It’s no secret that short codes have failed to gain traction among mass-market wireless subscribers in the United States. Tim Jemison thinks he knows why-and how to cash in.
Jemison is the chief executive officer behind Zoove Corp., a Palo Alto, Calif.-based startup expected to come out of stealth mode this week. Instead of sending a key word to a short code via SMS, Zoove hopes to gain traction by allowing users to access information on their handsets by pressing the star key twice followed by a code.
The company is touting a study it commissioned that found only 47 percent of mobile users know how to send a text message to a short code. And 85 percent of those find the process too difficult or time-consuming for practical use, according to the survey, which was conducted by Mediamark Research Inc.
“The original thought was that mobile-originated (messaging) would be a huge opportunity for brands and content providers to have consumers interact with them,” Jemison said. “But it is nowhere near the level that anybody in the marketplace thought it would be.”
The study used marketing campaigns from Outback Steakhouse, Royal Caribbean Cruise Lines and Volvo, tracking consumers’ response to ads via their mobile phones. More than 90 percent of users responded successfully to the ads via Zoove’s “StarStar” service, according to Mediamark Research, nearly doubling SMS short code response.
Zoove’s technology uses Signaling System 7, a set of telephony signaling protocols used to set up calls on the public switched telephone network. Like short codes, the system can be used to send marketing messages or a WAP or Web link a user can click to receive more information.
SS7, which is used to link VoIP calls to the PSTN network, also allows marketing companies to send customized content based on what kind of phone a consumer is using.
“We are able to determine what type of handset a person is calling from; we get to resolve the data element against a database,” Jemison said. “That allows us to render the appropriate handset based on its capabilities.”
The 15-employee company is actively courting carriers worldwide and has secured $6.5 million in venture capital. Like other mobile marketing companies and search service providers, Zoove hopes to build a business model based on number of “click-throughs” by users looking for more information.
And, like others, Zoove is looking to help companies deliver free content to users who accept advertising messages. Ad-supported content could help spur sales of premium offerings such as mobile video and full-track downloads-applications that have often been slow to gain traction due to high prices for both content and data usage.
A survey released last week from Enpocket found that users between the ages of 18 and 34 have the greatest appetite for mobile content; the same group lists price as the biggest hurdle to using such offerings. Advertisements could also support more mainstream applications such as photo-messaging, which was cited as the favorite wireless application by 52 percent of users in both the United States and the United Kingdom.
The study echoes a recent IDC report indicating users will accept wireless ads as long as they are targeted, useful and meaningful.
“Mobile operators will have to embrace mobile advertising, which is key in their strategies for the coming years,” said Paolo Pescatore, a research manager with IDC’s Consumer European Wireless and Mobile Communications division.
