People are increasinglystaying in touch via text messages,
and advertisers can’t wait to be a part of the conversation.
On Aug. 23, 2008, shortly after 3 a.m. Eastern time, the Obama campaign sent out 2.9 million text messages to announce Joe Biden as Obama’s running mate. Although the story had been scooped by the networks before the text message was actually sent out, the feat still represented a kind of coming-of-age for mobile marketing.
The Biden announcement represents an impressive milepost for SMS. Consider that it was only seven years ago that text messaging across networks was introduced in the United States. The Common Short Code Administration (CSCA) Web site states that rollout in the United States was slowed by the unique challenges inherent in many different networks running on varying technologies (i.e. CDMA, TDMA,GSM).
Those hurdles were surmounted, and mobile marketing is poised to be one of the more effective advertising tools in recent history. A wave of cheap unlimited texting plans combined with an unsavory global economy that has advertisers looking for cost-effective tools have come together to produce the perfect storm for SMS and short code marketing.
EVERYBODY’S DOING IT
If you’re going to create a market for short codes, the first thing you need to have is adoption of SMS. A December 2008 report from Nielsen revealed that the average number of text messages sent among wireless customers in the United States rose from just 65 in first quarter 2006 to 357 in the second quarter of 2008. Adoption demographics are widening as well. The same Nielsen study found that as of second quarter 2008, American adults aged 35-44 were sending an average of 236 text messages per month.
Numbers like those are music to Diane Strahan, vice president of mobile marketing for NeuStar, the company behind the Common Short Code Administration (CSCA). She’s optimistic that short codes and SMS advertising will finally have their day. “Personally, I think 2009 and 2010 are poised to be the year of SMS marketing,” she says. “There are currently 75 billion text messages sent per month just in the United States. That’s more texts than phone calls.” Strahan notes adoption rates across demographics in the 70-80 percent range.
SHORT CODES CREATE NEW CUSTOMERS
Short codes are a unique way of soliciting either one-time or enduring consent from a potential customer. For instance, an advertisement in a magazine offers a coupon for a free slice of pizza by texting “eat” to the common short code PIZZA.
Some might ask why the advertiser didn’t just include the coupon in the magazine. The answer is quite simple. By prompting the potential customer to take action, the advertiser has formed an active, consensual relationship that produces a result and hopefully a new customer. Jeff Hasen, chief marketing officer at HipCricket, a mobile marketing agency, has seen the power of these relationships firsthand.
“We recently did a campaign for Jiffy Lube where contestants could text into a Clear Channel station for a chance to win a year’s worth of oil changes,” Hasen says. “Each customer who entered received a coupon. Fifty percent of those who actually redeemed the coupon were new customers. The most [Jiffy Lube] has seen with other mediums in the past was 20 percent.”
The personal relationship that users have with their mobile devices and the people they communicate with on them is attractive to advertisers, but it’s also cause for extreme caution. The Mobile Marketing Association (MMA) published Consumer Best Practices (CBP) Guidelines, stressing subscriber privacy and limiting the impact that marketing has on the consumer. A poor user experience could result in reluctance on the part of the consumer to participate in mobile advertising in the future.
Both Strahan and Hasen highlight the fact that all mobile advertising should be done on an opt-in basis only. Given responses like what Jiffy Lube saw with its campaign, it appears that marketers recognize the need to adhere to the MMA’s Best Practices. “I absolutely think consumers get it and want to use it more and they will talk about it and it will become absolutely viral,” Strahan says.
Another attractive aspect of short code marketing is it’s completely quantitative. Companies that employ these kinds of campaigns are privy to immediate feedback and are then able to adjust future efforts accordingly.
“The biggest risk is TV. You can’t trace anything once the spot has aired. With SMS and short codes, you can trace everything. It’s just that marketers haven’t been informed that mobile should be one of their prime customer acquisition and retention tools,” says Mickey Alam Khan, editor in chief of Mobile Marketer.
Strahan agrees. Given the current economic environment, the extensive feedback that comes along with short codes is one of the medium’s greatest strengths. “Brands are under huge pressure to prove an ROI. This is very quantitative, you know exactly what you spent and what consumers acted on.”
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THE UBIQUITOUS SHORT CODE?
Although short codes are still hung on a couple of obstacles, the technology appears on the brink of ubiquity. Browse the registry at the CSCA’s Web site and you’ll find some big names, from NBC to CBS, ESPN to MLB.
Alam Khan sees a lack of education as the single most important issue surrounding the use of short codes in mobile marketing. “Education is very important. For short codes to become more mass market, marketers definitely need to get more education of the value of SMS and where text messages fit in with the consumer experience.”
While incredibly optimistic about the future of the technology, Strahan too concedes that education is one area that needs improvement. She also notes that obtaining and implementing a short code is a relatively complex process. “We need to make it easy,” she says. “It’s not currently an easy process. Everyone’s working very hard to increase education and awareness.”
But it appears that marketers just might get their education in an organic manner as the short code goes viral. “One way that marketers will increase adoption is to observe others. So if McDonald’s is using SMS, Pizza Hut will be emboldened,” Alam Khan says.
Currently short codes are being used in a variety of ways, and that list is expanding. From early uses as a way of selling and purchasing ringtones and wallpapers, short codes have matured as the increasingly favored avenue for news outlets to release breaking news. Radio stations are using them to solicit easy participation in contests. Want the score on the big game? Most professional sports teams have branded short codes that users can text to for scores.
While the medium has long been employed by political and social activists in Europe and Asia, some in the United States are just waking up to the medium. Alam Khan thinks that’s all about to change. “Barack Obama, the president of the United States, was elected in no small part due to texting and mobile marketing,” he says. “These were the two tools he used to get the word out there.”
By consensus, the short code may never be a standalone medium. “Mobile is best used in conjunction with other channels and that applies to SMS. Short codes and keywords give legs to other channels such as TV, mail, inserts, radio, outdoor and the Internet,” Alam Khan says.
Still, short codes represent a new and powerful gateway to the consumer. By accessing the mobile channel, advertisers are able to penetrate an increasingly sacred space – the cell phone. As smartphone features become the norm and the media-rich mobile Web evolves, short codes will enable the consensual delivery of branded content to customers. That means an interaction with consumers that transcends the text message and enters into the realm of experience.