Marketers to Go Long on Short Codes in 2009: Nielsen
The expansion of the U.S. audience for mobile text messages should lead to expanded opportunities for SMS marketing, according to a new white paper from Nielsen Mobile, the telecom and mobile media research arm of The Nielsen Co.
Right now the U.S. ranks eleventh among a group of the largest global countries in terms of text message usage, with about 57% of wireless subscribers having seen a text message in the previous 30 days. That compares to SMS rates of85% in Sweden, 78% in Italy, 77% in Russia, and 76% each in Spain and the U.K.
But Americans’ use of text messaging will grow. “It’s hard to imagine a time when we’ll each average more than the current 357 messages per month, but it will come,” the report contends. “So too will the opportunity to engage with customers over this highly personal and interactive medium.”
And since consumers today tend to look at every text message they receive, that offers SMS marketers an opportunity to engage with those customers in unique and personal ways. And mobile short codes are playing a part in both direct promotional campaigns and in bridging the gap between offline advertising and digital initiatives.
For example, Nielsen Mobile points to the efforts Coca-Cola has put into text messaging. MyCokeRewards.com loyalty members can now submit their under-cap codes via mobile short code to increase their rewards points. Nielsen says Coke’s mobile users typically send and receive about 32 messages a month from the company. And as of Q3 2008, 1.1 million My Coke Rewards users on the AT&T and Verizon Wireless networks were actively texting Coca-Cola.
The Nielsen paper points out that almost half of that mobile My Coke Rewards contingent (47%) was 35 or older. Overall, 53% of mobile users engaging with the kind of short codes used by brand marketers are 35 or more.
Nielsen points to other recent SMS campaigns in Q3 2008:
- The Ashley Furniture Homestores chain jump-started sales during the slow summer months with a campaign that sent SMS coupons for a four-day “secret sale” to 6,000 opted-in mobile customers. According to the eight-store chain, More than half of the $135,000 in revenue generated by the sale was traced to the SMS coupons. Ashley estimates that it generated $122 in sales for every $1 spent on the text campaign.
- Papa john’s, domino’s Pizza and Pizza Hut all let customers register their favorite order details online and then use mobile SMS to place those orders. Among AT&T and Verizon Wireless users, Nielsen estimates that 552,000 texted orders to Domino’s in the third quarter, 279,000 texted Pizza Hut and 182,000 texted Papa John’s.
- Shoe retailer Foot Locker texted special offers to “VIP program” members, including 306,000 AT&T and Verizon Wireless users in Q3 2008.
- Food retailer Subway has encouraged customers to come to its WAP site, http://www.subwayfreshbuzz.mobi, and sign up for mobile alerts and offers. Nielsen estimates the chain sent sandwich deals and news to 212,000 AT&T and Verizon wireless subscribers in the third quarter of this year.
Mobile short codes are also penetrating broadcast and other traditional marketing channels. The Nielsen report notes that in Q2 2008 more than a million mobile transactions with the short code “ALICE” were received by the San Francisco radio station 97.3 KLLC-FM, where listeners could use SMS to make music requests, enter polls and win prizes.
Nielsen cites results from a separate Q2 2008 Mobile Advertising Report that found 16% of Americans who used text messaging said they see some form of SMS advertising every month. That rate rose to 35% of teen mobile subscribers, 24% of African Americans and 23% of Hispanics.
Of those who recalled seeing some kind of text message ad in the quarter, 45% in Q2 2008 said they responded in some way. And among those responders , the largest proportion (25%) said their response to any kind of mobile ad—text, display, video, mobile Web link—was to send a text message.
“We believe short codes are at the fulcrum between traditional media and mobile media, creating opportunities for marketers and media companies to leverage the reach and consumption levels of traditional media to drive a more personal interaction,” the Nielsen Mobile report says.
What’s more, adding SMS mobile to more traditional channels such as print or outdoor advertising will help measure and clarify the impact of these traditional forms of media. “In that regard, short codes will continue to be not just a medium, but also a metric,” according to the report.
