact with a prospect via SMS, most successful campaigns use other channels to advertise the SMS channel so that the prospects initiate contact themselves.
This tactic has gained more ground with the advent of “shortcodes” - special four-, five- or six-digit numbers. Each mobile network operator controls its own shortcodes, and only relatively recently have operators realised that it makes sense to co-operate and offer shortcodes that work across all networks. The availability of such common shortcodes was a breakthrough, says the CEO of Flytxt Lars Becker, since shortcodes are far easier to remember when flashed up on the screen, displayed on billboards and printed in magazines.
The operators' decision to co-operate in order to expand the market is part of a broader trend, observes Katrina Bond of Analysys, a telecoms consultancy. Faced with a choice between protecting their margins and allowing a new medium to emerge, operators have always chosen the first, she claims. WAP failed in part because operators were reluctant to share revenue with content providers. But having learnt their lesson, operators are changing their tune. In France, Orange has even gone so far as to publish a rate card for text-message revenue-sharing, a degree of transparency that would once have been unthinkable. As a result, an SMS campaign can pay for itself or even generate revenue through the use of premium rate response numbers.
SMS is not the only mobile messaging technology available now. Multimedia Messaging Service (MMS) and Extended Messaging Service (EMS) are both competitors to supersede SMS as the messaging system of choice. Both offer graphics capabilities, with EMS providing basic logos and pictures and MMS providing photo support. The latter can also carry sound and potentially video on faster GPRS (and in the future 3G) connections, although the handsets to send and receive messages are not yet available. Mobile network operators are currently pushing the photo messaging aspects of MMS strongly, providing it on many entry-level phones and setting up special tariffs for MMS messages.
Analysis firm Frost & Sullivan predicts the eventual triumph of MMS over both EMS and SMS. It foresees continued growth of SMS into 2004, after which it will level off, with revenues declining as MMS rises in popularity approximately 900% between 2004 and 2007.
But so far, network operators have failed to have the epiphany they had with SMS. Benchmark Research’s survey showed that while SMS is popular with marketers, 31% believe the costs associated with MMS are prohibitive and will stunt the growth of the market. The networks have also used slightly incompatible versions of MMS, and have not yet implemented gateways between their networks - as they did with SMS - to enable messages to cross network boundaries. It will be Spring 2003 at least before there are such gateways.
“There are a lot of problems for the widespread adoption of MMS,” observes Opera Telecom’s Corbett. “Because of the pricing, lack of handset and operator interoperability, the difficulty for user setup on the handset, it will be at least a year before it is a mass market and three years before there is a 30% penetration of MMS-capable phones.”
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