MEDIA COMPANIES AND RETAILERS are beginning to target wireless users with free, advertising-supported services. And carriers are slowly tolerating-if not quite embracing-such offerings.
USA Today last week launched a mobile search service that delivers text alerts about news, sports scores, stock quotes and other topics via a short code. Messages are accompanied by an interactive marketing come-on that users can reply to for more information.
The national newspaper said it will promote the offering in its print publication, and suggested that advertisers can use the service to deliver mobile coupons and contest entries as well as collecting e-mail addresses and conducting polls.
The service is powered by 4INFO Inc. and comes on the heels of a similar offering for college hoops fans. 4INFO claims to have delivered more than 750,000 text-messages during the NCAA basketball tournament in March that included a plug for Chevrolet. Fans who responded to the ads were sent information about their nearest Chevy dealer.
“Chevy saw an 18.5% unique response rate to the ads; about one in every five people was responding to that,” claimed 4INFO co-founder and CEO Zaw Thet. “That’s about 20 times as much response as they’d get on the Internet.”
Text marketing gaining steam
SMS-based search services are nothing new, of course. Google Inc. was first on the scene three years ago, and the company continues to deliver text messages to users who send a business category-pizza, for instance-and ZIP code to a short code. Similar services are offered by a host of others including Yahoo Inc., Ask.com and Yellowpages.com.
But high-profile media companies and big brands not only have content-or can partner to get it-they also possess the visibility to drive traffic. Familiar names are increasingly considering a host of free mobile applications and services as a way to raise brand awareness, increase customer loyalty and generate advertising revenues. And they’re looking far beyond simple text messaging, according to Dave Singer, vice president and general manager of the Americas for Telmap Inc. Telmap powers the mobile version of MapQuest Navigator, which is on the deck of Sprint Nextel Corp., but is working to move beyond carriers to outside companies hoping to deploy a branded mobile mapping application.
“Our primary focus is carriers, but right behind carriers is a whole host of companies and needs,” said Singer. “There’s no reason why a retail chain couldn’t offer a branded mapping application.”
Coin for carriers
Network operators, of course, stand to profit handsomely from services such as 4INFO’s and Google’s that drive text usage, which continues to account for the overwhelming chunk of data revenues. They’re far less likely, though, to get a taste of any ad revenues a third-party brand might generate from an ad-supported, downloadable application. AT&T Mobility recently made headlines by blocking an attempt by Research In Motion Ltd. to include a free, embedded navigation application on its BlackBerry. But, Singer said, carriers are willing to tolerate similar offerings from companies with powerful consumer pull.
“Even Verizon is looking at, ‘How do we leverage an application to help us grow our market share?'” Singer said. “They’re not opposed to working with huge, very strong consumer brands.”
4INFO has built an impressive network of content providers and advertisers, and the startup delivers a cornucopia of information including sports scores, weather, television listings (through a partnership with TV Guide) and celebrity information. And it recently closed a $10 million investment round led by Gannett, signaling an aggressive move by the communications giant into wireless.
The startup has gained traction, Thet said, by providing media companies with an inexpensive way to extend their brand to mobile as it creates an entirely new platform for advertisers, who foot the bill.
“For digital media, the struggle has been, ‘How do we create new inventory,'” according to Thet. “This provides a whole new revenue stream for them. There’s very low risk on the mobile side; there is no upfront cost.”
So providers of white-label mobile services may have a whole new hunting ground beyond the limited number of carriers in the market. Startups that once targeted only mobile operators are beginning to see potential customers in the growing number of media companies and retailers dipping their toes in wireless by giving away applications and services.
All the space needs now, said Singer, is to deliver effective wireless ads that can support the model.
“How do you convert (free third-party applications) into an advertising model?” Singer asked. “I don’t think anybody’s figured that out yet. But we’ll get there.”
