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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 The world's 1.3 billion handsets offer marketers a potential direct link to consumers, and they're starting to exploit it The champagne was on ice, the music by Puddle of Mudd and Metallica thundering loud and hard. This was America's Party, a live show from Las Vegas on Fox (NWS ), and it looked like a standard televised New Year's Eve bash. However, this show, like so many others this year, included a new wireless component. A stream of text messages flowed across the bottom of the screen. Tens of thousands of viewers across America were sending these messages from AT&T Wireless cell phones, and waiting anxiously for their jokes, put-downs, or love notes to scroll across. "We had 25 marriage proposals that night," says Are Traasdahl, executive vice-president for sales at TeleNor Mobile InterActive, the technology provider for the service.
Peck out a note or cast a vote on your cell phone. It's a global rage. Text messages are key features on Survivor and American Idol, and they're a growing part of a monster-size business. Callers will send an estimated 548 billion text messages this year, according to industry trade group, GSM Assn. That's about 100 for every man, woman, and child on the planet. BARELY TAPPED BONANZA. Each one costs between a penny and a dime to send, adding up to a worldwide revenue stream that's expected to reach $27 billion this year. And as phones over the next two years handle more color pictures, video, and hi-fi sound, a flow of more expensive multimedia messages should drive more growth. Short messages are a bonanza for wireless carriers, but one that's now reaping only a fraction of its potential. Why? The marketing side of the text-messaging business is just now getting started. The 1.3 billion cell phones in the world give marketers a possible person-to-person link with consumers everywhere. The potential is there to harness the cell phone to the vast databases of user profiles -- the dossiers that supermarkets, retailers, and mail-order companies have created on their customers. A phone marketer with this data could use short messages to deliver millions of personalized pitches and ads, some of them tailored to the user's whereabouts and the time of day. A GIVE AND GET. So far, however technical challenges and privacy concerns have kept many marketers from venturing into customers' pockets and purses. It's a sensitive business. Anything resembling mobile spam could provoke an angry backlash against marketers. However, marketers do have a way in. It's as simple as knocking and saying "please." Now, throughout the mobile world, that's precisely what marketers are starting to do. They're devising strategies to win customers' permission to receive text ads on the phone. The pitch often involves offering the customer an enticement, from free text messages to weather updates, in exchange for information about the user -- and permission to come calling. "You give something to get something," says Neville Street, CEO of InphoMatch, a Chantilly (Va.) company that processes message traffic for phone companies. "You give your information, I give you something in return." POPULARITY CONTEST. Companies that succeed in signing up large numbers of consumers will be able to target them as never before -- giving them a big leg up on their rivals. For now, U.S. marketers are wooing customers with simple text-based offerings, such as daily jokes, diet tips, and astrology readings. But the spread of color screens, stereo speakers, and video applications in phones opens the door to splashier offerings. In more advanced mobile markets, like South Korea's, advertisers win customers by offering video clips, including movie previews or sports highlights. Surprising numbers of phone users, say marketers, actually welcome ads and sponsored messages on their phones. According to a survey by Enpocket, a London-based mobile-marketing company, customers aged 16 to 25 actually want their phone to beep with a message an average of 6 to 10 times a day. "Our biggest complaint from teens is that they don't get enough messages," says Jonathan Linner, CEO of Enpocket. "Every time your phone beeps, it shows you're popular." It's not just kids who want more missives on their phones. Consider one Enpocket campaign for a beauty-care company in Britain that Enpocket declined to name. The company sent to an undisclosed number of women a message promising to give them customized hair-care advice if they responded to 10 text messages over the following 10 days. Each day, a message would arrive with a question. Is your hair dry? Is it fine? Is it thin or full? Fully 90% of the women responded to all 10 questions. In return, they got shampoo advice. And the beauty-care company had valuable data to build personalized profiles for further campaigns. MENU OF MOVIES. In another marketing move, Warner Brothers (TWX ) used Enpocket to send messages to a group of women, aged 17 to 35, and offered to give their partners a helpful Valentine's Day nudge. The women had signed up to receive text ads and updates from several women's magazines. The message that arrived on Feb. 1 asked them to send the name and number of their Valentine. In return, the studio would pass along their request to be taken to the Sandra Bullock, Hugh Grant romantic comedy, Two Week's Notice, on Valentine's Day. So how about the people who might have wanted to send a sponsored Valentine message -- but weren't interested in seeing that movie? They didn't respond. The point with these promotions is to hit a large audience with a specific pitch, something they can respond to with a yes or a no. Conceivably, Warner Bros. could have sent a menu of movies to choose from. But that, say marketers, would likely be too complicated, and discourage customers from responding at all. In time, with the right demographic information, Warner will refine its targeting so that it can reach the right people with the right movie. Enpocket declines to provide numbers on the messages sent or responses. But according to its follow-up research, 41% of the people who responded were taken to the movie.
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