Texting ‘Bout a Revolution

Use of short messaging service explodes in the U.K.

ABOUT 18 MONTHS AGO, something unusual happened in the U.K. mobile phone market. Traffic volumes suddenly jumped, with data activity tripling. When network operators drilled down into the details, they discovered a huge increase in the amount of messages people were sending each other. The texting revolution had begun.

Short messaging service (SMS) allows a text message of up to 160 characters to be sent from one mobile handset to another. The stage was set for this new form of communication following an agreement between the four rival networks — Orange, One2One, Vodafone, BT Cellnet — to pass these messages between themselves. Among certain groups, especially 15- to 24-year-olds, texting has become the way to stay in touch. Across Europe, 8 billion messages a month are now being sent.

For marketers, this new channel presents tremendous opportunities as well as major challenges. “This is a Web-based portal that allows subscribers to the BT Cellnet mobile network to set up services that will be delivered to their phones, either using SMS or wireless application protocol,” says Will Harris, global marketing director for Genie U.K.

“The whole area of SMS advertising and messaging is exciting and dangerous,” he says. “No one predicted how widespread it would be — it succeeded by accident. If companies latch on to the fact that it is a way to sell, it could kill SMS,” he warns. “For us, it is a fine balance between using this intimate, personal communication channel and becoming annoying.”

What everybody involved in this channel is concerned about is spam. Mobile phone users just about always retrieve messages sent to their phone, and may even interrupt their activities to do so. And it costs them money. If the messages are at all irrelevant, intrusive or dishonest, there will be a consumer backlash.

Harris believes the way forward is to give phone users something in return for taking a message. “The guiding principle for us is that if a company is going to use the SMS communication channel,” he says, “they have to offer something in exchange — an offer, a gift or a download.”

Controlling access to SMS is currently easy. Each of the four networks operates its own portal through which subscribers define the services they want to receive. A number of third-party portals, such as Boltblue and Red Message, have also sprung up.

But it is theoretically possible to send unsolicited messages to phone users from any PC. All that is required is a list of phone numbers and the software to automatically type out each individual message. Only the limited availability of mobile phone number lists is holding this back.

So great are the concerns about preventing abuse that the Wireless Marketing Association (WMA), whose membership includes the four networks, has introduced a code of practice.

Steve Wunker, chairman of the WMA, says there are three major elements to the code. “All mobile marketing has to indicate to the recipient who the sender of the message is,” he says. “The consumer has to provide permission to receive messages that are solely of a marketing nature. And there will be a central repository of records of those who opt-out to scrub phone number files against.”

This will put SMS on the same footing as direct mail, e-mail and fax in providing a single “do not mail” file for marketers to screen against. One difference, however, is that the WMA operates separately from the Direct Marketing Association and has limited powers to sanction those who break the code. Critically, phone numbers are not currently covered under existing data protection legislation.

What also worries marketers is that the code does not cover the network operators’ own marketing messages. They have agreed not to send out more than two unsolicited SMS messages per month to users. But add in their own promotions and offers and the volume can easily pass that level.

“The network operators are guilty of sending unsolicited SMS, even though they publicly say they never do,” says Michael Brown, CEO of Boltblue. His company operates the largest mobile phone portal in the United Kingdom, which is independent of the networks.

Boltblue has around 4 million subscribers, with 2 million unique visitors in the month of March alone. Brown claims to have 25% of the SMS market in the United Kingdom and, he notes, “Our users spend 70% to 100% more minutes online with us than with their Internet service provider.”

The appeal for Boltblue users is in being able to select specific news, sports or entertainment alerts to be sent to their phone. They can also manage their e-mails via any device. “Our proposition is that we manage complexity,” says Brown. Advertisers can take advantage of this traffic, principally through sponsoring the messages that have been requested.

“If someone is getting a horoscope — that is big in the female 20-to-24 market — they can get that on their phone using SMS,” says Brown. “Targeting allows us to promote a film like ‘Save the Last Dance’ as a tag on the back of the content.”

Although few marketers have yet taken advantage of it, Boltblue allows a call-back facility to be added that would deliver an immediate response. Those young women could be provided with the phone number of their nearest movie theater, for example, since Boltblue knows their postal code.

Boltblue already gets one-third of the volume of online advertising that Freeserve — the U.K.’s largest ISP — has been able to attract. For a public service provider like the National Blood Service, which needs to recruit blood donors, using SMS has delivered a 50% higher return on marketing investment than any other channel.

Right now, SMS is very much the golden goose. For the networks, it is delivering massive revenues through subscriber usage. For phone users, it gives quick and easy access to relevant information, such as share prices, traffic or weather.

If marketers can play into that involvement without abusing it, it really will be something new.