Media companies and mainstream brands are moving delicately to use text messages as a way to snuggle up next to mobile users without incurring their wrath. And they’re hoping to pick up the tab.
SMS marketing campaigns have a long-and decidedly mixed-track record. European marketers in 2000 and 2001 saw an impressive response rate of 11% from text-message ads, far exceeding the performances of other marketing avenues. But the efforts also sparked a consumer backlash that forced McDonald’s restaurants and others to put the brakes on their SMS campaigns.
U.S. consumers have been wary of text-messages campaigns as well. A study released earlier this year from Forrester Research Inc. found that a whopping 79% of online consumers are annoyed just by the thought of receiving an ad on their phone, and a miniscule 3% said they would trust ads delivered by text message.
An SMS solution
Consumers’ fears regarding unwanted text messages are easy to understand, of course. Not only can such missives be intrusive and annoying, they can be costly to users whose subscriptions don’t include unlimited SMS. But U.S. carriers are working to install systems that support “free to end user” messaging, allowing advertisers to pay the bill.
“In the U.S., carriers are just now starting to have what I would say are meaningful conversations” about FTEU messaging, said Steve Livingston, chief marketing officer of mobile transaction company mBlox Inc. “We have plenty of customers that want to do this; there is a huge demand.”
And that demand isn’t just from marketers, Livingston explained. A host of vertical markets wouldn’t mind paying to send text messages to customers as a way to expand their services and increase stickiness. Banks could send account updates, notifying customers of any changes to their accounts. Travel services could inform passengers when their flights are late. Shoppers could receive a free message alerting them that their purchase is ready to be delivered.
More play with pay
Because advertiser-paid messages protect the user from unwanted charges, they allow brands to broaden the scope of their campaigns, according to Diane Strahan, VP of mobile product marketing for NeuStar Inc., the clearinghouse and directory service company that oversees the common short code program in the United States.
“I think it will be wonderfully empowering for brands to take on the possibility of paying for” text messages sent to customers, Strahan maintained. “I think it’s definitely a big opportunity for brands to be able to offer some unique services, especially to target markets like the elderly and children, there are a little more complicated use-cases.”
Installing such systems can be a bit of a headache for carriers, of course, which are struggling with more urgent concerns such as generating advertising dollars, dealing with the rise in off-portal activity and shoring up customer-care departments. And it’s unlikely that FTEU messaging will help SMS usage surge until each of the tier-one carriers embraces the service, eliminating the need for advertisers to segment their targeted audience by network operator.
But U.S. consumers may be softening in their opinion of mobile advertising. Harris Interactive followed Forrester’s report with a study indicating more than one-third of adult mobile users in the United States are willing to accept ads in exchange for cash, coupons, free talk time or subsidized content downloads. Seventy percent of those who said they are at least somewhat interested in accepting ads were willing to provide personal information, if it meant they could customize the service and turn ads on and off.
That chill between consumers and mobile advertisers may continue to thaw if companies can reach out to users without dinging their wallets at the same time.
“I do think there’s plenty of interest” in FTEU, said Livingston. “I think the marketing people at the carriers see it. I think there are a different set of priorities at the carriers right now. But I don’t think there are any nonbelievers.”
