Text Messaging: Where The Volume And The Dollars Are Today

In case you hadn’t noticed mobile marketing is generating lots of buzz these days. And with buzz usually comes revenue forecasts. Indeed, various research firms are throwing out numbers for mobile advertising, music and video that make online advertising look like a fly on the butt of an elephant by comparison.

There’s a certain logic there of course. With more than 200 million mobile users in the U.S. and in excess of 2 billion globally, it’s clear that mobile phones will only grow in importance for consumers – and marketers. But there’s also a relatively common assumption that mobile devices will essentially replicate the experience of the Internet, albeit on a smaller screen. Accordingly, marketing tactics and tools that worked online should also work in a mobile environment – right?

Not so fast. Mobile advertising as a mass medium will take off, but the question is when and in precisely what form?

Where’s the usage?

The “mobile Internet” already has some fairly impressive adoption in the U.S., anywhere from 30 to 34 million users, according to M:Metrics and comScore respectively. However most of those adopters are using it for email, the single largest volume activity.

While the mobile Internet user experience is getting better, generally speaking, it will likely still be several years before it gains mass market status. But compare text messaging, which is a mass medium today.

Depending on whom you want to believe (M:Metrics, comScore or the Mobile Marketing Association), text messaging has anywhere from 36% to 70% penetration in the U.S. mobile phone market. That represents anywhere from 72 million to 140 million (or more) users. And the numbers are higher outside the U.S. Given those numbers it’s immediately clear that marketers should focus on text to reach a mass mobile audience today – and probably tomorrow as well.

The following examples are just a few ways that text messaging is being used successfully as a marketing medium today. This is not a comprehensive list but a survey intended to show the surprising variety of forms text-based marketing is already taking.

InfoNXX and Miva: Pay-per-Text

U.K. based directory assistance (DA) provider 118118 (owned by InfoNXX) launched PPText last year in conjunction with Miva. Mobile DA calls to 118118 yield a text message back with the desired phone number. Text ads (typically contextually relevant) are appended to the bottom of the message. Miva reports good success rates (4% to 10% text-to-call rates) in case studies.

4INFO and Chevy: Branding and direct response by text

Text-based mobile search provider 4INFO has created a national text advertising platform for branding and direct response. GM’s Chevy division launched with 4INFO in October, 2006, purchasing the company’s sports inventory (which provides proxy demographic targeting) to introduce its new Silverado truck. It went on to expand the number of cars featured in the ads.

The ads are both a branding and direct response vehicle. Users are able to enter their zip codes and find the closest dealer among 2000 Chevrolet locations across the U.S.. Ad copy can be updated daily. Since the beginning of the campaign 4INFO reported that it has served more than 1.5 million impressions. (4INFO didn’t provide me with any performance metrics from the campaign.)

The company also is seeking to become a kind of white label mobile ad platform or “back end” for publishers and marketers who want to reach mobile audiences generally.

NearbyNow: Shop by text

Local product search provider NearbyNow launched NearbyNow SMS in Q4 last year, enabling consumers to search for local product inventory or sale items in local malls serviced by NearbyNow.

The company also enabled retailers to advertise via text to consumers using NearbyNow SMS in malls. CEO Scott Dunlap told me that text messaging campaigns announcing sales or specials have been particularly successful with in-mall shoppers, in some cases even creating too much response.

The company also operates in-mall kiosks that allow consumers to search for products and feature ads from retailers and vendors at the mall. The response rates to these promotions are extremely high given that shoppers are on the premises and in “shopping mode” typically when they encounter the ads.

VSearch: A mobile Internet-text hybrid

Voice technology provider VoiceSignal recently launched (in conjunction with InfoNXX [again]) VSearch, a voice-driven mobile local search product. I previously wrote about that here. What’s interesting for purposes of this post is that VSearch offers the richness of a mobile application or the mobile Internet in a text-like push delivery scenario.

VSearch operates like DA, with a voice query to a database for a business listing or category search. Results are pushed to users but not in the form of a plain text message. Rather they can be presented in a graphically rich form (e.g., scrollable maps) because of embedded software on the handset. This permits any number of forms of direct response or brand advertising in a text-like push environment.

Free DA provider Jingle Networks also has SMS based advertising.

MoVoxx: Mobile alerts and coupons by text

MoVoxx is a company that rose from the ashes of former Jingle competitor Infreeda, which failed and sold its assets to AT&T.

MoVoxx offers advertising in the form of alerts and coupons via text message. Consumers see ads in traditional media and text to receive offers or ongoing alerts tied to brand marketers, retailers or entertainment venues. The company currently has partnerships with several newspapers, as a way to extend the value of print advertising into the mobile world.

4INFO similarly has a newspaper relationship with and minority investment from publisher Gannett, which uses the platform as a mobile promotional tool for USAToday content and marketing.