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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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JUNE 22, 2004
A Marketer's Dream: Your Cell Phone [Page 2 of 2] VIRAL MARKETING. Cell-phone companies are figuring out how to use text messages to give young customers a feeling of privilege. Cingular Wireless sends messages inviting fans to exclusive local encounters with stars such as hip-hop performer Ludacris. "If you've got a Cingular phone, you use it as an entry to meet and greet," says David B. Garver, Cingular's director of marketing. He says the prospect of an Atlanta get-together with In Sync's J.C. Chasez had young Cingular subscribers camping out all night. What does Cingular get out of this? Promotions generate a flurry of text mail, as customers resend the message to their friends. The more phone traffic, the more revenue Cingular can rake in. More important, those messages spread word about the benefits of Cingular membership, and they amount to a viral marketing campaign for the carrier. Garver says many adults fail to understand the phenomenon text messaging is becoming. Sure, the U.S., which had $1 billion of text traffic last year, is still dwarfed by the $16 billion European market. But led by teens, text messaging in the U.S. is growing fast. Garver estimates that his 16-year-old daughter sends 1,000 messages a month. And that forced him to upgrade the family cell-phone subscription. HIT OR MISS? Lots of companies use text messaging to give their customers a voice. Every evening at 9 on WDRQ radio in Detroit, the station plays a new song and asks listeners to weigh in with text messages. H stands for hit, M for miss. Each week, says program director Alex Tear, participation rises. Hits, of course, get increased play time. "It gives listeners a chance to mold their own radio station," he says. Like many companies venturing into the text market, WDRQ hasn't yet begun sorting their voters into databases for future promotions. This is true of the TV networks as well. "ABC and the others can start to get a much better understanding of their customers," says TeleNor's Traasdahl. "They haven't used it for anything yet but area codes." That stands to reason. The new forms of digital marketing make it a cinch to send messages by the millions. But as bulk e-mailers have learned, making sense of the return traffic is much trickier, even for companies that have a one-to-one relationship with customers. It requires natural-language software that can process and sort through an avalanche of mail and messages. For now, broadcasters are happy to have a simple feedback from customers -- usually just a thumbs-up, thumbs down -- and to pocket their share of the text-messaging revenue. MORE CENTS TO SPLIT. However, the options are near limitless. Just imagine the possibilities from the marriage proposals at Fox's New Year's Eve bash. A savvy wireless marketer could have sent promotions to those phones for long-stem roses, diamond rings, honeymoons in Maui. And they would have reached consumers in a state of ardor -- every marketer's dream. With transaction services available through the phone, already common in much of Europe and Asia, the suitors could even click to buy. Opportunities for cross-promotions abound but are unlikely to take off on a big scale until more sophisticated multimedia messaging supplants today's simple texts. The reason is economics. Say the Boston Red Sox teams up with Verizon Wireless in a promotion to get fans to vote for their favorite player on an ESPN telecast. Today, those three companies would have to divvy up the text revenues, which average only 3 cents to 10 cents apiece in the U.S. But within two years, say analysts, multimedia messages, complete with color video and music, might fetch 25 cents each, or more. The key is to have a big enough pie," says InPhomatch's Street. "If there's enough money in it, all sorts of businesses can grow." A NEW WORLD. And they will. The winners will be companies that build up piles of cell-phone numbers whose owners opt-in for advertising. But they'll be leaning heavily on software companies to help them digest all the mail and on ad companies equipped with demographers to help them target their pitch. Spammers? They'll be around, though less free to wreak havoc on mobile networks, which are owned and controlled by phone companies. But that doesn't mean lots of these ads won't feel like spam. An entire new marketing world is opening up. And with each day, look for more of these mobile marketers to be knocking eagerly, asking for access to your cell phone.
 By BusinessWeek Senior Writer Stephen Baker in New York
BW MALL
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